So we were fired the other day. Well, sort of.
The engagement in question began two years ago. At the time we got involved, business for was tough for Malcolm*, the owner of the a service based company with multiple location in the State of Michigan. He had recently made the difficult decision to release much of his management-level staff, including his friend and right-hand man, Christopher*. Malcolm had also at this time just relocated to a much smaller office space in the interest of conserving precious cash and ultimately staying in business.
*Names have been changed to preserve anonymity.
A major reason things weren’t going well was the fact that his business’s web presence was a mess. He was spending close to $20,000 annually on Google Adwords and wasn’t getting a single lead for what was at the time a significant portion of his advertising budget. His websites were very outdated both in terms of design, accuracy and content, contained bad links, incorrect contact/personnel information, etc.. It was so bad in fact that his contact forms didn’t even work.
Fast forward two years.
In the short period of 24 months we were able to fix his websites by updating the design and consistently adding quality content, which not only increased conversions but also helped with search engine placement for relevant keywords. We researched and subsequently tailored the messaging of the sites to resonate with the target market, and set up the appropriate lead capture functions to make it as easy as possible for site visitors to contact Malcolm’s sales team. We audited his existing Google Adwords campaigns and re-engineered his campaigns to generate targeted leads and ultimately create new customers Malcolm wouldn’t otherwise have obtained.
It was determined that Malcolm needed to secure three new client engagements to offset the yearly costs of our retainers. At our end-of-year meeting in December 2014, Malcolm told us that he’d earned the business of at least 18 new clients from our efforts, and possibly more.
If you’re keeping score at home, that’s a 500% return on investment.
Then a month later, Malcolm terminated our contract. With all of the additional revenues he now had at his disposal, the business decision was made to replace our services with those of an in-house full-time employee.
Malcolm came to the conclusion that for the cost of a single full-time employee, which was probably around two times the expense of our monthly retainer, he could get a lot more labor. If you’re a business owner or manager watching your labor costs, it’s not the most illogical conclusion to come to. While we had big plans for 2015 and it’s disappointing to have this engagement come to an abrupt end, we wish Malcolm and the staff members we’ve enjoyed working with nothing but the best of luck and success going forward.
The question then becomes, did Malcolm make the right choice?
To find the multitude of talents and different skill sets that an agency offers in a single individual is almost impossible. In fact, in our circles we refer to such people as unicorns for good reason. When you engage an agency, the biggest value is the fact that you are gaining access to a team of professionals, each with their own particular specialty. You get multiple team members who’ve been assigned to your campaign because their specific skill set matches your needs. You get exactly what you pay for, and while an agency’s rates are usually higher than that of an in-house employee from an hourly perspective, you get and ultimately only pay for exactly what you need. In comparison:
- Don’t call in sick
- Give you access to a multitude of talented individuals
- Don’t require the typical unemployment/FICA obligations of an employee
- Don’t require benefits
- Aren’t likely to quit and go work for a competitor
- Give you exactly what you pay for and you only pay for what you need
- Are easy to fire if results are unsatisfactory
- Are easy to replace
- Are usually cheaper per hour
- Have to be trained
- Have to be monitored more closely
- Are sometimes more difficult/costly to terminate
- Tend to be costly to recruit
- May quit for better opportunities
- May miss work due to illnesses, pregnancies, family emergencies and other issues
- Are often skilled in only one or two areas
At the end of the day, if you’re a business owner or hiring manager, you have to come to your own conclusions as to whether hiring in-house is a better fit for your organization. If your agency is only performing one or two specific tasks, then it might make more sense to drop them in favor of an employee. However, if you’re considering this move, there are two major things to be aware of:
If your agency has been doing a good job, severing ties and replacing them with an in-house employee carries it’s own set of risks. For one, if it doesn’t work out with the employee, you may need to re-engage the agency to get things back on track – and they might not be available a second time around. And two, you need to be very sure that the individual you’re trusting is as competent as they seem to be. Talk is cheap – and you have to ask yourself, if this person really possessed the multitude of skills that they say they do, wouldn’t they be working for an agency like us?