Should you hire in-house or a marketing agency? — Credo

Mentioned resource: Guide to hiring a digital marketing firm

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.

Today we’re going to talk about whether you should hire for marketing in-house or use an agency. There’s not a straight forward answer, but I’ve spent a lot of time thinking about and talking through this conundrum with companies over the years, so I’m going to tackle it today.

If you’re a marketing leader or an entrepreneur looking to hire for marketing, you have some challenging things you’re thinking through including:

1. Budget and what is reasonable to pay
2. Results and what is reasonable to expect
3. How to manage them well and know if you’re getting results.

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

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

I was recently on a call with a business owner talking about his business and results. When talking about what he does, I was impressed. It appears to be a great business in a great space with a product that people want and get great value from.

But when I asked him about the marketing they’ve done, he told me that he’s had a director of marketing for a few years. That didn’t match up because he had done a total of 4 sales calls in those three years, all in the last month or so. He had “marketing”, but had no insight into his results. Honestly, he had hired badly.

So, should you hire in-house or an agency? Here’s how I think about it.

1. Understand the maturity of your need inside the company. This is where I see a lot of companies go wrong, where they hire an agency or in-house when they haven’t figured out the channel on their own. This usually then leads to an underinvestment of both budget and time, and walking away saying it didn’t work. I’ve done this before and regretted it afterwards. Don’t do it.
2. Determine the depth and length of that need. Once you’ve started the channel or undertaking at your company, determine if it’s something that needs to actively be done full time or if it’s something that someone can do on a part time basis.
3. Determine the budget needed to properly hire for and execute on that need. Executing on marketing is always more expensive than just the hire itself, because of tools and other things needed once someone is focusing on it. A general rule of thumb I use is to take the hiring budget and add 25% for additional costs. Additionally, what you need to budget is based off your growth goals and expectations, so understanding that will help you not undervalue and thus underinvest in it. You can then take this potential budget to your candidates to understand if it’s reasonable (good candidates will ask you about budget anyways).
4. Compare that budget against what is in your budget currently. Once you’ve determined your potential budget and had feedback on it, then you can determine if that’s reasonable within your current overall business budget or not. If it is, great. If it’s not, then you need to adjust your expectations or increase your budget to hit those expectations.
5. Decide on the type of hire. Once you’ve determined all of the above, now you can decide if you need someone full time in-house or if an agency can do it. In general, if it’s a leadership/strategy position then an in-house hire is often the right hire so that they can then manage a team or agencies who are boots-on-the-ground getting it done. Many companies end up working with both, and the companies who work the most successfully with agencies have someone with the time and expertise to manage an agency and hold them accountable to results.

Before we end, I want to correct a common misconception I see which is that “agencies are more expensive than in-house hires”. This is actually not true, especially in the digital marketing world, because often what you get with an agency is a team of professional marketers for the same price as one full time hire.

Agencies are also easier to fire if they don’t work out.

And when I hear that someone doesn’t want the expense associated with an account manager, I make sure they understand that if they’re not paying for an account manager then they are the account manager themselves.

Today we’ve talked about whether you should hire in-house for marketing or work with an agency. We covered:

1. Understanding the maturity of the need inside your company
2. Determining the length and depth of that need
3. Determining the budget needed to achieve your goals
4. Comparing that to your budget realities inside your company
5. Deciding on the right type of hire.

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Originally published at https://www.getcredo.com on October 5, 2020.