Freelancer vs consultant vs agency — what’s the difference? — Credo

Have you been considering hiring an outside provider for anything in your business, but when you start your research you’re overwhelmed and just have no idea who to hire to hit your goals?

Too many businesses make the mistake of hiring the wrong type of provider. Hiring the wrong type of provider will slow you down, keep you from hitting your goals, and can be expensive.

Over the last 5 years of running Credo, I’ve spoken with thousands of companies and seen too many hire the wrong type of provider. I want you to learn from their mistakes. Before you focus on the individual person or firm to hire, you need to make sure they’re the right type to accomplish what you need.

Hey there I’m John Doherty. Entrepreneur, marketer, dad, husband, outdoorsman, and the founder and CEO of Credo where we connect great companies with the best pre-vetted digital marketing firms.

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Mentioned resource: guide to hiring a digital agency

Today we’re going to talk about the differences between freelancers, consultants, and agencies. I’m taking a chance with this video because I know there will be pushback on these generalities, but I do believe that generalities exist for a reason and are useful and thus, I’m going to be using them with these caveats.

If you’re a marketing leader or an entrepreneur looking to hire for marketing, you may not be clear on the of provider you need. I covered type in-house vs agency in another video, but once you’ve decided to outsource (for lack of a better term) you need to figure out three things:

  1. What’s the difference between each of the three?
  2. What should I expect to get from each and what should I expect to pay?

The opportunity ahead of you, if you hire well, is immense. You’ll be able to:

  1. At a lower cost of acquisition
  2. And hire the right team to get more results faster

Over the years I’ve spoken with thousands of companies who are looking to hire, but I’ll never forget the discussion I had with one head of marketing. Now, I say head of marketing but really she was the marketing team. She was overworked and under-resourced from both a people and budget perspective.

She told me something to the effect of “I need a freelancer who can do SEO, PPC, Magento web development, graphic design, and handle our customer support”. Basically she had a budget of $500 to hire for all of these roles. She wasn’t a fit for Credo, but I also had to give her the bad news that she wasn’t going to find one person, “a freelancer”, who could do all of those things and definitely not for that price.

From there I explained to her the differences between the three and when you should hire each. Here’s how I explained it to her.

Freelancer vs consultant vs agency

  1. A freelancer is a catch-all term that I see used a lot in the business world. They’ll say “Let’s hire a freelancer to do that” and the understanding is that a freelancer is cheap and a workhorse to get things done. Often they’re seen as a cheaper replacement for a junior full time individual contributor. The expectation, unfortunately, is that the freelancer will get the same amount of work done as a full time hire, but in less time and for less money. And it is true that usually freelancers are cheaper than a senior consultant or an agency, but that also comes at a cost of professionalism and communication. This doesn’t mean they’re not good, and I do know some senior freelancers who are very professional and communicative and deliver top notch work every time. But as a generality, “freelancer” usually connotes cheaper and less experienced “services”. And I think that’s a good way to think of freelancers — lower priced services.
  2. A consultant is a solo person (though sometimes individuals at agencies are called “consultants”) that is usually more senior than a freelancer and works on the business strategy level as well as often being able to get in and do discovery to guide internal teams to get the work done. When I hear the term consultant, what pops into my mind is management consultants. They’re well paid and can work across the levels of an organization, shifting from business strategy with execs to marketing strategy with marketing leaders. A marketing consultant, such as an SEO consultant, should be able to talk marketing and business growth across the levels as well, and may also do audits and guide strategy that is implemented by internal teams. When thinking about a consultant, you should think of them as working alongside your internal teams and guiding strategy. They’re not a replacement for internal teams and even need internal teams to be effective.
  3. An agency is a collective of people. An agency might be 2 people, 20 people, 200 people, or even bigger. In the digital marketing or even web development world, a “large agency” is 50 people. Agencies are a team of professionals that you hire to get the job done. Some agencies also have the ability to help you with your marketing strategy. An agency is the right fit when you need to get marketing channels operated, and potentially even multiple channels done without having to find new providers for each channel. Agencies also usually have an account manager in charge of your project who is responsible for wrangling all the items and teams and keeping everything moving forward. Remember — if you don’t pay for an account manager then you are the account manager.

Before we end, I want to correct a common misconception I see which is that agencies have too much bloat. While it is true that agencies often do have costs like managers and offices, whereas a consultant or freelancer may not, agencies bring other value-adds to the table such as processes to get things done well and consistently, the ability to hire replacements when an employee leaves, and ability to bring in other channels because of their reach. The challenge with consultants and freelancers is that they may go dark on you and stop replying, or they simply won’t be able to keep up with work demand and will burn themselves out. I know this world — I was that consultant who decided to stop consulting, and that’s why I built Credo. This is why it’s important to hire the right type of provider for the type of work you need done.

Today we’ve talked about whether you should hire freelancers, a consultant, or an agency.

Originally published at https://www.getcredo.com on October 26, 2020.

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John Doherty

John Doherty

5.5K Followers

Founder & CEO of Credo (getcredo.com). Veteran digital marketer in Denver. Entrepreneur. Traveler. Skier. Other sites: johnfdoherty.com and singlegeared.com