How to Work with a Digital Marketing Agency: An Open Letter to Prospective Clients About Better Relationships

Taylor Holiday

by Taylor Holiday

Oct. 07 2021

Here’s a white-hot take for you …

Bad agencies aren’t your problem. Bad agency relationships are.

That’s because successful agency partnerships are as contingent on the way human beings interact as they are on hitting targets.

If you want to win, you have to remember one key fact. The health of your agency relationship is as much in your control as it is in the agency’s.

Actually, that’s half true.

Just like any relationship, the only thing you can control is how you approach it.

However, that should fill you with hope.

It means selection and management don’t have to feel like you’re playing a slot machine. It means you hold your success in your own hands, even though it can feel like you’ve placed it in someone else’s.

And, that sense of hope couldn’t come at a better time. The anxiety of the holiday season means it’s also agency-hiring season. At Common Thread Collective, demand accelerates from Aug. onward.

Digital Marketing Agency Funnel Metrics 2021

Heading into Q4, established brands evaluate whether they’ve hired the right partner; while startups think about hiring for the first time.

As someone who’s spent 13 years on both sides of the coin, clients who know how to treat an agency well get better results. Always.

I’m not saying that agencies aren’t equally responsible for their side. What I am saying is that there are …

The three factors that can make or break your agency relationship:
  1. Readiness: Should You Hire an Agency?
  2. Transparency: Setting Your Agency Up to Win
  3. Communication: Building a Lasting Relationship
working with a digital marketing agency relationship cheat sheet
Want a better, more productive agency relationship? Download this article as a PDF to use it as a reference for successful agency management

Readiness: Should You Hire a Digital Marketing Agency?

In the world of ecommerce growth, the number one characteristic of failed relationships is the client wasn’t ready to scale.

Plenty of factors contribute to being unprepared for a partnership with a growth agency. The most common is that it simply wasn’t a prudent financial decision.

Certainly, hiring a digital marketing agency has its benefits.

It’s efficient relative to hiring an in-house team. You get access to information relevant to your specific niche. Tasks like graphic design and search engine optimization flourish in the hands of specialists with eyes on multiple accounts.

But those benefits don’t matter if you can't afford them.

It goes beyond, “Do I have enough cash to cover the bill every month?” It’s also, “If I hire an agency, and they fail to hit our agreed-upon goals, will that destroy my business?”

If the answer is yes, that’s a huge red flag.

Like death and taxes, failure is inevitable; the best marketing agency in the world will still miss targets. If missing your revenue goal for even one month would spell disaster, you’re probably not ready.

Let’s say your finances are in order. How do you know if hiring a third-party partner is the right move?

A growth-ready ecommerce business has …

1. A Robust Organic Audience

Think of your business as a campfire. The base — crumpled-up newspaper, kindling, and logs — is your organic audience. You can build and light a warm, long-lasting fire with only those elements.

Media buying is lighter fluid. It ignites faster and burns hotter.

But without long-lasting base fuel, you’ll just be torching a pool of gas. Social -media advertising and search engine marketing are not a good ways to launch a business. They’re even worse ways to rescue a failing business.

Rather, scaling paid channels is the best way to take an already-growing, successful brand and increase its growth curve exponentially.

Agency-ready businesses have enough of an organic audience to sustain them without paid media.

2. Clear Internal KPIs

Unless you’re explicitly hiring a third party to help you with overall business strategy, you’ll need to have a clear sense of what your business objectives are and how your marketing strategy will ladder up to those objectives.

All too often, agencies are held to growth goals that have no particular relationship to overall goals. These KPIs tend to either be

  • Unrealistic: Unreasonable based on historical data, or
  • Arbitrary: Not tied to data at all

A growth-ready brand has a clear, specific vision for where they want to go and what goal they want the agency to achieve on their behalf.

A rule of thumb: an overall business goal is one that only the shareholders of a company are capable of setting. These goals involve maximizing one of three variables: profit, topline revenue, or cash flow.

A growth agency’s goals will look different based on which target you’re trying to hit:

How Overall Goals Translate to Agency Goals
MER = Marketing Efficiency Ratio, total revenue divided by total ad spend

To illustrate, here’s what a bad goal looks like:

“I want to do $22 million next year at a 5 to 1 MER.”

  1. It’s too specific. There’s no room for the agency to evaluate and adjust the goal.
  2. There’s no context. Why 5 to 1? Why $22 million? What data suggests that these numbers are feasible?
  3. There’s no larger vision. What’s the reason behind the 5 to 1? Is it to improve the company’s position ahead of an acquisition? Or is it just because it would be cool to hit that number?

By contrast, here’s what a good goal looks like:

“I want to break even while maximizing topline revenue in order to make the business more attractive to venture capital.”

  1. It’s open-ended. There’s room for the agency to develop its own roadmap for how they’ll help you get there.
  2. It’s reasonable. Break-even growth is achievable, and the agency knows to adjust their buying behaviors to increase volume at lower efficiency.
  3. There’s a straightforward why. Since the business goal is clear, the agency has a mandate to adjust the levers they control to achieve the ultimate outcome you want.

3. Few Operational Issues

Broken supply chains are a fact of life, and the bane of many an entrepreneur’s existence.

Making sure your operations are locked down before you hire will save both sides lots of heartache later — there’s nothing worse than selling a ton of product that you don’t actually have.

It may seem overly simple, but it’s true: growth-ready businesses can reliably deliver the product their agency is selling.

Of course, inventory problems and shipping issues will inevitably arise, even in the most dialed-in operations department. Given that reality, it’s critically important that you proactively communicate those issues to your agency.

Which leads to my next point …

Transparency: Setting Up Your Digital Marketing Agency to Win

Once you’ve engaged an agency, the real work begins.

The first three months are as much about developing a shared rhythm of communication as they are about simply hitting the numbers.

The key to establishing that rhythm? Treating the people on your account like in-house team members. The sooner you can remove the “us vs them” barrier, the faster you’ll be able to scale.

Here are three tips on how to make that happen.

1. Share as Much Information With Your Agency as You Can

At CTC, it’s become a mantra that “good inspiration depends on good information.” The more information your marketing agency has, the more fuel they’ll have for your growth engine.

Give them access to all the ad creative you’ve ever made. Share your business’ finances and accounting, if you can. Help them understand your unit economics, your lead times, your product development pipeline.

Anything and everything helps.

While this level of transparency may feel like a risk, it’s actually much more of a risk to hold info back — it’s like buying an expensive car and refusing to put gas in the tank.

2. Set Expectations and Hold the Agency Accountable to Them

If your marketing agency is worth its salt, it’ll be great at setting clear goals and holding to them. Even so, it’s incumbent on the client to:

  • Be absolutely, 100% sure they’re onboard with expectations
  • Then, act as mutual accountability partners

For the former, a healthy amount of self-awareness is required. If the agreed-upon goal is 2.5 ROAS across all Facebook campaigns, ask yourself, “But am I really expecting them to fix my business entirely? Am I really expecting something much bigger?”

If that’s the case, that unspoken expectation will inevitably end up driving the relationship … toward disintegration.

For the latter, it’s not that your job is to “keep an eye” on your team, nor is it your fault if the agency fails to hold to its goals after you’ve agreed to them.

Still, if you’re aiming at a mutual goal, your agency must know that you’re as committed to that goal as they are, whether it’s a ROAS figure or a specific number of deliverables.

3. Define Who Is Responsible for What, and Stick to Those Boundaries

David Ogilvy, often referred to as the “Godfather of Advertising,” had this critical piece of advice for clients in search of an agency partnership:

“Don’t buy a dog and bark yourself.”

That instruction is just as relevant today as it was when it was first written in 1983. It’s simple, in theory. When you hire someone to do a job for you, you need to let them do that job.

In practice, it’s not so easy. Digital marketing agencies are generally hired by CMOs or entrepreneurs — people who have some expertise of their own in the field. They’re often capable of understanding, or even executing, the job for which they’ve hired the agency. That’s not the same being an expert.

This is where the division of responsibilities becomes crucial — you must allow the specialists to have jurisdiction over their areas of expertise. For example, since CTC focuses on digital marketing, we break it down like this:

Client Areas of Expertise:

  • Product development
  • Brand strategy
  • Organic channels
  • Marketing calendar
  • COGS and profitability

Agency Areas of Expertise:

  • Paid social media
  • Paid search (SEM)
  • Ad creative development
  • Email and SMS marketing
  • LTV and profitable spend

division of responsibilities between an marketing agency and client when working together

Inevitably, conflicts will arise in some of these areas.

At a digital agency, creative best practices (which tend to favor low-fi, organic-feeling content) often conflict with brand guidelines (which lean toward higher-quality graphic design).

When both sides approach the relationship with an attitude of humility toward the other’s expertise, finding a compromise is much easier.

Communication: Building a Lasting Relationship

Finally, we get to the most important part of the equation: maintaining the relationship. The key? Treating your agency as partners, not servants.

I touched on this in the previous section. One of the keys to starting on the right foot is allowing your agency to act as experts in their field.

However, the fact that the client is paying the agency creates a natural power dynamic — employer and employee — that absolutely must be overcome for the relationship to flourish.

As the more-powerful part of that equation, the client has the greatest influence on the tone of the relationship.

Here are my “ten commandments” on setting the tone for a successful partnership:

1. Be kind (don’t be an asshole).

Don’t talk down to your agency team. Don’t belittle or snipe at them, even when you’re upset about performance. Don’t throw them under the bus in front of your boss. Being a jerk introduces an enormous, completely unnecessary impediment to your mutual success.

2. Praise your team profusely when they succeed.

This is how you become an agency’s most important client. People in agency life typically hear either intense displeasure or, “It’s fine.” If you give vocal, genuine praise when they do good work, they’ll be far more likely to direct time and energy towards finding new ways to win for you.

3. Be gentle when your team fails.

Don’t worry that you’re “letting them off the hook.” As someone who thinks obsessively about employee satisfaction in the agency world, I can assure you that your team has enough trouble letting themselves off the hook without a client compounding their guilt.

4. Build relationships with upper management.

The benefit of hiring a digital marketing agency relative to freelancers is that you’re getting more than just an account manager or a copywriter or graphic design help. You’re actually hiring an entire system built to win for you. Reach out to upper management. Ask questions. Get on their radar and you’ll be able to tap into even more of the agency’s insight.

5. Don’t force the agency into your process.

As much as possible, try to assimilate to the agency’s processes for communication, asset management, and creative approval. Productivity lives and dies by airtight processes. Managing multiple clients is a difficult task; the last thing you want is to toss a wrench into an agency’s carefully calibrated machinery.

6. Respect “work vs life” boundaries.

Agency life is incredibly demanding. If your point of contact doesn’t reply to a text at 10 pm, it’s not because they don’t care about your business. It’s because they can’t win for you without being intentional about their downtime. We call it “respect the rest.” And it’s one of our core values.

7. Hit your deadlines.

While many clients have no problem holding an agency to a deadline, it’s equally as important that they hold themselves to deadlines. On-time asset deliveries and creative approvals — as well as responsive, proactive communication — are indispensable.

8. Don’t ask for custom reporting.

This goes for any custom service not explicitly agreed upon in the contract. Tapping your agency for out-of-scope tasks may seem like a good idea in the short-term, but the distraction will take valuable time from the agency’s core tasks in the long run.

9. Don’t compete with the agency.

If you’ve delineated responsibilities properly, this might not be a problem. But when you or one of your in-house team is trying to demonstrate that they’re better digital marketers than the agency staff, it’ll result in relationship decay.

10. Don’t base your expectations on another brand’s success.

Every brand is different; every business situation is unique. Past successes doesn’t mean success is guaranteed, even if those successes are in a related vertical. All a case study means is that an agency’s knowledge and skill can create success.

A good agency will work with you to establish what it looks like for you to win, specifically.

Partnership: The Real Key to Explosive Revenue Growth

A true partnership — a relationship of equals, defined by mutual respect — is the fuel that powers growth.

As someone who started on the brand side, I know this for a fact: If you find yourself failing, and your instinct is to blame your vendors … that is where the problem lies.

I understand it. The instinct to search for blame in external circumstances is deeply human. We’ve all done it.

Nonetheless, blaming your agency or treating them as second-class citizens is a huge missed opportunity.

It’s a missed opportunity to grow your business. It’s a missed opportunity to forge great connections. It’s a missed opportunity to get to know your agency team as complete human beings — to be known by them the same way.

Take a gut check. Can you name off the top of your head:

  • Whether or not your designer has kids?
  • The city your account manager is from?
  • The life ambitions of your media buyer?

It’s ok if you don’t know, or you feel that you don’t have the relationship with your agency team to ask personal questions. The important thing is that you’re working towards building the kind of relationship where it wouldn’t feel weird to ask.

If the agency feels that the client is on their side — concerned about their wellbeing, allied in the pursuit of a shared goal — they’ll perform their best. But an adversarial client saps energy, and the agency simply won’t be able to do good, thoughtful work.

Likewise, it’s just as important for the agency to uphold these standards.

A bad agency isn’t bad because it fails to hit your growth goals. No one can guarantee a positive outcome.

A bad agency is bad because it fails to adhere to a benchmark of good communication and clear process.

Sometimes, client-agency relationships fail for reasons outside of anyone’s control — whether it’s unforeseen operational issues or simply a lack of chemistry. But if both client and agency share the desire to build mutual trust and respect, the potential for success increases dramatically.

If you’re the type of client that shares the values and characteristics I’ve laid out, click here to get in touch.

We’re already excited about building a partnership that’ll take you to the next level.

Taylor Holiday is the CEO of Common Thread Collective. A former professional baseball player who lucked into entrepreneurship over a decade ago, Taylor lives in Southern California with his amazing wife and three kids — “who are my world.” He’d love to connect with you on Twitter or LinkedIn.