Hiring a marketing agency - retainer or projects?
11th September 2017
You know the situation – as a business owner or in-house marketing guru you’ve been doing your own marketing. It’s been going well, but your company has grown and you know that you need to up the level. Or perhaps you feel like you’re falling behind your competition, and you look at their marketing with a hint of envy. In either case, you want to do more but you know you’re not ready to have a full time in-house team.
The logical choice is to outsource to an agency. But that looks like a big – and possibly expensive – step.
If you’ve faced this situation, first of all - take heart! You’re definitely not alone. Many companies have been through this process, and asked the same questions. How do I hire a marketing agency? Isn’t it expensive? Can I hire one for a couple of months, or do I have to sign up long-term?
The good news is that marketing agencies are here to help. Any (good) agency should be happy to talk to you on your terms, discuss your options (including some you may not have thought of), explain the costs and, ultimately, put you in a position to make an informed decision that you’re comfortable with.
This article is here to help with one of those questions in particular – should you hire an agency for specific projects, or sign up with them longer-term?
Retainer vs Project-based marketing
The difference between retainer and project-based marketing is simple. On retainer you hire an agency on a full-time, on-going basis, pay a monthly fee, and in return the agency delivers a previously agreed output on a constant basis. Regular update meetings allow you and your agency to check progress, look at results and tweak your marketing plan accordingly. In effect, an agency on retainer becomes your in-house marketing team, bringing with them the agency’s skills and experience, and often placing more than one person on your account.
"...an agency on retainer becomes your in-house marketing team"
Project-based marketing is very different. Your agency has a specific goal to achieve, which you define. They’ll come in, discuss how to achieve that goal, lay out what it will take and how much it will cost. They then work on and deliver that project, at which point the agreement is over. If you want them to do something else, you set up a new project.
So what are the pros and cons of each approach?
Putting an agency on retainer
The first thing to say is that you always get a better deal from an agency on retainer than one working on a single project. Although project-based marketing may involve a lower initial outlay, longer-term it always costs more. Generally speaking, the smaller the project, the higher the rate. It’s simple economics – pitching for, researching and working on a dozen one-month projects costs a lot more than working on one project for 12 months. Also, on retainer agencies can do more forward-planning, which itself leads to better cost savings.
When you hire an agency on retainer, they have the opportunity and incentive to immerse themselves in your business, developing a deeper understanding of what you do and what you need and producing better work as a result. You can build a solid, long-lasting relationship with your agency – they know what you want, and you know what they’ll deliver. Everyone benefits.
But, of course, this level of service does involve a longer-term commitment than project-based marketing. Agencies will usually ask for a minimum one year contract with a built-in agreed notice period – they’re offering you a good rate, so in return they’ll ask for a commitment from you. Make sure you’re aware of this up-front so that you know what you’re committing yourself to.
Perhaps the bigger risk is that of trust and relationship – how do you know the agency you’re committing to will work out as you’d hoped? Ultimately there’s no clear answer to this – you just have to use your judgement, pay due diligence by talking to their existing customers and only engage an agency you feel comfortable working with.
"...make sure you you have a good idea of what you want from your agency, and ask questions!"
A good agency will work with you on this before you sign up, as It’s in their interests almost as much as yours. But to help the process along, make sure you have a good idea of what you want from your agency, and ask questions! Do you want the agency to follow instructions that you give them, or do you want them to lead the relationship and guide you on what they’ll do? Do you want to be involved on a day-to-day basis, or do you want them to look after your marketing for you? Will the people you talk to at the start (when they’re pitching) be the same people you’ll be talking to six months down the line? Judge their answers, ask for examples, and take note of what questions they ask you – that can tell you a lot.
Project-based marketing represents less of a commitment than placing an agency on retainer, but typically at a higher cost per project. For that reason, it can be a good entry point for companies or owners who haven’t used agencies before, and who are nervous about committing to something new. As long as they have a suitable project, it can be a useful way of judging an agency while deciding if longer-term outsourcing is the right fit. And if they get the decision wrong, they’re not tied in for as long.
This style of marketing can also work well for companies that don’t really have a clear understanding of their long-term marketing goals or plans. It’s difficult to commit long-term to an agency without having a reasonable idea of what they need to achieve. It’s simpler to run a small project with a specific short-term goal.
"...project-based marketing often works well for companies that do their own marketing, but need extra resource or expertise"
Finally, project-based marketing often works well for companies that do their own marketing, but need extra resource or expertise for a particular project. Classic examples of this are product launches, significant events (like exhibitions), or one-off sales campaigns.
The downside of project-based marketing is that you get less chance to form a relationship with the agency, while they have less chance to learn about you and your business.
You also miss out on benefits that steady, regular marketing can bring. For instance, a short social media followers campaign can bring in big numbers, but the quality won’t be as high as a slower, more organic approach. Similarly, one or two big adverts in a trade magazine are less effective than ads that run for a longer period.
Finally, if you start running more than one project on this basis, it quickly becomes more expensive than having an agency on retainer.
We’re here to help
Only you can decide what fits your company and outlook best. But whatever you choose (or if you simply can’t choose!), we’re here to help. Brouha Marketing offers a full range of marketing and PR services, on either a retainer or project basis. Simply contact us here or call 01672 514947 to chat about how we can help.