Internal Staff vs. a Marketing Agency: Who Delivers Greater ROI?

6 min read
Jun 4, 2024 9:40:58 AM
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Internal Staff vs. a Marketing Agency: Who Delivers Greater ROI?

When today's executives consider marketing as part of their overall budgets, it's clear that marketing carries more value than in years past. According to HubSpot's The 2024 State of Marketing & Trends Report, 57 percent of marketers are somewhat confident in their marketing investments, while 26 percent are very confident their plans will maximize ROI for their business.

So, if we know that maximizing ROI is the North Star, what is the best way to get there? Where should that marketing budget be invested?

One of the most common challenges in developing a marketing strategy is the lack of expertise and resources. Many businesses may not have a dedicated marketing team or the necessary skills to create a comprehensive strategy. This can result in a disjointed and ineffective approach to marketing and sales that either wastes money or leaves potential profits on the table.

There are three paths forward to remedy these challenges. The first is to hire and develop internal resources. The alternative is to hire a growth agency that can help with marketing, sales, service, and brand identity. In some cases, hiring internal staff is the right choice. In other situations, going with an agency makes more sense. And the third option, hiring a combination of both, is often the winning formula in our experience.

Goals for Working with an Agency

Achieving marketing leadership requires more than just a well-crafted strategy. It requires a deep understanding of market dynamics, consumer behavior, and adapting to changing trends. It also requires a deep understanding of what's important.

Access to Innovation

With the rise of digital and inbound marketing, new platforms and technologies have emerged. It can be difficult for a single individual or a small team to stay current on the latest innovations. 

Growth agencies have their finger on the pulse of the industry and can help businesses navigate the rapidly changing sales and marketing landscapes. They can provide insights into emerging trends, identify new opportunities, and help businesses adapt their strategy accordingly. Much of this depends on identifying the right elements and the best software to maximize efficiency and profitability. A good growth agency should help account for the health of the overall business, not just provide a couple of fun graphics for Facebook.

Know What's Important

With innovation comes the need to report on it. With changing innovations comes the need to change the reporting. Businesses often struggle with measuring the effectiveness of their marketing efforts. Without proper tracking and analytics, it can be challenging to determine which strategies are working and which ones need improvement.

Marketing agencies have access to advanced analytics tools and can provide businesses with valuable data and insights. They can track key performance indicators (KPIs), analyze campaign metrics, and provide actionable recommendations for optimization. By working with a marketing agency, businesses can gain a deeper understanding of their target audience and make data-driven decisions to improve their marketing strategy. These can be difficult tasks for a single individual to achieve if they're also tasked with many other duties.

Gain an Expert

By leveraging the expertise of a growth agency, businesses can stay ahead of the curve and maintain a competitive edge. One of the key advantages of working with marketing agencies is the access to this diverse range of expertise.

Growth agencies employ professionals with specialized skills in various areas of sales and marketing, such as branding, social media, content creation, and SEO on the marketing side and CRM optimization, service-level agreements, and database management on the sales side. By partnering with an agency, businesses can tap into this collective expertise and leverage the agency's knowledge and experience. This allows businesses to develop a comprehensive marketing strategy that covers all aspects of their business and maximizes their chances of success.

Furthermore, marketing and sales agencies can provide valuable insights and recommendations based on their experience working with other clients in the same industry, such as the foodservice industry, for example. The right agency will have a deep understanding of market trends, consumer preferences, and competitor strategies.

Is it better to work with an agency or hire internally?

After you know and understand the goals, it's time to figure out how to achieve them. Do you hire internally, bring in an agency, or consider a hybrid option?

What Are the Requirements?

Let's start with some questions. What do you expect from someone you hire? Do you need that person to have a specific set of skills? Does that person need to be fully immersed in your unique industry? When hiring a single person to support your efforts, you condense all of these requirements into a single seat in the office. That can be both good and bad, and here's why.

The good thing about hiring a single person is they will fulfill the requirement of being available in-house, eight hours a day, five days a week. From Monday through Friday, nine to five, you can expect the marketer to be at their desk, working on assignments to meet your stated goals. This is not the case with an agency. Most agencies communicate remotely, and even though they might be quick to respond, they're not down the hall.

The Choice: Do you need someone in-house, full-time? Or are you comfortable with remote access to your marketing partners at scheduled intervals?

What Are the Capabilities?

The bad thing about hiring a single person is no matter how good they are, that's all you get. With an agency, you can get the expertise of a whole range of people. Maybe one week, you meet with someone dedicated to your company's social media efforts, while the next week, you're talking with an entirely different person about content creation and the use of video. The next day, you might talk with an expert about aligning sales and marketing and closing the loop to determine the ROI of working with that agency.

Let's say the agency you hire has 12 people partially dedicated to your company. Each person will likely have varying skill sets with different ranges of experience. With an agency, it's not inconceivable to work with more than 70 years of combined experience across five different disciplines versus working with one mid-level person with less than 10.

The Choice: Does access to a range of experiences make up for someone not being in the office daily?

What Is the Budget?

At the end of the day, when you compare the monthly retainer an agency will charge versus the salary of a full-time employee, those numbers should be compared in terms of overhead costs and added value. Let's take a look at the national average.

According to Payscale, the median salary for a marketing manager is just over $70,000. These are the people "within a company who supervise and help create the various advertising or merchandising sales campaigns the business uses to sell itself and its products. A marketing manager can be assigned to a single product, a product line, a brand, or the entire company. The manager typically must incorporate a variety of input from creative, research, advertising, and sales teams."

As a point of comparison, digital marketing and growth agencies are often quoted in the same ballpark. Even if the monthly costs are higher with an agency, the ability to deliver can be exponentially valuable because of the range of expertise and the ability to deliver at higher volumes. Plus, you don't have to pay health insurance or give PTO to your agency. Simply put, one person cannot deliver the same skills and output as a team of 10. With an agency, it's possible to secure a resource that will help with sales enablement, lead generation, lead nurturing, content creation, social media marketing, email marketing, and more with expert resources dedicated to those disciplines. These services often go beyond and above what a single, in-house hire can provide. 

The Choice: How does the annual salary of your ideal candidate compare with the annual retainer of your ideal digital marketing and growth agency? If they are equal, which option brings greater value to your company? If the costs are not equal, is spending the extra money on one going to be worth it? How will you know?

The Verdict: TMC's Take on Hiring Internally vs. Hiring an Agency Like Us

hiring in house versus marketing agency graphic - tmc-3

Let's start with a boiled-down version of the truth. If a company has the resources, it's always best to hire an internal person to manage the relationship with the agency. This gives marketers the best of both worlds -- a team of diversified experts working with someone who knows the ins and outs of the business on a day-to-day basis. In our experience, this has certainly resulted in successful relationships, allowing that agency to train a lower-level marketing staffer to be a better marketer.

If that's not an option, though, we believe it's always best to hire a team with a more diversified portfolio of skills, expertise, and experiences. 

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