In this post, I cover the ins and outs of how to work with and choose the right agency. It might look lengthy, but I can guarantee you, choosing the wrong agency will cost you far more time than reading this post. Estimated reading time: 12 minutes.

How to Choose and Work Effectively with a Marketing Agency:

In the dynamic realm of digital marketing, the choice of agency can profoundly impact your business’s online success. Drawing from my extensive experience—having owned a marketing agency and collaborated closely with agencies for over a decade alongside various brands—I understand firsthand the challenges small businesses and startups face when engaging with marketing agencies.

These challenges often include mismatched expectations and ineffective strategies. From spending substantial budgets on paid ads without seeing sufficient returns to encountering delays in communication and unexpected fees for minor edits and additional calls, these common pain points underscore the critical importance of selecting an agency that not only comprehends your business objectives but also crafts tailored strategies to deliver measurable results. Here are key insights and tips to help you effectively select and collaborate with a marketing agency.

Choosing the Right Agency – What to know before you chat.

When looking for an agency, it’s crucial to treat the process as if you’re hiring a new team member. Agencies often love flashy presentations and pitch decks, which can sometimes overshadow their understanding of your business. For instance, I once worked with a US agency that spent a good 20 minutes showcasing their LA office and enthusiastically discussing their company parties complete with kombucha on tap. However, during our interactions, it became clear they had little understanding of our business. Despite receiving our product as a gift, they mistook our hero product for a completely different appliance they hadn’t bothered to examine.

Here are key tips to keep in mind:

  • Portfolio and Results: Before committing, review the agency’s portfolio. Ask for case studies or examples of their work with brands similar to yours. Look for tangible evidence of results that align with your business goals
  • Initial Consultation: Agencies often excel at pitching their services, but ensure the conversation remains focused on your specific business needs. Beware of agencies that prioritise showcasing their awards and office perks over understanding the intricacies of your business

During Your Consultation: After requesting a quote, agencies typically conduct a pitch meeting where they present their services. While it’s important to let them showcase their offerings, taking the initiative to ask probing questions can reveal crucial insights early on. Here are some questions often overlooked, yet essential in ensuring a successful agency-client partnership:

  • Tell me about my business and my products: This question tests whether the agency has thoroughly researched your specific business needs and understands your product offerings.
  • From your research and getting to know our brand, who do you think our target audience is? Understanding how well the agency comprehends your brand and its audience is vital for aligning strategies effectively.
  • Tell us about a campaign that didn’t go as planned. How did you handle it? This question assesses the agency’s transparency, problem-solving skills, and ability to learn and adapt from challenges.

There’s no reason an agency can’t answer these questions. If they attempt to dodge them or defer answers until you sign on, it’s a major red flag. A reputable agency genuinely interested in your business should have already conducted research on your brand to ensure you are a match and that they can help you, with these you are not asking them to provide insights beyond what you already know.

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Understanding Cost Per Acquisition (CPA) Goals before you start with an agency.

Something I’ve noticed, especially with brands less familiar with marketing, is the importance of understanding their Cost Per Acquisition (CPA) goal. In simple terms, this is the amount you’re willing to spend on advertising to secure one sale. Setting a CPA goal is crucial for assessing how effectively your marketing budget generates new customers.

For example, let’s say you have a product priced at $100. If your CPA goal is $20, it means you aim to spend up to $20 on advertising costs to acquire each new customer who buys your product. This metric ensures that every dollar spent on ads contributes efficiently to measurable sales results.

You can then imagine, if you have $1000 ad spend per month, you will only obtain the amount of sales your CPA allows. If you are paying $20 for a $100 sale, you can potentially make 50 sales if your ads are performing well, giving you $5000 in sales, which would be $4000 return on investment.

Before engaging with an agency, it’s beneficial to have a CPA goal in mind. A competent agency will help you refine this goal based on industry benchmarks and your business’s specific circumstances. They can guide you on what’s achievable and realistic, ensuring your marketing efforts are cost-effective and drive tangible returns on investment.

Understanding Your Ad Budget:

Now that you grasp the importance of Cost Per Acquisition (CPA) in marketing, it’s crucial to have a clear idea of your advertising budget before engaging with a potential agency. My recommendation is not to disclose your budget immediately but instead understand the agency’s recommended spend and rationale. Compare this with your budget and discuss to arrive at a figure that satisfies both parties.
Advertising budgets can vary widely—from as little as $5 a day to $1000 a day—depending on your objectives and available resources. It’s essential to align your ad spend with your business goals to maximise effectiveness and return on investment. Remember, your ad spend is additional to the agency fee.


Understanding Scope of Work, Resource Allocation, and Costs

If you’re considering moving forward with an agency, it’s crucial to have a clear understanding of all financial aspects before signing any contracts. Here are key considerations beyond the agency’s fee:

Scope of Work and Costs:

  • Scope of Work: Understand exactly what services the agency will provide and what is not included. Ask for a detailed breakdown of deliverables and timelines to manage expectations effectively.
  • Additional Work and Costs: Clarify how much additional work outside the agreed scope will cost. This includes extra meetings, revisions, or changes beyond the initial project scope. Knowing these costs upfront prevents unexpected budget overruns.
  • Goals and reporting: Ensure your package includes a weekly checkin call, dont wait till the end of the month to touch base as this can cause unessecary spend and help you stay ontop on unpredicatble situations. Also ensure the agency not only provides you with a monthly report but also has actional steps on how they will achieve goals month to month.
  • Contractual Terms: Review the contract thoroughly to understand the terms of engagement, including termination clauses, contract duration, and any penalties for early termination.

Goals and Reporting:

  • Check-in Calls: Ensure your agreement includes regular check-in calls, ideally weekly, to maintain proactive communication. Waiting until the end of the month can lead to unnecessary spending and hinder responsiveness to unforeseen challenges.
  • Monthly Reporting with Actionable Steps: Verify that the agency provides not only monthly reports but also actionable steps outlining how they will achieve your goals incrementally. This ensures transparency and accountability in achieving measurable results month over month.

Resource Allocation:

  • Hours per Week: For retainer agreements, ask how many hours per week the agency will dedicate to your account. This helps gauge their commitment and ensures they allocate sufficient time to achieve your goals.
  • Team Composition: Inquire about the team structure assigned to your account. Who will be responsible for different aspects of your marketing campaigns? Understanding the team’s expertise and roles ensures you have the right skill set working on your projects.
  • Account Manager: Identify your primary point of contact within the agency. Knowing your account manager facilitates clear communication, reduces misunderstandings, and ensures accountability for project success.
  • Advertising Spends: In addition to the agency’s fee, clarify the budget allocated for advertising spends. Understand how this budget will be managed and optimised to achieve your marketing objectives.

Additional Costs:

  • Discuss any potential fees associated with revisions, additional calls, or unexpected changes to the project scope. Transparency about additional costs helps you budget effectively and avoids surprises in billing.

Conflict of Interest:

  • Inquire about any potential conflicts of interest, such as working with competitors or similar businesses in your industry. Ensure the agency can provide unbiased advice and strategies tailored specifically to your business.

To wrap this up:

As I’ve highlighted the importance of understanding CPA and managing your ad spend, it’s crucial to remember that paid ads are just one facet of a comprehensive marketing strategy. Investing in ads alone isn’t enough. Ask yourself: Is your website optimized? Do you have dedicated landing pages to support your ads? Are you actively engaging with social media content? Do you understand your customer personas? And are you nurturing leads through email marketing?

Regardless of the scope of work outlined by agencies, it’s essential to have an overarching marketing strategy that integrates various touchpoints. A holistic approach ensures that every element of your marketing efforts works together synergistically, maximizing your chances of success.

By focusing on clear communication, setting realistic expectations, and aligning goals with your chosen agency, you can establish a partnership that drives measurable results and supports your business growth.