Why bother hiring an agency? Weighing the Pros & Cons...
MY PALMS WERE SWEATING. I COULD FEEL THE LUMP IN MY THROAT TIGHTEN AS MY LEG SHOOK UNCONTROLLABLY.
Keep it cool, Nick!
I straightened my back with the clearing of my throat and eyed his profile as he was reviewing the proposal. I had the front of it laminated to try and make it look as professional as possible – because, well to be honest I really didn’t know how this whole process worked but felt like that’s what the bigger agencies would do.
They’re going to ask me, I silently cringed.
I wasn’t sure how I was going to respond if they did, despite the fact that the question had been plaguing me from the moment I set up my freelancing business.
In my mind, I couldn’t understand why a business would bother spending $7K/mth on my services when – really – they could just hire someone in house for probably less than that.
He closed the proposal with a nod, “Alright, so just to confirm this would include the copy as well? ”
After clarifying the details and agreeing to a non-compete with competitor brands, we shook hands and the deal was done.
Just like that.
“In my mind, I couldn’t understand why a business would bother spending $7K/mth on my services when – really – they could just hire someone in house for probably less than that.”
If you’ve ever landed your own clients you’ll know what I mean when I say it’s one of the best rushes on this planet – a validation of all your efforts and work!
I was on cloud nine the whole rest of the day.
But – to be honest – it took me a few more years before I fully understood why businesses would even bother hiring agencies when, often, the cost are much higher than trying to hire internally.
WHY DON’T BUSINESSES JUST HIRE INTERNALLY?
The truth is there are different motives, depending on the size of the business. And there are pros and cons for both situations.
For large brands – you know, the Coca Cola’s of the world. The reason they outsource to agencies is mostly due to something called Opex, which stands for operational expenditure.
These are basically funds used by a company to cover expenses such as wages, maintenance services, rent and utilities and brands. Directors are given budgets around these and – while you may think your agency costs the brand a lot more more – many of these brands don’t have the budget bandwidths to add more staff to payroll due to Opex and CapEx (capital expenditures) restrictions.
A reminder here – as an employer myself – I have come to learn through the years that staff are actually very EXPENSIVE. They get sick, they take time off, they need training and go on maternity leave. A $5K/mth employee will cost a company a lot more than a $8K/mth agency – who can fulfil work year round and around the clock – will.
But surely in the long run hiring internally is a much smarter idea?
Perhaps, but let’s have a look at why smaller businesses choose to recruit agencies vs internal staff.
PS – this isn’t a scientific study with a thousand data points, it’s based of my own experience (and from working with hundreds of agencies & clients).
Firstly – most businesses have no idea what they’re doing when it comes to anything digital marketing – let alone specific marketing activities such as Facebook advertising. The platforms and tactics are so new and ever changing that, unless you’re on top of it all the time, you get left behind.
And the reality is that in order to manage staff, you need to have a concept of what needs to happen or how to know if they’re even doing a good job.
So for most entrepreneurs and business owners – trying to become an expert in something that would just consume a lot of their time makes no sense.
They simply don’t have the knowledge to even know how/who to hire for such a role nor do they have the time/patience to try and train/manage said individual in their business.
Secondly – for most digital marketing services offered in the market – the skillset needed to complete the full picture often requires a whole range of skills. There’s a saying in the industry of “looking for a unicorn” and it’s not far off.
Take FB marketing, for instance, in order to be a good FB marketer one must be able to:
Have an eye for creative
Understand funnels (and potentially even build them)
Have an analytical mind able to interpret data
Be a strategic and adaptive thinker
So you’re needing someone that can use both their left and right brain! Not an easy feat as most of these people are already doing their own thing!
When a startup or small business wants to grow fast and has needs for competence, tapping into an agency means they essentially get the whole package – all the skills required – in what would otherwise oftentimes require three people internally to complete.
So – plain and simple – businesses just want the headache taken off their plate and want results. And they want a solution NOW.
PROS & CONS OF HIRING AN AGENCY – WHY BOTHER?
Access to bigger suite of skills
“Round the clock” service
Often times cheaper than internal staff
Long term, once Opex stabilized, wiser to hire internally
As business scales, can get costly
Human resource not “owned”
SO WHAT’S RIGHT FOR YOU?
Every business has different needs and will require different solutions based on where they’re at. As a general rule of thumb:
If you’re still in a start up phase – hire an agency or contractor. It’s the same premise as why you would lease vs buying a building, doesn’t make sense to put that overhead on your shoulders when you’re in a volatile and/or active growth stage of your business.
If you’re well established business that has had great results from your digital marketing activities already and are spending more than $15K/mth on an agency it may be time to start shopping for your unicorn. Use your agency to train said person (they will obviously charge this for you) to help save you time and you can even set up a solution where the agency comes in to help our with strategic direction until your “unicorn” can get off their feet! Please note, to hire a competent Digital marketer you’re looking at roughly $70K-$120K per annum – so it’s not cheap either!
HOW TO FIND YOUR OWN AGENCY/CONTRACTOR OR IN-HOUSE EMPLOYEE
If you would like to get matched with a FB Marketer or Agency Partner use the form below. We will match you with up to three suitable candidates based on your needs (no cost to you), please allow up to 5 working days.