If you run your business by yourself or even if you have grown to a point that you have a small team running it, most likely you have looked at hiring a company to help you with various tasks such as marketing or design. This experience can be either the best decision you ever made or a horror story that makes you leery of ever outsourcing again. It can be quite a daunting task to find the right group that will not cause massive headaches and problems for your company.
Drew Sanocki joins me to talk about how to pick a service agency to help you run and expand your business. We have both had the good, the bad and the downright ugly experiences in the past and have learned some hard lessons. We share our methods of finding, evaluate and hiring an agency that will become one of the greatest investments you have ever made in your eCommerce business.
(With your hosts Andrew Youderian of eCommerceFuel.com and Drew Sanocki, of DrewSanocki.com.)
Andrew Youderian: Thank you so much for joining me today on the show. Today, I want to talk about how do you pick a services agency, if you’re outsourcing and you’re looking for maybe a larger organization to do PPC, to do web design, SEO, those kind of things. How do find and evaluate agencies that actually are going to be great investments, going to be good to work with, and aren’t going to cause massive problems for your business, because they definitely can? Joining me today, I’ve recruited a man from the dark side, an agency man himself, one of the men behind Mineral.io and a former store owner, of course, Mr. Drew Sanocki. How are you doing, man?
Drew Sanocki: Good. Former store owner and now store participant.
Andrew: Store participant. Yeah. We were talking before we got on that you’re doing a bunch of really cool stuff that maybe hopefully we can chat about either on another episode or maybe ECF Live or something. Pretty cool stuff you’re working on.
Drew: Yeah. I’m getting more into an operational role or back into an operational role and the agency work is still there, but it’s being run mostly by my brother now.
Andrew: But still you’ve got some experience there and you’re ready to pretty much drop all of the dirty secrets of the agency world.
Drew: Yes. Well, I bring that up because I think it allows me to talk a little bit more openly about it.
Andrew: I’m kind of casting this agency as this as Darth Vader, which there’s tons of great agencies and I’ve worked with them, so I don’t mean to do that. We’re tongue-in-cheek but you got to be careful. Personally, Drew, I’ve had bad experiences with agencies. I’ll link up to an article I wrote where an SEO agency pretty much tanked my SEO traffic 80% on my old TrollingMotor.net site. A lot of it was my fault for not managing it well or overseeing it well. Have you ever had any just terrible experiences with agencies you’ve hired for your own business?
Drew: Yeah. I don’t know if they tanked anything but we hired an all-in-one marketing agency for something like 10K a month, which was the biggest expense for our business back in the early days. They just didn’t do a good job across the board. In particular, I think they were promising a lot on the affiliate side and just did not do a good job. So, that was a waste of money.
Andrew: You got to be careful a lot of times. It’s just like flushing money down the toilet. So hopefully, we got seven tips on how to make sure that your money is going to be well spent and you’re going with good partners. Let’s go ahead and get into those right now.The number one thing is look for an agency that specializes. A lot of times, or at least some of the time, you’ll come across agencies that claim to offer a full suite of services. They do PPC. They do graphic design. They do SEO. They do importing and out-porting. They can plan your wedding. You know? Maybe a little exaggerated. They do everything. Drew, I don’t know, maybe there’s a handful out there that are big enough and well-run enough that they can handle all those facets really well. But, my experience, the broader the scope, the less quality and the poorer the experience is going to be overall for those individual niches.
Drew: I agree and this was the disaster story I brought up at the open. We hired an all-in-one agency and they kind of did nothing well. And I think, now that I’ve run an agency, you think like “Okay, an agency probably should specialize, because that’s how they make their money.” They make their money by having a process, by having something that they can scale because, at the price point we’re talking about here and most of the listeners are, I imagine, there is not a lot of enterprise, just really big businesses listening to the podcast. If you’re spending something like 5K a month or up to 5K a month on an agency, there’s not a lot of wiggle room there for the agency. So they’ve got to specialize in one thing, do it really well, have a process for that. That’s how they get good. That’s an argument for why you’d want to choose a specialized agency.
Andrew: For example, with the Right Channel Radio redesign, we’ll link up over to that, of course. I think a lot people are familiar with it, with Carson from Shopify Custom. He doesn’t just do e-commerce redesigns. He does Shopify e-commerce redesigns. They’ve got a new redesign for e-Commerce Fuel in the works. I haven’t talked about that but I’m excited to release that soon. Didn’t go just to a developer, a designer, I went to somebody who specifically focuses only in WordPress design and development. And it makes all the difference in the world.
Drew: There’s this whole movement in consulting now towards productized consulting. So, consultants who are good at say, SEO, like they try to productize their knowledge around SEO for Shopify or something like that. I think it’s a good thing because they price more like a SaaS app. So you’re not hiring an hourly consultant. You’re hiring for a flat fee. You get a deliverable every month and I think the e-commerce companies benefit from that.
Andrew: Number two, make sure you love their portfolio. This is more on the design side. Not everything is going to be design related, but if you’re having a redesign done this is particularly important. I think, sometimes, people make the mistake of looking at a portfolio and saying, “Oh, this really pretty. They obviously do good work. It’s not exactly quite what I would do but they have the capacity to do it. Maybe I’ll just get them to bend their style for me.” I’ve talked with multiple designers who have said that is a bad way to go. It’s what you see is what you get. And it’s so much easier to find someone whose portfolio really is in-line with what your end result wants to be versus trying to get them to learn, because a few things are hard as trying to describe the feeling you want a designer to reach and actually have them hit it.
Drew: Right. And, in the portfolio, you’re seeing their best work, their best overall work that they want to present to you. It’s not their average work, right? I have had this experience mostly with O-Deskers. You see their portfolio. It looks kind of interesting. You think it shows some sort of level of expertise and it’d be easy to get this guy to do something else and it’s never the case.
Andrew: Number three, read into the small details. Drew, we kind of talked about, in a past episode we’ll link up to, trusting your gut and judging people based on little things, the little ways that they interact with you or treat you or treat other people. I think this is crucial with agencies, particularly in that early phase when you’re reaching out, courting them a little bit, before you’ve signed a contract with them. Really read into everything. If they don’t get back to you in a timely manner in the sales phase, if their quote sheet is a mess, it looks like Google Docs just had indigestion all over your website, these things matter. And this is going to be, like you said with the portfolio, how they act in the sales phase is going to be the best they’re going to be acting because they’re trying to win the contract. It only stays the same or goes downhill from there.
Drew: Yep, yep. If you expect anything better down the road, you’re going to be disappointed.
Andrew: Number four, ask about their team. This is particularly important virtually because so much of the time, in our business, you’re not going to be walking into an office and seeing them. You’re going to be chatting with them on the phone, over e-mail, these kind of things and sometimes a team that looks really big and is local, domestic, let’s say in the United States, actually could be one or two people with a huge outsourced army of people who do their work. And vice versa. One of the companies I had do a recent project, I originally assumed it was a one-man shop who was using a bunch of contractors but came to find out that he has a huge in-house team.Ask who’s going to be doing the project management. Is it the same guy that you’re talking to in the sales process? Is he going to run that PM process? With their portfolio, ask about their designers. Is the guy who’s going to be doing your design the same one who did the portfolio design? Really important. Make sure you ask about the team to get a sense of who that is because there could be some surprises there.
Drew: And then I would say how communication is going to work. Not only who’s the portfolio manager or who’s the project manager but how are you going to interact with this person? Can you e-mail them anytime? How often are they available? Things like that.
Andrew: Number five, be realistic about your budget. Agencies, just by the nature of the beast, they’re going to be more expensive. They have an expertise. They probably have more infrastructure and team members. You got to be realistic about your budget. If you come in with unrealistic expectations, you’re going to waste your time. You’re going to waste their time. And/or you’re just going to get a really crappy product at the end of it.Drew, maybe we can talk some real world budget. So, for me, I think people, again, if you follow the Right Channel Radio’s design, that was probably a little bit larger on the size for redesign but that thing cost, it was like a 30K project. And again, Carson and his team did a killer job, but that’s a good chunk of change. For other projects, like E-Commerce Fuel redesign, that’s going to be right around 6K, a little bit smaller and mostly cosmetic, not a whole lot of custom programming. But still 6K for a 30 day project and some graphic design on top of it. Drew, I’d love to get your sense on it. What are some thoughts or some realistic, real-world budgets for managing paid campaigns and e-mail marketing.
Drew: Yeah. This is great. I think for paid campaigns you want to be at the level where you’re spending a significant amount to make it worthwhile. I would say somewhere north of $5,000 a month. I think what we find is most paid agencies will charge 10 to 15% of your ad-spend for their fee. So, if you want to dip your toe in the water of PPC and only spend $500 a month, no agency is going to take you for $50 a month. A lot of the agencies will have a minimum fee of at least $500. And so that’s kind of a significant hurdle if you want the ads to pay for themselves. You want a positive ROI in your spend. You better be adding that agency’s $500 in there, their minimum fee every month. Just because of those economics, it’s rare that you can find a good agency or contractor to do something at the entry level.What I would do then, in that case, if you are just starting out, is find an agency or contractor who has a package where they set you up, where they get you up and running, where they build out your ad groups, and maybe do a little bit of training and then you run your program and just put all that extra money into your ad-spend.
Andrew: And Drew, what would be a minimum, on the e-mail marketing side, what’s going to be the minimum fee to hire someone that is going to actually be able to move the needle, somebody who has the skills to make that worthwhile. You mentioned the minimum ad spend of $5,000 paid on advertising equates at $500 to $750 per month going to that person managing your PPC. What would it be on the email side to pay them? And do you pay them just straight-up fee? It’s probably not performance fee?
Drew: I haven’t seen as much there. I typically see $200 to $300 per newsletter, if you want to send out a newsletter. I’m not going to say it’s expensive or it’s cheap. It’s just that it’s not for everybody. If you’re just starting out, again, maybe it makes more sense to have somebody design your e-mail template and then you just run with it. When we charge $250 per e-mail, there is a certain kind of company that it’s perfect for. The company is doing a couple million dollars in revenue up and it makes a lot of sense and that’s probably just for basic production of a newsletter. If you want the agency to produce some content to put in the newsletter, then that would fall maybe more into a content marketing engagement and then you could do some sophisticated stuff like Chad and Austin do at E-Commerce Influence. You do a lot of the life cycle things and I think then you’re in the neighborhood of several thousand dollars a month to run those kind of campaigns.
Andrew: So, again, number five, be realistic about your budget. Number six, make sure the payment structure that you are paying matches the value delivery. A couple different things. If you’re going with a web designer to have, again, let’s say the new blog design I’m doing. That’s a one-time fee. It’s a “Hey, here’s the project. It’s very specific in scope. You pay us 6K. We’ll deliver this to you.” There’s going to be on-going optimizations, things that change occasionally, but, for the most part, you pay a big lump sum, you get a product in return.With the PPC and e-mail marketing, it’s a little bit different. It’s an on-going payment because that changes. It’s always happening, always needing to be tweaked. And one thing with PPC that I’ve always had trouble with, Drew, I’d love to get your take on this, is the bulk of work, at least in my experience for PPC campaigns, comes up-front with key word research, which finding what campaigns are profitable with getting those optimized. And granted, there may be a little bit of tweaking on an on-going monthly basis. These campaigns aren’t doing quite as they used to. We’ll turn them off. Okay, there’s a new product. Let’s add those. The vast majority of your work is done up-front, but you end up paying somebody on an on-going basis. When I’ve done those in the past, I felt there was a value mismatch. I was paying the same amount or a big chunk every month and I thought if, I just didn’t pay them and kept my campaign, I’d continue to get the majority of the value. Thoughts on that, Drew?
Drew: It’s something that we talk a lot about internally. We’re sort of in the hole for several months with a new client, because you make more money once the campaigns are built. You put in a significant amount of the time on the front end, configuring the account, getting the tracking set up, building out the ad groups and the research and things like that. I would say we spend maybe an hour to two hours a week on a typical client going forward. But it’s not the massive amount of effort that goes into months one. Is it a better way to price with one bigger up-front fee and then a smaller retainer for maintenance? The challenge there is that you don’t have a lot of clients who, without ever having used you before, will pay a big up-front fee to have their site built out or their campaigns built out. I’m not sure what the answer is on the agency side but you are right, that there’s a disconnect there.
Andrew: Yeah. It’s tricky. Number seven, and this is our final one, be skeptical of grandiose promises. I feel like these are especially prevalent in marketing and SEO firms. You know, give us three months and we’ll get you to the top of Google. We guarantee a 5,000% return on your ad-spend. Whatever the stuff, in my experience, a grandiose promises is almost certainly a mark of a sub-par firm. Really reputable firms are going to be able to over-deliver and under-promise. They’ll really, really be, even if they’re fantastic, they’re very leery of making promises to you. That’s been my experience, at least.
Drew: I agree. I think that kind of work, the grandiose results comes internally. It mostly will come from the people running the company and it’s hard to delegate that out or assign that somebody outside your company to give you that epic growth you’re after. They best I’ve been able to do in dealing with agencies is, you know, there’s a cost-value calculation and these guys are going to keep the ship afloat or incrementally improve us or it just makes sense to outsource this to an agency right now. But I’m not looking at that agency to reinvent my business or to grow me a hundred times in a year.
Andrew: So there you’ve got it, the seven things to consider when you’re looking to hire a services agency. One thing, if you are a private forum member or if you’re not and you’ve been thinking about joining, is we’ve just rolled out the last couple months a service provider directory in the forums. Speaking of agencies and contractors that you need to vet further. Oh, that was a nightmare getting that done. Should’ve gone with a slightly more expensive programmer. I will not do that again. Quality control took six weeks of my time.But we got it all set up. It’s really cool. You can get actual recommendations from forum members, tried and true trusted community members on who does a great job for e-mail marketing, for web design. It’s set up in a way where it’s really easy to search people by skills and sub-skills. So if you’re looking for somebody to do EDI scripting integrations for your website, that’s the kind of thing you can search by. Available to all private forum members. If you’re in right now and if you’re not, definitely a resource. We’d love to have you join up and get access to that.Drew, I’m going to have to go in, man. I think, with Mineral.io, I know you’ve been hacking it and you’ve got 25 positive recommendations all that came out in the same day, seems a little suspicious over there in the service provider directory.
Drew: Really? I didn’t even know we were in there.
Andrew: No, I’m just kidding.
Drew: I was like, 25 in a day. I was writing down here “make sure you join Andrew Youderian’s service directory.”
Andrew: There’s a private forum thing. I should tell you about it, Drew. You should join us sometime.
Drew: I do go in there from time to time.
Andrew: Drew, It’s been awesome as always. Thanks so much, man.
Drew: My pleasure. Talk to you next time.Andrew: That’s going to do it for this week. If you enjoyed the episode, make sure to check out the eCommerce Fuel private forum, a vetted community exclusively for six and seven figure store owners. With over 600 experienced members and thousands of monthly comments, it’s the best place on-line to connect with and learn from other successful store owners to help you grow your business. To learn more and apply, visit ecommercefuel.com/forum.
And if you’re looking to hire an in-house employee vs. an agency, make sure to check out our job boards. It’s the best place to post your job listings if you’re looking to hire in-house digital marketing talent.
Thanks so much for listening and I’m looking forward to seeing you again next Friday.
