The “11” Most Important Questions You Must Ask when Hiring a Digital Marketing Agency
What do I know about hiring vendors or digital partners? As a founder and owner of a digital marketing agency, I frequently pitch new business for us and have provided consulting to companies that sought help with their vendor selection process. I’ve also been in the final decision-making role as we hire outside vendors and partners for our agency. So yes, I know quite a bit about this process having sat on every side of the table.
There are plenty of good articles that list questions to ask prospective agencies, but many get down in the weeds about tactics and process. My goal here is to provide you with business-related questions that will:
- guide you through the selection process faster
- help you conduct due diligence differently
- put you in the mindset of selecting an agency that can be the best long-term partner.
This should help you to quickly weed out agencies that do not meet your needs and identify those that will be a good fit.
1. How do you measure success?
This is the big one, right out of the gates. This question has multiple implications, as it should incite a conversation focused on the goals of the digital program, metrics to be measured, and the benchmarks that need to be exceeded to declare success. Let’s break it down:
Simply put, this needs to answer the question of what should the marketing effort and money spent accomplish?
For most “for-profit” companies, the answer is usually sales, actual revenue accrued. For companies focused on revenue but with a very long sales cycle, then sales leads, free trials, and seminar registrations may be legitimate goals.
For nonprofits and branding initiatives, building awareness, exposure, and name recognition are also valid goals.
The data that is measured and tracked should directly correspond to the identified goals. There may also be supporting metrics such as website traffic, content consumed, and abandoned shopping carts that should be tracked and analyzed to better help accomplish goals.
These are the real-world results that deem success or failure. For revenue-focused programs, it’s cost per acquisition, revenue generated, and gross profit. You as the client need to be able to share this kind of data and should know your acquisition costs and profit margins. Here’s a little refresher on How Much Should You Pay for a Customer.
What you need to hear:
The agencies you interview must be speaking in these terms. If they don’t mention these along with customer acquisition costs and something more detailed than just “ROI,” they obviously don’t think this way first. This should raise a major red flag.
“What if you do not meet our goals?”
Acceptable agency responses: This must be a joint commitment by all parties to support all activities from marketing through sales, and to share all data. If goals are still not met after an agreed period that allows for ample efforts and data, with any necessary support from the client, the contract will be terminated. Another response may be “performance-based compensation,” which I’ll detail a bit later.
2. Do you have industry experience?
The answers to this could be a deal breaker, but not for the reasons you may think.
Yes, they do have industry experience.
If the agency does have your exact industry experience, you need to ask for samples of work, services offered, and results achieved. You also need to qualify if they would be providing the same approach for you.
WARNING: If you don’t like what you see or hear, stop now. Proceed no further. Expecting something significantly better and different is flawed.
Ask for the specific industry-related companies that the agency is currently doing work for now. Talk through any possible conflicts of interest with these companies and agency’s policy for working for competing companies in the future.
WARNING: If their list of clients includes companies you are already competing against in the marketplace, it would be a foolish approach to compete within the same agency for their best work and effort. Stop the interview.
No, they do not have industry experience.
While having industry experience is valuable, particularly when there are special nuances involved, it should not be the most important factor in the decision-making process. An agency with a proven track record that lacks your industry experience may instead bring fresh ideas and tactics to the table.
Having no industry experience shouldn’t disqualify an agency that checks all other boxes. Continue your due diligence.
3. How big is your agency?
Yawn. Yes, everyone knows to ask this, so let’s just get it out of the way and pose these pointed questions:
How many full-time, part-time, and contractors does your firm employ right now?
Again, not earth-shattering. With this, you’re simply trying to categorize the size of the firm and more importantly how many people could be committed to your account, with the possibility of redundancy if your contact leaves, is sick, or is too busy to help you adequately. However, the best answer to this question will likely differ for companies seeking an agency. A digital shop with a small headcount, say less than five, may be a good fit if you’re a small account, too. A much larger company may require big agency teams to really provide the hours of effort to achieve success. This should be couched as a very loose benchmark.
What are your gross billings? What are your gross billings for XYZ service?
This line of questioning will help form a better picture on the scale at which the agency operates, the budgets entrusted to them, and to, some degree, the level of sophistication they must have for a given service. And yes, every agency rounds up. As an example, let’s say you ask for monthly paid search billings. If the answer is $500,000 a month, it’s a fair assumption that they have far deeper experience and different types of clients than the firm that answers $10,000 per month. A further question is to ask the high and low of clients’ budgets for a single service, like paid search. Again, you’re trying to understand the scale at which they operate.
Do not make a decision solely based on headcount or billings. Use this in combination with some of the more critical questions. It’s the actual people assigned to your account who matter. I’ve hired some great small companies that a had a couple superstars that outperformed much bigger companies.
4. What digital services are you an expert in?
You may be seeking a digital marketing agency for a specific need. That’s okay initially, but your evaluation should focus on aligning with a full-service digital partner to grow with. Digital marketing is best achieved when multiple tactics work together efficiently. Trying to achieve this with multiple agencies is a far less efficient and usually more taxing approach, and likely to create bloat in fees.
Rather, you want to align your company with a digital firm that can offer the very core tactics with their full-time staff. Services should include SEO, paid search, display advertising, social media advertising, retargeting, and email marketing. Optimally, you really want a partner that offers marketing automation, content marketing, reputation management, influencer marketing, and web development so you have a partner that’s already performing services that you’ll likely need in the future.
To better scrutinize the agency’s expertise in these specific areas, ask which of these services are conducted via in-house, full-time staff, and for which do they have third-party certifications, such as Google, Bing, and HubSpot accreditations. This will quickly tell you their level of experience and commitment for providing each, and whether they have a team of experts who can communicate and pivot quickly, internally. If core services aren’t conducted by in-house experts, this probably isn’t the best partner for you.
5. What services are you outsourcing?
Outsourcing certain services is acceptable and, depending on how these are conducted, could even be beneficial. For example, if the agency outsources and seamlessly manages copywriting to industry experienced writers, this may likely produce better content at a more efficient cost than having an in-house writer attempt to write expertly to all their clients’ industries. Another example is technical development. If the agency seamlessly manages complex requests for specialty website functionality or mobile app development, it should not discount this agency that is being hired for marketing.
Outsourcing specialty services is fine and should not disqualify an agency from consideration. Outsourcing core digital marketing services is most definitely a deal breaker.
6. Who exactly will be on my account?
This question is no surprise but still a must ask. The traditional agency model is notorious for having senior level people pitch the business only to be serviced by entry-level, low-wage staff who typically agency hop every few months.
Request specific names of people who will be assigned to your account. Research them on LinkedIn to see their level of experience. While a mix of senior and junior is fine, you need the best. Don’t settle.
7. What software tools do you invest in?
Digital agencies rely heavily on subscriptions to online platforms and software (SaaS) to conduct research, buy media, analyze data, report on results, manage projects, and more. When you ask this question, you likely will not recognize the bizarre names of tools they list. What you’re really trying to understand is the firm’s level of commitment to investing in best of class digital tools. These tools provide a direct benefit to you.
Research the purpose, costs, and reviews of their tools to help get an inside picture of how the firm invests in their processes and clients’ successes.
8. What is your method of reporting?
The beauty of digital is that everything can be tracked, measured, and analyzed. This data should be provided to you in a report. Ask the following:
- How often will we receive reporting?
- Will reporting include analysis and/or a review meeting/conference call?
- Will we have access to any online reporting suites for daily reporting?
- How will your team make use of this data for improved results?
Request sample reporting and/or access to their reporting portal to see the format and level of detail that can be expected. You’re seeking an agency that is fully transparent in everything they do. Robust, accurate reporting is critical.
9. Why will your agency be in business the next five years?
This answer may change slightly depending on the seniority of who you ask, but any staff member should be able to provide some answer. Assuming they tell you that they are 100 percent sure their agency will be in business five years from now, you can ask follow up questions such as:
- How long have you been in business?
- What is the average tenure of both clients and employees?
- How many clients are signed to multi-year or annual contracts?
- What is the range in cost for these contracts?
- Are there formal forecasts of future annual revenue, growth, expansion, or offerings?
These all can help project future stability and simply get a feel for how they position their agency. You want a long-term partner that can learn and grow with your company and in some respects will know your business better than you.
You may want to be wary of agencies that are in their first year, since 80 percent of all new companies never reach a second year. Conversely, you may want to be wary of firms with retirement-aged ownership. You could find yourself in the middle of an acquisition, a change in leadership, downsizing, or cease of operations.
10. Will you work for performance-based compensation?
First let me define performance-based compensation. In simplest terms, the agency’s pay is directly based on the results they achieve. For example, both parties agree that $1 million in new sales must be attained. This is the benchmark. If accomplished, the agency will be compensated $200,000. If they do not, they will receive much lower compensation and if they were overly confident or just bad deal makers, no comp at all. There are many variations on this model, which may include base compensation, guaranteed compensation for outside costs, and even tiered bonuses when benchmarks are exceeded. Think of this like the base salary, commission, and bonus structure of a salesperson.
When my agency is pitching new business, I’m not generally fond of this model in year one with a new client, since I’m not very familiar with the quality of their offering, their internal processes of tracking sales back to marketing, and respectively speaking, the commitment and expertise of their people. Too many unknowns. Year two may be a different story.
That said, you should ask the question to hear the response and possible scenarios the agency offers, to see how confident and committed they are in making you a success and exceeding agreed upon goals. This signifies a mindset for truly partnering in a mutually-beneficially relationship.
If you are serious about pursuing this model, understand that this becomes a two-way commitment in sharing revenue data, operational information, and any skeletons in the closet.
Use this as a probe to gauge the agency’s level of confidence and partnering. Ask if they have been successful in this type of relationship before.
11. Question for yourself: Do you like this team?
Yes, it really matters that you like the people you partner with, the overall vibe of the agency, and their reputation. Respect in all dealings, from communication and explanation of the complex, to handling budgets and results, really matters. While difficult, you’ll want to try to assess how you think they will respond when you need to press them for something, warranted or not. Ask questions related to customer service, multiple points of contact, and their expectations of you.
I hope this article helps in your search for the perfect digital agency partner. Arc Intermedia also provides vendor selection consulting. More info can be found here:https://arcintermedia.wpenginepowered.com/services/consulting/