Before we get started… |
This Thursday (July 23rd at 2 pm Eastern), I'm hosting a free live workshop where I'll walk you, step-by-step, through the 6-step process we use to build custom "operating systems" inside our client and portfolio companies… |
…the same systems we've used to scale our own $200M portfolio. |
I'll build it out right in front of you, and since it’s live, you can ask questions along the way. |
Click here to register (it's free). |
Ok, back to this week's issue… |
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"Hey, Ryan…do you know a marketing agency that DOESN’T suck?" |
I get some version of this question at least once a week, and it's almost always from a friend or client who just got burned. |
They paid the retainer, sat through the "strategy calls," waited out the 90-day ramp-up…and got nothing but a deck full of excuses. |
Here's the fun part, though: a bunch of our clients ARE marketing agencies. |
And you know who they complain about? |
Their clients. |
So who's right? Honestly…both of them. |
The agency-client relationship is broken. Misaligned incentives, unspoken expectations, and a breakup that both sides can feel coming but neither side wants to talk about. |
I'm happy to report this is a problem we no longer have. |
Some of our agency relationships have lasted 5+ years. Others lasted 6 months and ended with a glowing testimonial and a referral. |
Either way, everyone won. |
That's not because we got lucky. It's because every agency we hire has to pass a three-filter test before we sign anything. |
I call it The Agency Test, and so far, my success rate with agencies that pass all three filters is 100%. |
If you hire agencies, this is how to stop getting burned. And if you run an agency, consider this a cheat sheet for becoming the agency nobody wants to fire. |
Here’s how it works… |
Filter #1: Do They Specialize? |
I’m looking for specialization in two areas: |
First, they need to specialize in a specific deliverable. |
Branding…Meta ads…short-form video…email…SEO/AEO…you get the idea. |
If an agency claims to be "full service," they're either lying, delusional, or they're truly massive and they want me to pay extra for layers of overhead I’ll never benefit from. |
Either way, I'm out. The best agencies specialize. |
Second (and this is the one everybody misses), they need to specialize in a business like MINE. |
Notice I didn't say "industry." What actually matters is that they've done great work for businesses with the same model and sales motion as yours. |
This is why an agency can do phenomenal work for one client, then fail miserably doing the exact same work for another. They didn’t get dumber… they’re just executing the “right” playbook on the wrong field. For example… |
A Meta ads agency that crushes it for DTC e-commerce will often faceplant with high-ticket B2B, because e-commerce measures purchase cycles in minutes, where B2B measures it in MONTHS. A sales trainer who's brilliant with home service companies (one-call close, single decision maker) will fail with a multi-stakeholder, consultative sales motion, because "close on the first appointment" is bad advice when four people have to sign off on a contract. An email agency built around e-commerce promo calendars will burn out a B2B list in a quarter, because "send more offers" only works when there's something new to offer every week.
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Great work isn't the bar. Great work for a business that operates like yours is the bar. |
(And if you're the agency reading this: this is why niching down lets you charge more, not less. "We run Meta ads for medical practices" beats "We do everything for everyone" every single time.) |
Filter #2: Are They Transparent? |
Next question: are they willing to show you how they do what they do? |
I won't work with anyone whose process is a "black box" where we hand them data, and they hand back finished work with zero visibility into what happened in between. |
If it's a critical system in my business, I need to know how the sausage gets made. We can't afford dependencies beyond our control. |
Now, if you run an agency, I know exactly what you're thinking: "If I give clients my playbook, they won't need me anymore." |
And if we're being honest…that's the goal. |
Every business who’s ever hired an agency is secretly (or not so secretly) hoping to one day learn the agency's secrets and bring the whole thing in-house. That's just the reality of running a service business. |
The reason we have great relationships with all of our agencies is because we acknowledge that reality out loud, on day one. |
Here's what I say, almost word for word: |
"My goal is to eventually bring in-house everything I'm hiring you to do. I can't do it today…that's why I'm hiring you.
As long as you can do it better and cheaper than we can, we'll happily keep paying you. If we ever believe we can do it better and cheaper ourselves, that's what we'll do.
But I promise you this: you'll get plenty of notice, a glowing testimonial, and all the referrals you can handle…as long as you do great work." |
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| -Me…to agencies |
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I've delivered that speech at least a dozen times, and not once has an agency owner said, "No, that's not fair. I don't want to work with you." |
Because service companies get it. They know the deal. They just want to know they'll be treated fairly, too. |
As a result of that transparency, some of our agency relationships have lasted 5+ years, because we still haven't figured out how to do what they do better, faster, or cheaper…so we happily keep paying them. |
Other relationships last 3 to 6 months: we work together, we learn what we need to learn, and we bring it in-house. |
Either way, the agency is treated well, compensated fairly, and (assuming they did good work) they also get a customer story and ongoing referrals out of the deal. |
Everybody wins. And even when the relationship is "over," it doesn't always end… |
Which brings me to the third filter. |
Filter #3: Do They Have an Off-boarding Plan? |
The final thing we look for is whether the agency is willing (and able) to train one or more people on our team to do the work they're currently doing while staying on in a coaching and oversight role on an ongoing retainer. |
Read that again, because it's the part nobody does: the agency stops doing the work, but keeps getting paid to make sure the work is done right. |
We win because bringing the work in-house means higher quality, greater redundancy, and often a real reduction in cost. The agency wins because they traded a full-service client for a retainer client…and that retainer revenue comes in at a higher gross margin than the original deal. The relationship wins because nobody is dreading the breakup. The breakup was part of the plan.
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If an agency isn't willing to offer this, it doesn't make them bad people. It just means they don’t have the resources (or the abundance mindset) required to work with one of my companies. |
So that's the test: |
Do they specialize (deliverable + model)?
Are they transparent?
Will they off-board (and ideally coach/consult)? |
If they specialize…if they open the books on their process…and if they agree, before you sign, to eventually train your team and coach from the sidelines… |
…hire them. |
That's an agency that (probably) doesn't suck. |
⚡️ Action Step: Run every agency you currently work with (and every one you're evaluating) through The Agency Test: Do they specialize in your deliverable AND your business model? Will they show you how the sausage gets made? Will they agree, upfront, to an offboarding and cross-training plan? And if you're starting a new agency relationship this quarter, steal my speech word for word…before you sign the contract. |
Give it a shot and let me know how it goes… |
-Ryan |
Ryan Deiss
Co-Founder and CEO, The Scalable Company |
P.S. In case you missed it up top: this Thursday (July 23rd at 2 pm Eastern), I'm hosting a free, live workshop where I'll walk you, step-by-step, through the exact process we use to build custom "operating systems" inside our client and portfolio companies. |
This is the process we use to help founders scale their businesses AND exit the day-to-day, and I'll be answering your questions live as we go. |
I only run this workshop a handful of times a year, and it always fills up. |
Click here to grab your seat (it's free). |
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