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Brian Graf: Welcome to Episode 79 of B2B SaaS Marketing Snacks. In this one, Stijn and I cover a topic you might not expect. Why you shouldn't hire a marketing agency. It's not a surprise that both Stijn and I feel strongly that there are plenty of scenarios where adding the right agency can create enormous growth for your company.
But there are also plenty of instances where hiring a typical agency won't solve your marketing problem, but will instead exacerbate it and will only delay you being able to find a meaningful solution. We'll cover what to look for within your company to tell you if you're ready for an agency, as well as what to look for in the agency to find the best one that fits your needs.
Hopefully this can help you quickly find the best long term marketing solution for your company and support your growth goals for years to come. Enjoy! It's time. Welcome back. And thank you again for joining. As always, it's just the two of us today, but I wanted to bring up a topic that, you know, I think I think a lot about, and I think a lot of companies kind of breeze through it, but maybe not thinking too deeply about.
And I thought it might be helpful. And it's kind of antithetical to what we might typically talk about. It's really why you as a B2B SaaS company should not hire a marketing agency, you know, the typical marketing agency gets kind of a bad rap from early stage companies, right? Particularly in that they promise things that they can't hit. They kind of use vague flowery language. They're all ideas and no execution There's a lot of kinds of things that sometimes are warranted, right?
But there's also a kind of aside from the agency perspective that this bad rap is there, but the client maybe has some stake in it as well, right? As an agency, you typically can't control full strategy. You don't have access to all the tools that you need, right? You're too scoped and don't have the flexibility that you'd need to drive all the demand that's required. It can go both ways, but you know, I think that there are scenarios where it is a really good idea to bring on an agency and they can add a ton of value. And there are scenarios where it's just not, and you can spend your time and energy and capital more efficiently in other places.
And I know that you have a ton of experience on both sides of this coin. And so I thought it'd be a good, good discussion. I wanted to maybe just start on a positive note. When would you say that agencies are a great idea? From a company's perspective, what situation lends itself really well to just plugging in a performance marketing agency?
Stijn Hendrikse: One of the reasons we started Kalungi is that when you're early in your go to market journey, there's so many things you're doing for the first time. And those things can be very costly, right? If you get them wrong one or two or three times in a row, building a website on the wrong platform, starting marketing campaigns without having anything meaningful to say, or not knowing what your ICP is, or figuring out kind of that certain channels were not the right channels where someone could have just told you that.
And you didn't spend six months of ad budget on it. So there's so many reasons why you should hire people who've done it before. And an agency is a great way to do so, right? Especially if you have an agency that is very focused on your ICP, right? In the B2B SaaS companies that are in the post MVP stage.
But if you are a spa, a medical spa, then there's probably a marketing agency that does only medical spas, right? Which would be a great fit.
Brian Graf: To that point, right, I actually just today talked with a company that is at an early stage. They just launched their product and have one paying customer.
And on the one hand, they have their CEO saying, Hey, if you get us in front of any prospect, we will close because our product is that good. And then you have the salesperson on the other side of the coin saying that I can't get meetings, right? Nobody wants to book a meeting with me.
I can't figure out why. And ironically they were, they were reaching out to Kalungi marketing agency for help. And obviously Kalungi, we bring a lot of strategic work to our clients. And so I do think that budget aside, it was a good idea to reach out to us, but the typical agency just wouldn't be able to help to your point, building out the right strategy, right.
And answering not only what it's for, but who's it for are so critical in those early days. And they're just things that maybe you cannot answer with a typical agency. I do think that, maybe it's something I'd love your opinion on, but it could be that just the company, a more mature company can.
Have a much easier time extracting really solid value from an agency, right? They already have, theoretically, already have their marketing channels built out. They already know that Google ads work. They know that the SEO has worked and just needs at this point, you're basically just continuing along a path and blocking and tackling against an existing strategy.
In that sense, right, I do see a more typical agency working really well, but I'm sure that there are some intricacies in there that might make it different. What do you see from your side?
Stijn Hendrikse: Yeah, I think the larger and the more mature a company gets, the more an agency has to compete with other people who know what to do, but they just might not be as efficient at doing it, right?
Or they don't, they don't need this capability all the time. So the agency has to provide better ROI because they have economies of scale, or they have very specific specialist expertise that their client needs once in a while. And I think that's where you also get a much more often frustrating experience, because in the end what you're then really doing, you're hiring people outside of your company, not necessarily an agency.
And the experience you have with the individuals that happen to end up working on your account will be a big part of the value break and extract, right? And what will agencies do? Just like most professional service organizations, right? They'll give you really good people early on, and then over time, and that usually means they're not very profitable.
And then over time, they'll try to get more profitable, maybe getting you more junior people to help service you, right? Sometimes that's part of the strategy, sometimes that happens more unconsciously. I think with early stage companies, Kalungi has that challenge a little less because there's much more clients who just have never done something themselves, or they have no clue where to start.
Right? So then you're not just buying the people and the capacity that have to basically be better and, and more efficient and less costly than what you would do in house, but you're also buying a playbook. You're buying a methodology, you're buying a strategy, you're buying a whole bunch of things that are not necessarily just a function of who you get, but also what you get?
So I think there, it's a little different whether you are. Asking this question, like, why should I not hire a marketing agency for a more mature company versus immature? The other thing that I usually recommend is to not outsource something that you don't really understand. That's absolutely true for these larger companies, right?
Because they usually have an ability in house to to learn how to do some of these things themselves before they decide Hey, it's good to outsource this and this is kind of what a good outsourcing deal would look like, right? It would either yield more outcomes or it would be a little more cost efficient, etc.
If I kind of live by that rule, it's really hard for a small startup to apply that, right? Okay, I'm going to hire Kalungi, I'm going to outsource my marketing, but then according to Stein's rule, I shouldn't do that unless I understand that, you know, that's tricky, right? So, there I think it's much more of a journey that you go on with the CEO or the founder of these companies where you have to really behave as if they would hire a full time team member or a full time team.
And, and not only. You know, make sure that the economics work out like that, but also the way you show up, the way you treat the work, right? That's why Kalungi is less about scope management, right? Which a normal agency has to do, right? They have to be very clear. This was in the contract. This is not.
Kalungi doesn't really do that because you want the customer to really feel that we're like your in-house team, right? If we find out that something is not working, we need to do something else. And we didn't know that before. We're not going to say, Oh, that was out of scope. Now you have to pay more because your in-house team wouldn't do that.
So, I think that's where the question you're asking today in today's podcast is a little different for big versus small companies, early versus late stage.
Brian Graf: You bring up a good point for, especially for the early stage. I think you were the one who made this analogy way back when I'll give you credit for it.
It was the reason that you pay an experienced sea captain more, right. It's because they know what waters to avoid, right? And what geographies to avoid where I'm more inexperienced. The captain would just sail you straight into them. I think it's the same idea with, particularly with a startup, right? Where you just can't, you can't know everything right at that stage.
You don't have enough experience. You don't have enough bandwidth and you need a guide to really take you through it. And you need basically on the agency side, right? If you were to go with an agency or even a marketing team, you need that strategy to be really strong so that you don't. Pay the price with wasting time or capital, right?
Or, or just missing the mark in terms of your positioning and messaging and your go to market, right? And so it is really so important to have that guide in the process, particularly when you're, when you are small. And a lot of typical agencies just don't have that for you, right? They don't have that, that capability.
Stijn Hendrikse: Yeah, there's this story. I think that's maybe what you're referring to. Maybe it should cost you. 1 for someone who's turning screws for you, like 1 per screw. But then it should cost you 10, 000 for someone who knows which screw to turn, right? To make sure the machine works or stops working or whatever the outcome is that you're trying to achieve.
Brian Graf: I guess so when you, when you shouldn't use an agency, right? Like from my perspective, it was basically like, if you don't know marketing at all, right? It can be really dangerous to bring an agency in and just blindly trust them saying that. Honestly, as an agency, it also can be really a tough spot to be.
If you have just, you haven't entered the market yet from my perspective, right? Like you're trying to, you're just trying to basically use marketing as an easy button almost at that point. And you haven't tested your, you haven't built or tested the marketing strategy, or even if you're trying to, from my perspective, if you.
If you're trying to build out demand generation channels that you haven't tested, I think having a typical agency could be a really tough thing unless you absolutely know that they're going to work. I don't think that an agency model would be flexible enough to be able to deliver really good results for you.
Is there anything else that comes to your mind that just scenarios where it's just like, this is not a good idea.
Stijn Hendrikse: Yeah. I think there's two things that are really valuable when you find an outsource partner. One is they can take real ownership for outcomes and it is less relevant actually whether they have certain expertise in house or not, right?
Because if they don't, they should be training people up on that or go hire someone, right? And, and the other one is where they are really good at something, right? That you can never be as good as them. I write a lot about this and go to market modeling. I'm like, why do you partner with someone, right?
You partner with someone either because they allow you to access a market that you can't access yourself. Or maybe they compliment the IP that you have, right? So you want to bring a certain solution to customers, and you only can do part of that, so you need another part. But the most important, the most common reason to partner is because someone does something cheaper, faster, better than you, right?
Selling, marketing, servicing, etc. And the same goes here to the agency. So the second type of agency that could be a really good fit is very specialized, like a RevOps agency or an agency that just does ABM just does Google search better than anybody else. And, but I think you would, you go for either of those two.
And Kalungi falls in the first category, right? Where you basically take accountability for results. And you basically say, we do anything you need from a marketing perspective. I mean, it could be a podcast, could be, you know, reinventing your logo, could be just getting your hotspot to work correctly. But all of those things fall under, we take accountability for the outcomes that will be driven by the combination of all of this.
And there's what you've done with scope creep problems and things like that. Or you basically hire the people who don't do anything but something that you feel you need help with. But I think you kind of need to optimize for one of those two. And I think too often an outsource or an agency relationship is based on a combo of those things.
And then it gets a little harder to, to really both hold each other accountable, to manage expectations and things like that.
Brian Graf: I like that. You either pay for results or you pay for expertise, basically. Proven expertise. Yeah, easy to measure, easy to validate, verify, right? Are they able to fix this thing 10 times faster than I could? Did I try it myself the last couple of months, right?
Ten times better, yeah. I like that. And then to the point of the actually willing to sign up for the results, I feel like it's, it's almost like, you know, it's never guaranteed that an agency will hit the, the targets that they set, but if an agency isn't willing to sign up for real targets, they're definitely not going to hit anything meaningful, right?
And so that even just from the starting point, right, like there's a, there is a misalignment of incentives, I guess.
So maybe let's switch over to the other side of the coin. So from a B2B SaaS perspective on agencies, what have you seen as the biggest themes that cause companies to fail with an agency? You know, even assuming that they have the aid, they have the best agency in play, right? Like how have you seen a company, shoot themselves in the foot and not extract the most value from an agency?
Stijn Hendrikse: Yeah. What I've seen happen is basically trying to do the same thing over and over again. Back to another result, right? You see this a lot with digital marketing, like SEO and SEM. When you're, as a company, you're growing into a more mature market, things like SEO, SEM get harder. They get more, and even IBM and sponsorships and events, all those things get more expensive as the market matures.
Because in the market category, we talk about this a lot in other episodes. Competition gets stronger and it's kind of a race to the bottom sometimes. And the margins will diminish over time. It will also be challenging for agencies to then get more out of the challenge channels that maybe gave you more in the past and then just swapping out one agency for another.
Maybe you do it one time because you think there's something that maybe a new agency can bring in a creative approach or whatever. But if it's all these kinds of known marketing tactics, the reality is that you're not going to succeed by just switching vendors. So I've seen that go wrong many times. The other thing that I can see go wrong all the time is trying to do tactical stuff before you do the strategy, right?
Especially now with the use of AI. So AI is allowing us to do things that the agency used to do, sometimes ourselves, right? The writing, the structuring, the researching, all these things that you need human labor for that are relatively easy to improve or to do with AI. They now become reasons for the tactical execution to become even easier and just increases the risk that you don't actually do the strategic work, right?
Hey, who are we really? What's the part of the market that we really want to focus on? Who's it for? What's it for questions that you mentioned earlier? So I think that's the other reason why a lot of agencies get in trouble because they work with a client who's not willing to spend time on the strategic questions and cannot add to your point.
The prospect that you talked with who had one client and already had kind of decided that their product was the best, you know, solution since sliced bread. And that if you just found an agency that would sign up for him, basically saying, if you just get a hundred people in the door, we'll, we'll have a hundred new clients.
Of course, that's not going to work. There's a reason we want companies to get to product market fit first, et cetera. So, that kind of journey, right, the product market fit journey, and at what time are you able to scale things through, for example, external help like an agency is really the reason why it sometimes fails because companies don't have the product market fit that they think they have.
They're starting to pour gasoline on the wrong fire. Where they're not able to get an, they get an agency, they get going, get started and they're not able to brief them correctly or to give them the right answers to some very valid questions they will ask early on. So that's another great reason for things to go off the rails.
Brian Graf: And even to your point on the larger companies, right, that they've already established, they already have product market fit. They can almost treat marketing agencies like a commoditized resource and tend to churn through a lot of those agencies. The problem with that is, you know, every time that you churn through one, you lose however many three months ish of progress, right, with having to fire, hire, and retrain.
And that start stop motion can be really detrimental to the progress that you can make from a marketing perspective. But back to the point that you made on AI, right, AI is almost like the, for a lot of agencies, kind of the agency killer in a lot of ways because of, you know, if those agencies are really the commoditized resource, right, AI kind of white takes the knees out from a cost perspective of a lot of the, the lower end work that they would do.
And really, I mean, it seems like it would. We'll create a landscape where only the most strategic and most effective survive. Where the ones that just kind of played in the lower to middle tiers just don't have, there's no edge for them anymore. There's nothing for them to stand on. So you might have answered this with one of your previous topics, but I want to make sure, you know, I have run into an argument a lot.
Because you're an agency, you won't be able to understand my industry like I do, right? Won't be able to understand my company like I do. And so your, your approaches and your knowledge is just a little bit too generic to really add the value that I need it to. Have you seen that to be the case with agencies?
Is there anything that B2B SaaS companies should look for to show them that that is or is not the case when they're hiring an agency, right? Because if it was the case all the time, right that is it wouldn't add any value But I feel like there are ways and you know, we like to think that we have ways of getting around it But especially as from your perspective inside of companies right hiring on agencies.
What have you seen?
Stijn Hendrikse: Personally, I think there's a lot of people that get hired as an employee that aren't really onboarded as fast as you would like them to and don't get to know the business that well. The same can happen with an agency. I don't know if I could really pinpoint whether it's an agency or a full time hire, whether the actual ability for them to grasp your business quickly and to start getting to know the clients is really that different.
You should, of course, expect an agency to interview your clients, to really do a good job kind of internalizing your value proposition. Usually we would do like a workshop early on, right, to get that really, get the whole team really aligned on that.
And honestly, I don't think that is done much better or faster when you hire in house. Long term, of course, when you have an in-house team and they get to know your business really well, and I'm talking multiple years. Right. That institutional knowledge is very hard to get for an agency. Mm hmm.
Right, but the reality is that most marketing team members also are not, usually not that long tenured in their roles, right? Yeah. If you have a product marketing manager who's been in the role for two, three, four years, there's no way an agency can build the same, have the same kind of knowledge and expertise that this person would have.
Right. The reality is that there are not a lot of people that are in their role so long.
Brian Graf: Yeah, that stayed that long. That's a good point. So when you're looking, when you're evaluating agencies for your clients or the companies that you work for, are there any other factors that you look for in agencies to show you that they're the right ones? Is it personality fit?
Is it a track record, right? Is there anything that people can look at to give them some credibility and assurance that they're making the right decision?
Stijn Hendrikse: The more you can make us feel like you're hiring a team for a long term which is not that different from hiring full time people. I think the better and try to build that type of rapport and trust.
Of course, things like OKRs and specific KPIs and driving accountability through, you know, commitments for results in the contract are really helpful, just like they're helpful even in a team that is in house. You have to at some point be able to trust each other because a lot of these metrics are not gonna, they're the kind of proxies for real meaningful work together and moving the strategic areas.
So spend enough time to really make sure you hire the right agency, the right fit, because you want to have a long term relationship. Cause you do want that to build up institutional knowledge, right? And if you have to swap agencies every three, four months, that's going to be very costly.
Brian Graf: So treat it like you're hiring kind of a key internal employee or a strategic internal employee. I like that a lot. And then you mentioned AI earlier. Where do you think from a company's perspective that they should expect agencies, like what changes do you think they should expect from agencies with AI, right?
Like, it seems like. Increased speed, right, should absolutely be a part of it. And, you know, the ability to iterate faster seems like no brainers to me. But AI isn't, you know, a magic bullet. I think that there's still things that the client will have to bring to agencies to make them successful. And still things that any agency plugs plus AI will not be necessarily everything that a company needs. Where do you see the limitations, I guess?
Stijn Hendrikse: Yeah, I'm pretty black and white on this. I think AI is so much better in doing writing in a kind of more the grammar, the spelling, the structuring even. Not making it sound human, right? You still need people to actually make, do the final touch, but just the writing in volume and to get the right research, to get the right details behind the topic and deduplicating content, structuring and summarizing things, right?
Analyzing information, right? Doing market research. That if an agency is not using AI for those things, you're basically You should move on, right? That is not an agency you want to work with. Yeah. Because you want that energy to go into the more creative side of things, right? To do the things that the AI cannot do.
Ask it the right questions, prompt it correctly, right? Right. So that would be my, my simple take on that.
Brian Graf: Yeah, I think I agree. I mean, I think that every agency should be using AI, whether or not they are. But the ones that will rise to the top and I think have the most value for you as a client will be the ones that know exactly what answer, what questions to ask, right?
And what the bar is for the answer. And if they can do that, particularly across content, right? Those are the ones that you want to work with and those that will help your company the most. Okay, well, thank you so much as always. I love the conversation, and I'll see you next time.
Stijn Hendrikse: Thank you, sir. It was great catching up, and yeah, great topic. Thank you, Brian.
Brian Graf: Thank you to Adriano Valerio for producing this episode, and the Kalungi team for helping us make this whole thing work. And of course, you chose to spend your time with us. As a reminder, all the links we mentioned in this episode can be found in the show notes, and if you want to submit or vote on a question you'd like us to answer, you can do that at Kalungi.com/podcast.
Every time we record, we take one of the top three topics and jam on it.
Thanks again.
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