Holding Your Marketing Agency Accountable: A Guide from an Experienced Agency Owner

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In the dynamic world of digital marketing, the relationship between businesses and their marketing agencies is pivotal. As someone who has navigated the marketing industry for over six years, serving more than 250 clients, with a staggering 95% of our business coming through referrals, I’ve learned the importance of accountability in these partnerships through the shared stories of what doesn’t happen when agencies aren’t held to certain standards. Below, I will dive into exactly how business owners can keep their marketing agency accountable, fostering a relationship that drives mutual success for both companies in the short and long term.

Understanding Accountability in Marketing Agencies

Accountability in a marketing agency context means the agency is responsible for delivering on its promises, providing measurable results, and communicating transparently with its clients. It’s a cornerstone of trust and performance in the client-agency relationship, ensuring that both parties are aligned and moving towards common goals. It is far too often I speak with business owners who face some of the following problems with marketing agencies:

  • They don’t know what their own company goals or metrics are.
  • Their agency can run ads but can’t produce creative to their liking, yet they still pay them for it.
  • Their agency isn’t willing to jump on calls or reply to messages quickly enough to troubleshoot things.
  • The reporting they routinely receive is vague, misaligned with the company goals, or flat-out hides the areas for improvement.
  • The agency doesn’t consider things outside of its scope as part of its routine feedback and consulting, allowing the brand to prosper without constantly trying to sell it.

Reporting Methods and Frequency

Regular and transparent reporting is non-negotiable. A reliable marketing agency should provide comprehensive reports that cover performance, financials, and progress towards goals at a bare minimum every single month. Depending on the size of the client, weekly or bi-weekly reporting may make more sense. These reports should be frequent enough to keep you in the loop without overwhelming you with data distracting you from your day-to-day or the bigger picture. 

Reporting should include metrics relevant to your business, such as but not limited to CPA, ROAS, MER, blended acquisition cost, month-on-month growth, opportunities for improvements, bottlenecks, and recent wins. In short, the reporting should cover both what you need to know as a business owner at a high level and what you need to know at a micro level that the agency is either aware of accomplishing or working to improve. If your agency only focuses on sharing things like impressions, top-performing creatives, clicks, cost per click, and ROAS, then RUN. 

Speed of Communication and Deliverables

Timeliness in communication and project delivery (even if it’s ad creative for your ad campaign) is crucial. Set clear expectations for response times and project milestones from the outset. A good rule of thumb is a 24 – 48 hour response time for communications and a pre-agreed timeline for deliverables. This ensures that projects move forward efficiently and that any issues are addressed promptly. I almost always toss this back to my own clients, saying that we WILL always meet these standards and want the same from them. At the end of the day, we are all business owners looking to grow and prosper, and we can’t do it without mutual collaboration. 

If your agency can’t meet realistic turnaround times, depending on the deliverables you’re after or speedy communication via platforms like Slack or jump on calls within the same calendar week, you’re likely setting yourself up for a situation where when you need them the most, they won’t be there for you. Unless you’re one of their biggest key accounts, setting this expectation from the beginning and getting aligned on this is really key to setting your relationship up for success from the beginning. 

Metrics That Matter

Not all metrics are created equal. It’s essential to differentiate between vanity metrics, which look impressive but offer little insight, and actionable metrics that genuinely measure success. Your agency should focus on metrics that align with your business goals. More importantly, these metrics should be highly transparent. 

I just audited a company doing about $5M a year the previous month, and on the surface, the return on each dollar looks great. Once I opened the hood and asked a few questions, 70% of the claimed sales reported revenue that would have come in. Had this agency had more transparent reporting on NEW customer acquisition costs and similar metrics, the owner may have had a clearer picture of what was really going on in his business. 

Some metrics I think are important to request from your agency for a high-level business overview when advertising are:

  • Blended acquisition cost
  • Contribution Margin
  • Breakeven ROAS
  • Breakeven MER (Marketing Efficiency Ratio) 
  • Breakeven NC-ROAS (Return on ad spend)
  • Breakeven NC-CAC (Customer acquisition cost)
  • Target ROAS
  • Target MER 
  • Target NC-ROAS (NC = New Customer)
  • Target NC-CAC

Advisory Beyond the Scope

A marketing agency that advises on factors indirectly affecting their services adds immense value. For instance, if they manage your ad campaigns but notice your website has a high bounce rate, their insights into potential causes and solutions can significantly impact your overall marketing success. This holistic approach can uncover opportunities and challenges you might not have noticed. 

A lot of times, brands can’t scale beyond the basics. It may be they have a bad website UI/UX, their emails are not set up, they are not trying other marketing channels relevant to their business, and so much more. As a guide, try calculating these metrics or asking your agency if they consider the below metrics when trying to optimize your advertising funnel:

  • Outbound click to landing page view ratio
  • Content view to add to cart ratio
  • Add to cart  to purchase ratio
  • Add to cart  to initiate checkout ratio
  • Initiate checkout  to purchase ratio
  • Email capture as a percentage of total web visitors
  • % purchases from welcome email capture

Collaborative Goal Setting and KPIs

Beware of “Yes” agencies that agree to all your ideas without question. The real value comes from agencies collaborating with you to set realistic, achievable goals and key performance indicators (KPIs). They should be willing to provide honest feedback and guidance, helping steer your marketing efforts towards what is genuinely beneficial for your business. When calculating your ROAS or customer acquisition goals, ensure they really dive into your business to create numbers with your business at the forefront. Below are a few things that must be taken into consideration to create realistic CPA or ROAS targets:

  • Is the product consumable or a subscription? If yes, then see sub-bullets:
    • What’s the LTV?
    • What’s the churn?
    • What’s the average time between billing cycles?
  • What are your product cogs, and was that factored in?
  • Did they take into consideration agency fees in the model?
  • Did they create a break-even vs. profitable model that considers net contribution goals?
  • Did they consider things like refunds, processing fees, returns, etc?

Aligning Goals Between Your Business and the Agency

Ensure your goals and the agency’s incentives are aligned. For example, compensating an agency based on the percentage of spend can sometimes incentivise increased spending rather than focusing on efficiency and results. Discuss compensation models that motivate the agency to work in your best interest, aligning their success with yours. As an example, we’ve built a custom model that dictates paying us on gross profit, which also allows us to create a unique model for each client based on the following variables:

  • Product gross profit margins
  • Scalability of business (opportunities) 
  • Current spend, AOV, current CAC, and current profitability

The Power of Recurring Meetings

Regular meetings are a forum to review progress, adjust strategies, and ensure continued goal alignment. Come prepared with your own agenda, including questions and topics you want to discuss. These meetings are also an opportunity to ask how you can better support the agency’s efforts, fostering a collaborative partnership. I personally suggest, at a bare minimum, brands that are spending under $10k a month to have a monthly meeting with clients, $10k-$50k spend a month to have bi-weekly meetings, and anything more than that should have weekly meetings. 

This really depends on the trajectory of the business, results, and a few other factors, but the agency you’re working with should not put up a big wall to hide their calendar when clients need support or their direct input on their brand. 

Conclusion

Take a moment to evaluate your current agency relationship. Are they meeting the standards of accountability outlined here? If not, it might be time to discuss how they can better meet your needs. Remember, your marketing agency should be your ally in achieving your business objectives. 

Accountability is not just a buzzword; it’s a critical component of a successful client-agency relationship. By focusing on clear communication, relevant metrics, collaborative goal setting, and regular check-ins, you can ensure your marketing agency is a true partner in your business’s growth. Remember, a transparent and honest relationship with your marketing agency paves the way for mutual success. 

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