#9 You Don't Need Another Agency!
Before we get into this week’s send, I wanted to give a shout-out to Jack Cooper at RT7 Digital. RT7 are a specialised full-service Amazon marketing agency that uses data-driven techniques to help brands grow in the world's most competitive marketplace. Driving documented results with brands like Eve Sleep, these guys are the real deal. I know, because I’ve spent over 20 years working with the good, the bad and the ugly in the agency space and I recommend sparingly!
I’d also like to tell you about my good friend Stef Boekel at Marketplace Distri, the only person I trust when it comes to the regulatory setup of a European eCommerce expansion.
Agencies suck! That’s what most of us eCommerce veterans come to realise when the newness wears off. They lure you in and promise the Earth, onboard you and sub you off to a junior, you call BS after 3 months, and the churn goes on. It’s suggested that brands are changing marketing agencies every 3-6 months, which truly stinks. The sad fact is that there definitely are ‘a few good men’ out there when it comes to agencies, but finding them requires volunteering yourself as a guinea pig. Trialling is ok, but you never get back that lost time and money, and at a time when growth needs to happen NOW who can afford it? I want to dive into why the agency model is broken, and then offer a couple simple solutions:
It’s a non-legislated industry, which means it’s essentially the Wild West. Everyone wants to be a ‘digital marketing ninja’ (as one moron calls himself on LinkedIn), so it’s become this bloodbath of kids with whispy chin hair wading in to ‘blow up your eCom sales’! First off, can someone please back me up that sporting baseball caps, calling people ‘dude’ and saying ‘yo’ is not the digital marketers uniform? Thanks. The majority of these people have no business telling you how to run your business or your marketing, but don’t be fooled because they’re not all 19 and wearing a baseball cap…so you’ll have to be vigilant! The industry has paved the way for the mass influx of these people, so do your homework and find the gold.
The elephant in the room, pricing. The price is a key motivator in our decision-making, but no matter how many times we’re told that “price is what you pay, value is what you get”…we still often follow cheap wherever it goes.
Those baseball wearing scallywags will indeed quote you £500 a month, and sure, it looks attractive next to the bigger agencies at £5000+. Come on. Here’s what Jack Cooper at RT7 had to say about it;
“Choosing a cheaper service may seem like a cost-effective solution in the short term, but it can leave brands with their fingers burnt when they discover the shortcomings of a subpar marketing strategy. When brands opt for a cheaper service, I see time and time again that this results in a short-term relationship (3-4 months). This process risks damaging their reputation and losing customer trust, which can make it more challenging to engage with a second agency in the future. A good agency understands the importance of investing in a brand’s long-term success and will work collaboratively with their clients to develop a custom strategy that aligns with their goals and delivers meaningful results.”
I couldn’t have said it better. In a nutshell, spurious agencies are screwing it up for genuine one’s which in turn screws it up for brands that might benefit from those!
Look, Tiger Woods has a coach doesn’t he…so it’s fair to say you need one too if you want to get better at golf. Same with eCommerce, you do not have the skills to do it alone… yes I mean you. Tiger’s coach has not won 15 majors, but he has played a ton of golf. Would you trust him if he didn’t know which end to hold his driver? So why do you trust so-called ‘agencies’ and ‘consultants’ (perish the very sickening word) to show you how to succeed online when they haven’t sold a stick? The best agencies, people like RT7, come from owning their own successful brands first and then showing others how to do it afterwards. They dug it out the dirt. Vanquish are the same, our people spent 20+ years building & exiting ecommerce businesses long before we got into the game of assisting others. I personally wouldn’t trust a non-commercially experienced agency as far as I could throw them, but it’s up to you!
Over-promise / Under-deliver
Much as it seems to be everywhere else in the world of service provision, marketing seems to be all about big bold claims backed up by fluffy performance. “10X your revenue in 30 days”, “double your revenue online”, yada yada yada. It’s all meaningless bravado. Nobody can promise this stuff, let alone deliver it overnight. A true strategy to grow a business takes time, patience and money, and both parties should be willing to invest all three. Give me someone who under-promises and over-delivers any day of the week. Let’s build a sensible strategy, attach some KPIs and milestones, and build it together. Sound good? It would to me because it’s real life.
There are a million other lacklustre reasons the system is broken, such as lack of transparency and communication, short-term focus over long-term strategy, misaligned goals and incentives, lack of data-driven approach etc… but we don’t have the scope in this punch little hump-day send.
Avoid Anybody Wearing A Baseball Cap
Ok, I’m joking… sorta. I don’t have anything against baseball caps, I have a couple somewhere next to my flat caps and fedoras I think… But you need to avoid the charlatans that often wear them to meetings and claim to be the ‘eCom OG’. Ask for referrals and testimonials, and crucially ask about commercial experience. Have they got it? Where from? Vet them til’ they sweat.
Position The Deal Risk-Free
We are in a transition era whereby fees and retainers are becoming outdated. They were great when the scope of work was unclear or when the competition was sparse, but today it’s changing. Don’t get me wrong, in agency work, there is nothing wrong with retainers as they are often the only way to profitably employ man-hours to a client without going bust. What I am saying is that if the agency or consultant is confident about their ability to perform for you (which they should be or they shouldn’t be taking you on to fail), they should be willing to look at the bigger picture. (It may surprise you to learn that most agencies do not make money, it’s not a fun model. Deliverable costs are so high that retainers usually barely clear them, regardless of how high they are.)
Here are some alternatives that can produce mutual success;
Retainer > RevShare*: Since the first 3 months are often intense hard work and housekeeping putting right all the inherited wrongs, ask them if they are willing to do 3 months retainer followed by a share of the gross revenue thereafter. A percentage of sales could be very lucrative to them, and scaleable for you. One Off Cost > RevShare*: Similarly to the above, you might want to ask them if they can give you a fixed cost to clean up the mess and/or set everything up, then drop onto a RevShare. Nobody is out of pocket and it’s win/win thereafter.
Equity Stake: Yes I’m going there. If you’re lucky enough to find a rainmaker, don’t be precious about your equity. Consider an equity position for your guy, and he will be a truly integral part of your business. I’ve seen it work countless times. I’m no lawyer, but there are ways you can do this and reserve the option to take it back if it fails mutually. Ask your advisor.
*A couple of notes on RevShare & Equity: Neither is a substitute for necessary fees. You need to eat whilst building equity in your company, so I assume you take a wage (if you don’t btw that’s a hobby so you need to find a job). Your partners and providers need to do the same, so whilst revenue shares and equity are exciting, they aren’t feeding the baby. So don’t be unreasonable when you’re expected to commit some level of fees to cover the costs of delivery please.
Agency Gatekeeper, Not Another Agency
Finally, I think that the ultimate solution is to find a gatekeeper. In the old days that was the Head Of Ecommerce, or the ‘Marketing Director’ (people still have those, right?). Those guys are expensive, and they like to change companies a lot. Agencies should sit within the ecosystem of an ecommerce growth strategy, not at the nucleus. They don’t belong there in most cases unless they have the commercial credentials. If you had an external, yet integrated partner who has been there, done that and still doing that, who could work with you round the clock to ensure you have the right agencies, consultants, advisors, warehouses, providers, relationships etc in place… wouldn’t that be ideal. Someone who stands between you and a panel of carefully vetted providers, all with specific skill sets to suit brand personality and goals, would ensure that you only get the best to remove the chance and expedite the process. Such companies exist, I know because I own one. I’m adding value here, not selling, but if I were I’d say that we do this very thing as part of our GTM Gameplan™ and EcomAlliance™programs. No one company can do all things digital under one roof, it isn’t possible. But they can certainly bring together a bespoke A-Team for you.
Whichever way you go, I wish you luck on this tremendously exciting journey. It’s not all doom and gloom, don’t believe the media. Keep doing your thing, because growth is indiscriminate to the economy, climate and brand… it’s just strategy.
That’s it for this week. I hope you enjoyed it and that it restored your faith in agencies somewhat and gave you the inspiration to find a blinding good one!
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