“Should I hire a marketing agency or build a growth team?”
If you’re a founder, CEO, or marketing executive, you’ve probably asked yourself this question several times. Growth agencies often get a bad rap due to a general lack of transparency in the industry. Meanwhile, putting together a growth team is a difficult, arduous, hiring-intensive process.
So how do you answer this question? After all, growth doesn’t wait for you to make slow decisions. You need marketing to impact your bottom line, but you need to figure out how to go about it.
You can (and should) stand on the shoulders of giants and take advice where you can get it on how to grow a business. But sometimes you need to focus elsewhere, and marketing can’t be your primary priority in-house. So the agency vs. growth team question gets even more muddied.
Luckily, there’s a set of questions you can ask yourself to determine whether you need a growth agency or whether you should start building your growth team.
These are those questions:
- Are you struggling to hire the right people?
- Do you know much about marketing yourself?
- Can you afford a senior person + staff?
- Is marketing the biggest risk in your model?
- Have you found a channel that works yet?
- Does your marketing require a wide range of skills?
Below we’ll go through each question and how your answers can lead you down either the path of hiring an agency or building your growth team.
Let’s get started, first with…
Question #1: Hiring the Right People
If you’re a founder, you’re probably thinking about who your first marketing hire should be. Someone senior who’s worked on building startups from the ground up in the past and has both the strategic and execution chops you need. Chances are, you won’t be able to hire more than one or two people in this case, so you need someone who’s eager to both drive strategy and get in the weeds to create and execute campaigns.
As a marketing executive, you’re thinking more about going all-in on strategy and staffing up talented people who can execute that strategy. You’ve done all you can by yourself, and now you need to delegate tasks so you can get more creative about strategy.
But actually finding and hiring the right people for these roles is the major obstacle you’re facing. Usually, for these situations, it’s best to go with someone you trust or know can perform. Going for junior level marketers leaves you without the expertise and years of prior marketing performance that can help your new hire understand your business and start running campaigns immediately.
If your answer is that you can’t find the right people, then the question becomes whether agencies are any different.
Hiring is still hard, right?
Yeah, except agencies are built on their ability to hire the right people — talented marketers who can understand different businesses and industries, identify the right strategies, and create campaigns that drive ROI based on the needs of their clients.
An agency that can’t hire those kinds of marketers fails, so if an agency has been around, has measurable success, and has a good vision for your growth, then they’ve most likely gotten the hiring part of the equation right. They’ve created a repeatable, scalable hiring system that lets them service multiple clients across industries and verticals.
So if your answer here is that you’re not able to hire the right people, an agency is a strong alternative. Especially because a hiring mistake can cost tens of thousands of dollars, while an agency contract might have a trial period that lets you back out at any time before a ramp-up.
But if you have someone you know can perform in mind, get them on your team immediately. Either way, don’t waste time kickstarting your hiring or agency review process.
Question #2: Marketing Knowledge
If you know how to do marketing yourself and you don’t need manpower — i.e. it’s the early stages of your marketing and all you need to do is set up analytics, event tracking, AdWords, Facebook Ads, etc… — then you can and should be doing your marketing yourself. At least to start off.
But if you have no clue how to do marketing, then you should absolutely hire someone or hire an agency, right?
Sure. Except there’s a huge caveat, and it’s one that guides how we do hiring at Ladder. We don’t hire for the things we’re bad at unless we make a conscious effort to learn the basics. UX/UI? We’re not experts, but we know the most important tenets of good design. Development? We’re not coders, but we know basic HTML/CSS and understand how websites and apps are built.
But if we don’t have the basics down, we don’t hire individuals for things we’re not yet familiar with, and we don’t hire agencies for things that we have no idea how to judge.
Think of it this way:
If you know nothing about marketing, you know nothing about how to measure the value, worth, and prior accomplishments of a marketer you want to hire. Along the same vein, you also know nothing about how to judge and hire an agency.
So if you have the marketing knowledge and don’t yet need the manpower, do it yourself. If you have the knowledge but need to ramp up, go back to question #1 and start thinking about the hiring process, whether it’s for an individual marketer or an agency.
But if you don’t have ANY marketing knowledge whatsoever, diving into making a hire without either getting an adviser who has marketing knowledge to suggest an agency or marketer, OR without sitting down and teaching yourself some marketing, will only result in poor hires, misaligned incentives, and damage to your bottom line.
Question #3: Affording Seniority
Let’s face it — if you’re a founding team with very few other hires, you’ll need to hire a senior marketer. This is especially true if you don’t have any marketing background in your founding team.
That’ll cost you a pretty penny.
But let’s say for the sake of example that you can find a Director of Marketing for $100,000 a year without having to give away any equity. That base salary immediately costs you over $8,300 a month. And that doesn’t account for cost of healthcare and other benefits, which could run you another $500-$1,000 at a minimum. And with that, you’re already paying almost $10,000 a month for a senior marketer.
Oh, but that’s not where it ends…
Let’s not forget that you’re not factoring in ad spend, cost of SaaS tools, and other costs into your marketer’s salary. And if you’re not budgeting at least $3,500 a month media spend, you shouldn’t be hiring a senior marketer OR an agency in the first place, because you’re not playing with enough money to have marketing make a real difference.
So your MINIMUM cost of doing business with a senior marketer is $13,500 a month. And that’s the ideal situation. Usually, you’ll want to attract a highly talented marketing director and you’ll be driven to pay more to poach them or convince them to come on board.
Usually, you’ll want to attract a highly talented marketing director and you’ll be driven to pay more to poach them or convince them to come on board.
If you can afford that, power to you.
If you have the right combination of the right person, the appropriate marketing budget, and the right salary, then you should make that hire, as it can be transformative for your business.
But if you can’t budget that much, an agency can be ideal. Mind that you should still spend at least $3,500 on a media budget, but you’ll be a lot more flexible about choosing between agencies bidding for your business, enabling you to drive costs down to or below $10,000 a month.
Question #4: Marketing Risk
Every startup has growth risks.
If your biggest risk in your business model is marketing, you HAVE to get it right.
That means you need to spend the money now to get your growth marketing team set up and have them build a repeatable, scalable growth machine.
But if it isn’t and you need to focus on business development, partnerships, sales, or product, then you can afford to and probably should outsource it. Giving your marketing over to the hands of an agency frees up time and focus for you to dedicate to your most important business objectives.
Obviously, with an agency, you’ll still want to set goals, review performance, and make sure that you’re getting the proper return on your investment. But not having to focus on hiring marketers, making the hard strategic decisions, and executing tests frees up a ton of time for you to get your product, sales, etc… on track.
Question #5: Channel Discovery
Part of the problem for startups when they attempt in-house marketing is figuring out which channels to tackle. If you haven’t yet, then using agency experts who know how to move the dial with test-driven methodology can be the fastest way to find out exactly which channels work best for your business.
Face it — if you don’t know which channels to target, chances are, you’ll overinvest in areas where you think you’re seeing performance.
Agencies that are given the task of channel discovery will instead spend small amounts of money to run tests and figure out where to double down and invest, using tactics like A/B testing to optimize your marketing approach for conversion.
Question #6: Marketing Skills
Full-stack marketers are still rare these days.
And if your marketing needs require you to go beyond just advertising, email marketing, CRM marketing, or any single channel, then you’ll likely need to hire someone who is good at one of those and hope they can learn quickly, OR you’ll need to hire multiple marketers to cover all the bases.
That can add up to big-time overhead on salary and benefits, not to mention the time required to staff up a team and onboard them properly.
But the one place where you’ll tend to find a plethora full-stack marketers or full-stack growth teams is at agencies. They’ve already built the hiring model to bring on people who can handle all channels or created teams that work well on a multi-channel marketing approach.
So if your marketing is complex enough that you need to work across multiple channels and you can’t afford to build out a growth team, an agency can be a quick, cost-effective way to get around those requirements and immediately drive performance.
As you’re evaluating whether to build your own in-house growth team or hire an agency to do the work for you, keep the above questions in mind. Answering the question is never a simple yes or no statement. Instead, it takes a full analysis of your budget, hiring capacity, business objectives, and growth goals to figure out which of the two is best for your current situation.
As your company and product offering evolves, your needs will change and you might need to switch from an agency to an in-house growth team, or to augment your growth team with specialized agency help. In either case, the questions listed above can help you make that decision quickly so you can get back to what matters most – growing your business.