10 Reasons Marketing Leaders Use Contractors & Agencies

In our original study of how modern marketing teams distribute over 50 marketing capabilities, we carved out a key question to ask leading marketers: When–and why–do contractors or agencies get called in to share the load?

Their Top 10 Answers:

Responses by Segment:

Small Business Marketing Leaders (up to $38M)

Midsize Business Marketing Leaders (up to $1B)

Enterprise Business Marketing Leaders ($1B+)

Takeaways

Process expertise is table stakes. Across all segments, this reason for leveraging contractors or agencies ranked highest. Marketing leaders bring in firms or individuals to perform a role when they effectively can't. Probably no surprises there. But the descending reasons marketing leaders give for selecting external entities reveals a mix of opportunities, potential blind spots and risk areas for contractors and agency leaders.

Opportunity Areas:

• Speed. Marketing leaders want to be able to access a fully formed capability faster than it would take to align internally.
• Cost. Marketing leaders perceive a net savings with an agency where the process will require more trial and error (i.e. hidden costs) to attempt in-house.

These opportunities can give contractors and firms insight into how they can position themselves for new work. Assuming expertise is "table stakes," what are the prospective client's expectations around timing and value? What is the client's perception of how fast and economical they would be operating internally on their own? Anticipating these values and learning more about a prospective client's calculus can surface competitive positioning advantages.

What is the client's perception of how fast and economical they would be operating internally on their own?

Risk Areas

• Flexibility (Or "Choice"). Marketing leaders say they want options. They want to be able to access various capabilities without committing full-time resources. This may not come as a surprise, but we're labeling it a risk for agency leaders who might over-invest time and resources into "winning" business that simply isn't on the table yet. Watch out for marketing leaders who are just browsing.
• Capacity. This one goes out to contractors or firms with a tendency to take the ball and run away with it. Some clients are not looking for "new." They're looking for more capacity—more bodies, if you will—to run playbooks that already work pretty well for them. When selling to this type of client, innovation is not the goal. Instead, you need to offer more of the same quality as their current operation.
• Clarify a FT Need. Small and midsize companies use agencies to produce work from time to time while they audition whether it makes sense to bring the same work in-house. This means a contractor or agency may bring great value to a client in the form of expertise and speed. But, with time, you still run the risk of being replaced regardless of the quality of your work. According to our data, this sort of replacement risk is not as present in enterprise organizations. One explanation is the sheer size of enterprise operations. External contractors and agencies are required at practically every level of the business and are therefore less replaceable. But for agencies serving small and midsize companies, this is a good reminder to 1) keep new business pipelines as well stocked as possible and 2) communicate with clients often about their perception of the value you're bringing. Doing so will help minimize the sudden shock of losing an account—and adjust beforehand.

Anticipating these risks and learning more about a prospective client's intent at each stage of the relationship can reduce account losses and strengthen business development efforts.

All content © 2023 The Cape Agency LLC