5 Questions to Ask When You’re Hiring an Agency

[00:00:00] Richard Gaffin: Hey folks, welcome to the e commerce playbook podcast. I'm your host, Richard Gaffin, director of digital product strategy here at CTC. Before we get into this, if you've clicked on this podcast, you know that the title of this is five things to look for when you're hiring an agency. And if you're at a place where you're not ready to hire an agency yet, don't hit stop.

Don't skip this episode because there is a service for you with CTC. If you're not quite at that point, it's called admission. It's a combination of training center, And a way to get access to our people one on one. So you can be part of the CTC community, even if you're not ready or at a place to pay our fees.

So all that to say, this pod still applies to you. Go to youradmission. co and click the hire us button. You'll book a call with me. We'll jump on the phone together and determine if your brand is a good fit for us. Okay. Onto the show. 

Taylor. Our CEO is here with me today. And as I just alluded to, we're talking about 5 things to look for when hiring an agency.

And I know we've talked about this maybe on a previous episode, maybe a year and a half ago, maybe more. But part of what we want to discuss is maybe how some of our, you know, how, how we've changed in our thinking about what you should look for when hiring an agency and maybe specifically some ways that we've changed.

So, the impetus for this discussion was a graph that was going around. We were discussing it recently that showed the overall tenure of our people here at CTC and in the last. A couple of months this year, basically the average tenure of 1 of our people is, I believe, 35 months. Is that right? Taylor some along those lines.

[00:01:31] Taylor Holiday: Yeah, I think, I think we topped out at 36 months last month as an all time high in the history of CTC for the average tenure per employee of CTC.

[00:01:39] Richard Gaffin: And so we're reflecting on that. And we were reflecting on the ways that CTC has really evolved and really change it to something that we're really proud of. Not that we weren't proud of it over the years, but it's certainly grown into The type of thing that we were expecting, or we wanted it to grow into at the beginning of this journey.

And so we got into a discussion about how the tenure of our people was maybe involved in that. So maybe Taylor talked to me a little bit about this graph, how it kind of came to your attention and how it got you thinking about this particular subject.

[00:02:08] Taylor Holiday: Yeah, our employee development team led by Dane Sanders, who, if you haven't listened to Dane and Orchid's YouTube series, you should definitely do that on, on YouTube. People but they put together a set of human related data for me as part of their job. Everything from turn to DEI metrics to all sorts of different things that we look at together to understand the performance of our people.

We have a monthly survey for progress, like all the different human related metrics. And one of the ones is the average tenure of our team. And we had sort of been having this. hypothetical conversation about the idea that we felt like there was an experiential difference in the quality of CDC's work right now related to the experience of the people.

And we didn't have the exact validation of that feeling until we saw this graph and it sort of, it's funny, the graph overlays, and I don't know, Corey, if you're going to put it in the show notes or where we can add it it overlays. So much of a story of CTC in so many interesting ways, right? Where you have the graph that just stair steps up every month for the first 27 months, when it was basically me, Jordan and Corey.

And so like the three of us were there every day. And so the graph just goes up and then you see our first hires and the average kind of drops way down. And. then it sort of grows naturally over time. Then in the COVID era, when we were hiring so aggressively, we got down to the average tenure of an employee being about one year, which was sort of the lowest it ever was.

And what it reflected was that there was a point for CTC where we were almost 200 people and we had 50 percent of the staff of CTC had been hired within the last year. So a hundred people had been at the company for less than a year. And what that Fundamentally means is that there's a lot of the experience of the employees of CDC, where they are still learning to do the job. And the amount of customers that are experiencing those people becomes a higher percentage of the overall book of business. And there's a relationship there because. Any agency, and this, this is like less about the quality of the humans involved at all. And more just to say that you get better at things over time.

And so your experience matters. And so as those repetitions of learning to solve novel problems, understanding the dynamics of great customer service, understanding the unique way in which CTC does what we do. There is definitely a relationship between this metric and the quality of the work

overall. 

[00:04:35] Richard Gaffin: I think one way to say it maybe is that at a certain level, or when you're maybe at the average tenure that we are right now, most of the people who are working on accounts aren't expending any energy learning how to be a part of CTC or be a part of our system. And so they may or may not be able to solve your specific problem, but what they're not solving is how to be a part of this organization, how to work within the system.

And so as that tenure goes up, the likelihood that you'll get somebody who's not. Sort of in the process of figuring themselves out is going to become much higher.

[00:05:05] Taylor Holiday: Yeah. And the reality is, is that we have this thing that especially people from the brand side, and this is not to knock people. If this is your only career experience, but they often come with what we would call experience

debt. Which is that their experience in their previous role actually is something to be overcome, not something super useful because when you've worked in one dataset and especially if it was really successful, you tend to think that you can apply that same roadmap to every problem, but it's really just not the case. This is such a wicked environment to steal language from. The book range where every business is really novel in the way that it needs to be approached and solved. And so there's a framework for thinking about it. But previous experience often doesn't lend itself to accurately to the specific problems. And so it just takes people time to get a breadth of repetitions, a breadth of problem solving to develop the kind of thinking. That necessitates being really good at this job. And this is, there's a narrative, like I think in the public sphere where you'll hear people talk about like hiring small agencies and are like this, like, or even individual freelancers.

And I think what in each case people are after is experienced quality work. Right. And so there's this idea that if it's a small shop, that's been together for many years, that like they have this high bar of work and that often can be the case, but I think that the real thing you're after is. How experienced is the person doing the work in the job that they're doing? And how much can I trust that they'll execute it at the level that's consistent with what's being sold to me? The

[00:06:35] Richard Gaffin: Right. Yeah, that makes sense. There's a quote that I think about a lot relative to this from Raiders of the Lost Dark where Indiana Jones says, it's not the years, it's the mileage. And I think that there's a certain extent to which the type of experience that you'll get at a place like CTC is the type of experience that allows you then to become a problem solver, as opposed to somebody who's experienced in just maybe doing repetition of a particular, I don't know, system that they've been taught or given.

Right. So, 

[00:07:01] Taylor Holiday: Yeah. let's just think about it. Like, so

I I'm working on, there's just this beautiful dichotomy. If you listen to the last two interview episodes, our GQ episodes on Thursdays, where we did one with Alan Doan from the Missouri star quilt company. And then the most recent one coming out this week is from Demetri Oh, who leads marketing at loop earplugs. And these are both nine figure e commerce businesses led by really incredibly smart people. One of them every month generates 90 percent of their revenue from existing customers. The other one every month generates 90 percent of their revenue from new customers. Like the experience of how the business grows in each of those cases exists on separate ends of a spectrum on which all brands exist that until you have seen. The bounds of possibility here. You don't really know how to interact with a brand in their present stage and the components of it that would make it work. And if you came from one of those environments and place them in the other, it would feel like a foreign atmosphere. It would feel like you left earth for Mars because the way in which they grow and the mechanism for growth are so fundamentally different.

[00:08:17] Richard Gaffin: okay, so maybe to go back to the kind of theme of this podcast or this episode, which is five questions to ask when hiring an agency. And that's what we're saying is there five things to ask, not necessarily five reasons to hire us, but they are five questions. You should ask us if you were to hire us. So one is a question around tenure.

How long have your people been here on average? But then, of course, like we're alluding to, it's not just experiences. What are they experienced doing? Which leads us to. Okay. Point number two, the question to ask, which is around methodology. So Taylor, maybe dig into this a little bit here about what questions should you ask around?

What is this agency's methodology? Yeah,

[00:08:51] Taylor Holiday: Yeah. So I think that. There's a great book that if you really want to think about hiring an agency, you should read called managing the professional services firm. Okay. And this is, it looks like a boring book. I've referenced it before on this pod. And what it describes is that human services business exists on the spectrum from let's put one end, which is highly consultative novel problem solving, where it's basically hire the smartest people in the world.

And let them solve problems in unique ways. And think of that as like McKinsey. Now I understand that McKinsey has some frameworks and things like that. So it's never absent any of that, but it's just to say that it tends to lend more on the thing you need to evaluate is the quality of the person that you're interacting with. Okay. The second end of that spectrum is like, let's, the metaphor I'll use often is like H& R block or tax processing, where it's literally like, it might as well be software. It's so checklist, right? It's like any human is walking through a set of various prescriptive steps. And the idea is that you can get lower cost labor performing highly operational work in a way that is repetitive and the same. The question I would ask the agency is which one are you? Because that's how I should think about evaluating you. So if you tell me this is a highly consultative practice where we let smart people do novel solving problem, well, now I'm interested in the resumes and the experience and the comp of the people involved in the work.

Like how good are these people? Now, if you tell me it's highly operational, now I want to evaluate your process. Tell me about the system. Right? And so I think the question that you want to get after is, What is this? Is this a system or is this people, or if it's some combination, tell me about how they interact with one another.

So I know which part of this to evaluate. So for CDC, as an example, we are trying to, in every case all the time. Operationalize more and more of the work and layer on then smart people to adapt the system as the primary thing that they're working on all the time is improve the product, not leave them on an island to solve novel, novel problems, build spreadsheets that only get used once all of that stuff. So I think the mistake that people make in interviewing us often is they don't. Scrutinize or critique the process and the technology enough and the system, they focus too much on the people. Whereas I would say for us, we actually depend a lot on our profit system about that product that I, if I were people, I would really go after understanding the database structure, how it works, where the information, how it informs decisions, talk to me about these models. And that's, that's where the conversation is more and more are pressing towards is tell me about the information that's driving the decision making and how it gets constructed more than tell me about the experience of the individual. But I think understanding which one this is is really important.

[00:11:33] Richard Gaffin: so that then I think leads to another question about which one do you want? So the, the sort of analogy I think about with this all the time is you can always get a good cheeseburger at In N Out Burger. And they hire, they're not hiring Michelin star chefs for that, but it always works. And if you get a great, you go to In N Out, you get a great burger for those Californians.

Now, if you want to go to a Michelin star restaurant, those people are hiring the best of the best of the best to produce that outcome. Both are different things. Both are good for what they are. So when you approach an agency, how do you know which one you're looking for? Do you want a cheeseburger or do you want a, you know, a celeriac ring?

What are you, what are you looking for?

[00:12:11] Taylor Holiday: So this is such a good question. And this is actually, I think the primary problem that brands have in hiring an agency is they don't know the answer to that

exact question. They don't actually know what they're looking for. And so they don't know how to find it because I'll give you a distinction.

There is a massive difference. Between a brand that comes to us who has product market fit, who knows their marketing calendar for the next 12 months, and it's looking for a tactical partner to help them execute excellently against that problem versus somebody who comes to us and is like, we have a product it's pretty good, but we don't really know who it's for.

We don't have the creative messaging. There is no marketing calendar. Those are fundamentally different needs in terms of the partner that you look at. And I'll give you an example. I just got a DM for a conversation. That reads like this. Okay. This is, this is a lead conversation. I'd like to chat about our brand, some of the background we're approaching, you know, a mid eight figure number with solid EBITDA. We don't have a CFO. So all the responsibility falls on me. This is a marketer speaking. We'd love to get your perspective on ways to trim back spend efficiently so that we can achieve max profitability while still seeing some growth. We're growing this percentage this year. We're way ahead in this month. I keep running into this challenges. I almost need a daily reporting doc or something I can use to help make better decisions on my business. That is like, if I could write a need scenario for the CTC profit system, it's that thing right there. Right? We're growing, things are working pretty well. We need more visibility into how the dollars are being spent and make sure that we're being disciplined about marketing efficiency and these different things.

And I need a daily way to view this. If I could like literally write a script about what your problem set should be, that would be it. Right. Whereas if you came to me and it's like, Hey, we need to, we don't know what our brand message is and who our target market is, that can be more complicated. It's not to say we couldn't help solve that problem, but our profit system is uniquely designed for the other one.

And so I think it starts with really beginning with clarity of the problem that you have. Do you need someone to solve a problem that's not yet solved? Or do you need a system for a way of working that will help you get where you're already trying to go? And I think oftentimes it's just sort of like, well, I just, I just need a, I just need to grow.

And I don't really know. So who can help me with that very broad problem set.

[00:14:28] Richard Gaffin: Yeah. Okay. So actually let's, let's then go, cause I think this segues well into one of our other points, which is. Past methodology. We go to the ability to produce your defined measure of success, which is essentially kind of what you were getting at with that, the answer to my previous question. So one issue that we can run across with some clients is they'll come in and they'll have a very specific thing that they need to grow, that there may be beholden to their bosses to say like, Hey, this number has grown, but our, our methodology, our system is not set up to grow that number.

It's set up to grow something else. Which contribution margin, basic or profitability. So. How would you go about assessing whether or not an agency is built to produce the thing that you need them to,

[00:15:09] Taylor Holiday: That's right. So again, going back to this idea that it is on you to define your problem as much as possible, or To with clarity, describe the outcome that you want. And then maybe someone can tell you what's preventing you from getting there. So maybe it's not about defining your problem, but it's a defining the thing that you're after as a business. What I would say is that we have certain tools and systems that are all predicated on reporting towards a certain. Set of information and it is a financially related system. So if you come to us at CTC and say, we want to improve our triple whale total impact ROAS, or we want to improve our GA last click ROAS. We are going to really struggle to build an informational system and a set of behavior to help you impact that outcome. We just, we don't report on it. We don't track it. We don't have decision making frameworks for improving it. We don't even really understand it in most cases. And so we're not going to be the right partner.

Yeah. If you say, Hey, we're here, we'd love to improve our overall profitability or our contribution margin or any set of related financial terms, we're going to be really effective at that. We have a lot of tooling built around that idea. Whereas a lot of people don't, I don't think they have ways to absorb your costs and build the right structures and track and measure and report on these things every day instantaneously. So if you understand what you're after as a business, you can find a partner and you can ask them to show you how they will report on that specific information and how mature it is in doing just that thing.

[00:16:36] Richard Gaffin: Okay. So let's, let's maybe pivot away from. From methodology and success measures to just like our questions about the organization as a whole. So we have our third point here. Our fourth point now is organizational integrity. So this is an interesting piece because it seems like it would be difficult to assess from the outside.

But if you're approaching an agency, how would you make sure that the way their organization was structured? Would set you up for success when you joined.

[00:17:04] Taylor Holiday: So whatever the person speaking to you shares as their methodology, what I would scrutinize is how connected the operationalizing Is of the organization against that ideology. So at CDC, a good example of this is cost controls. Okay. So we believe that the, one of the best ways of doing meta media buying is utilizing cross controls. So then the question would follow is what percentage of your ad dollars are spent on cost controls, right? And in the instances where there are not, why? That would be sort of an example of a line of questioning that I would want and expect an answer to. And we, we track these things. They matter to us because it is important that our people do the thing that CTC, Is proclaiming to be the most effective and it's really easy.

Clients will drive you towards all sorts of crazy behaviors. Like if you just allow them to dictate the pace, but we have a belief in a system, the way that we want to work. That's really important. So whatever it is now, this, it could be how they structure P max. It could be their belief about email, whatever it is.

What I would ask is tell me about how you are tracking the implementation and application of that idea. In your organization. And what are the rates of success and when it goes off the rails, why? Because it is in an agency, the hardest thing to do as I say, this is somebody who's led an agency now for over a decade is to get a group of people to behave consistently around different information. Because if we allow humans to just make subjective decisions about data, They will all interpret it differently. That's just what it means to be individualistic, right? Versus a collective to borrow the the name there. So I think that understanding how the organization Obligates and tracks people towards collective behavior. Again, unless they're telling you that we are just a collection of really smart people and they're all allowed to do whatever they want. In which case then the entire thing is about evaluating the specific person you're going to be working with.

[00:18:59] Richard Gaffin: Okay. So for those of us who are like, let's say somebody is coming to assess CTC's organizational integrity. And of course, in the past, like I, when I was on growth teams, whatever I've been in situations where the sort of subjective need of the client.

Overrides the system in place or the sort of stated ideology. And we've put a lot of things in place to make sure that doesn't happen before. So let's talk through like what specifically at CTC, what are the tools that we have in place that allow us to avoid those situations and to hold the, hold the course when it comes to, let's say running cost gaps or something.

[00:19:32] Taylor Holiday: Yeah, it's a, it's a great question. And what I would say is I repeatedly tell people that their job. Is first primary employee of CTC. Then the client is a vendor of ours, right? But they work for CTC, which is means that their primary job is to deploy the methodology of CTC. Now, does this mean we want to bludgeon customers with things when they're making requests of it?

No, of course not. We want to have conversations. We want to educate, we want to have dialogue. And in some cases we will capitulate to the idea that like, it is so critically important to them that they run this alternative test that we'll make. Accommodations for that. But what I also tell them is that they should feel that they have resource in myself, their manager, their director, their VP, to bring them into the conversation when the customer is asking for an alternative point of view. Cause we, we don't have the expectation that each individual should be able to win an argument over an ideology with every level of the organization. So oftentimes you'll get a CEO of a big company coming in and talking to a media buyer. There's a hierarchical difference of authority and power in that conversation that oftentimes they need to feel the freedom to match that with where, look, the end of the day, a lot of this is my methodology that I'm willing.

I sh I should feel totally comfortable coming in and defending why it exists for our organization. And so I'm happy to do that. And in some cases it requires that in some cases there are, there are, again, we allow them things to run or test side by side. And then other times it's like, Hey, it's clear.

We're not the partner for you. If what you really want to do is have us measure everything on GA last click. And again, I'm just using that as an example. So, I think that the, the key is to one, have clarity of the expectations of our people so that they, and to track and report against it. So as an example, one of the things we believe a lot in is tracking daily performance against expectation. And so we use this tool that we call the growth map. And every day our media buyers have to do something called one map, which is that in the morning they have to update the customer on their performance to expectation across a series of inputs. We track percentage completion of that expectation. Okay. So I can see in a report every week published by our ops manager about whether who is or is not doing that and why, and then we can go and reconcile against it. Same thing against the utilization of cost controls or different campaign structures or these different things so that we have visibility proactively to those problems.

So if anything deviates from that, we are proactively engaging into why, but also we have opportunity or resource for people to, to because we're all leadership is in every Slack channel. Able to say, Hey, I see this dialogue occurring here, tag me in, and we're happy to join a conversation about why we believe what we believe.

We also have a lot of materials, videos, podcasts, content, blogs that people can share to help. Educate as well.

[00:22:15] Richard Gaffin: Cool. Yeah, I will say too, like my experience, the, the willingness of senior leadership to step in and help is a huge, huge part of the ability for the organization to actually execute on what, what it says it's going to. So, let's jump into our final. Bullet point here and here at this, I just haven't written my notes as comp period, but this goes back to the discussion we were having earlier about what kind of service are you, are you hiring a, and this is maybe one method of determining what that is.

So let's talk through maybe what you're thinking when it comes to the idea of comp at an organization, how it relates to this.

[00:22:51] Taylor Holiday: I think that in order to make a great decision about an agency, you have to have a very clear understanding about the market for talent in our industry. So what do I mean by that? In the e commerce sector, we are in the people services business, which means that we hire media buyers, growth strategists, creative strategists media buyers across multiple channels, ops, experts, et cetera. And there is a market rate for those people such that in the event that we are not competitive at the highest tier, the highest tier talent will leave and go find alternative comps. So if you understand what the rate is for a media buyer, let's just use a meta media buyer as an example. And you understand what the market rate is for talent, and you're going to hire an agency. If you find out or able to determine, and there's two ways to do this. One is to just ask, you could just ask how you compensate your people. What are their incentive structures? What is their base comp? So that you can get a sense of where that talent sits in the market. Two is to understand your pricing. If you're pricing, I can tell you the way it works is just a markup on the cost of the people. And so if your pricing is really low, it means one of two things. Either the agency's not making money or two, the labor's cheap. I get that there are periods of potential arbitrage where talent, this could be from offshoring or other things can outperform their price for a period of time. But we live in a world where that market right sizes really quickly. I would have a high expectation of churn if you had really talented labor that would be, is being paid cheaply. Eventually they will realize that and alternative options will reveal themselves. And so we actually think, and I I feel like I've learned this over time, is that the compensation of our people is at the high end of their ranges in order to compete for market talent because that's the quality of our service. And so it actually matters to me. That our people are paid well, relative to their other options because they will explore them. That's the reality. It's like they will explore alternative options relative to the market opportunity that exists. And I just think that if you understand that a market opportunity, you can make some assumptions and understanding about the quality of talent that you're working with. Because. There is so much opportunity if they're underpaid relative to their skills for them to pursue options elsewhere. And so I think that just understanding those dynamics about the market and how that shows up in your price and the quality of work on the other side is a way to understand the likelihood that you're going to have the same person

working for you for a long time.

So it goes back to that tenure idea. How likely are they to stay in this job? And two, what is their experience level and optionality that led them to the job that

they're in? 

[00:25:26] Richard Gaffin: Okay, cool. So let's, let's quickly recap then. So we have the five questions to ask are one tenure. What's the average tenure of the people at this place? Two methodology, like what is the overall philosophy? What is the system that they've put in place? Do they even have one? Three is, does this system have the ability to produce your defined measure of success?

Is there actually synergy there? Four, do they, does this organization have the integrity to actually uphold and implement this system? And fifth. Using comp or using sort of average market rate as a way to assess what type of organization this is, is this sort of again, is this creating the cheeseburger?

Or is this creating the like super nice Michelin star bite on your plate? Right? So

[00:26:08] Taylor Holiday: That's right. 

[00:26:09] Richard Gaffin: more of something more cranked out or is it something more bespoke? Now, I think there's a question that remains is those are the five questions to ask. Who do you ask them of? So obviously the answer is at least partially just the agency themselves, but then you, you also have this, maybe a specific referral way to think about this, like talking to a current client, previous clients.

So maybe talk through that, like, who do you, how do you

gather this info?

[00:26:31] Taylor Holiday: So if I were to ask for referrals from an agency partner, and one of the things that I've been a lot of Slack channels where they're just, you know, these groups, Slack channels that are throughout our industry, and I am blown away at how much someone will add lob a Slack question. Hey, has anybody ever worked with client XYZ or vendor ABC? One person will respond. They may or may not know each other. They'll have something positive or negative to say, and it's like, awesome. Thanks. And it's like, that's it? Like, there's no way, there's no way that you can get your answer to the question. That way. Instead, I actually think this is like a very intimate process that requires time and thoughtfulness. And so anytime I was asking for a referral, I would ask for three things. One, I would ask for a client that's been with you for a long time. In an agency world, that means two plus years talk, because I want to know when it really works. Why does it work? And that's what I'm going to talk to that person about what has made it so productive for you?

Why has this relationship been able to last? Okay. Second, I would ask for a referral to a new customer. Someone who just started in the last three months. I want to know what onboarding is like and how to set my team up to be as successful as possible. Three, I would ask to speak with a client who's fired you in the last six months. What went wrong and again, what I'm not looking for is any one person to tell me, or is this brand good or bad? I actually believe that that is my responsibility to ultimately make the decision as the leader of the organization. I am looking for insight I am look. I'm not looking for conclusion. And this is really important.

I'm looking for insight. Tell me why it went wrong Cause I might find out in that message that it was actually, it sounds like maybe you weren't like for this job, right? Like there's always two sides to a failure. So, or when it went really well, what did you do really well? What did they do really well?

Who were the people that worked on the account? These are the various elements. So your job is to gather as much information as possible to help you make a decision. And I think those three sources are really useful.

[00:28:26] Richard Gaffin: Awesome. Cool. All right. Well, I think that kind of wraps us up for the day. Taylor, any final thoughts you want to leave with the folks when it comes to this issue?

[00:28:35] Taylor Holiday: No, I just I think one of the things that happens is I see the narrative around hiring always dissolved down to a couple of things. One is case studies and two it's can I meet the team? And one when I go into these, can I meet the team meetings? I'll tell you this. Y'all aren't doing very good interviews.

It's a bad, bad interview. Method for actually getting to know these people and what their job is and how they're going to think. I don't actually like think about how much work you do when you actually interview an employee, you go through multiple rounds, you have them complete an assessment like that. It doesn't happen in this process. So I don't, I don't think it's in theory, the idea of meet the team is really good. But I think that it's problematic in the way that it's executed again. So, and then case studies, I think are the worst part of our industry. I don't think that you get nearly the same.

The level of insight you need about why that relationship actually worked out the way it did. And there's credit in all directions that is like incorrectly inferred and in the stories are revisionist history at best on both sides. So I think that there's just a, there's a deeper sense of how healthy is this organization and how well is it going to deliver on what it says it's going to. And how well positioned am I to work with them based on the way that they work.

[00:29:41] Richard Gaffin: Yeah. Cool. Well, you got our answers to these five questions. And of course, if you want to work with us, you want to have that discussion further about what it might look like to be a CTC client go to our website, commonthreatcode. com, click the hire us button. We're happy to start talking with you about it.

And yeah, thanks folks for listening. We will see you all next week. Bye bye.