How to evaluate your marketing agency: six checks

You pay the agency every month. Their reports look busy: impressions are up, cost per click is down, a new campaign has launched. And yet you couldn't say how many customers they've brought you this quarter.

That's the most common situation I see in SaaS companies between $1M and $20M ARR. The agency may be doing good work, or it may not. The only way to know is to check, and most of the checking takes an afternoon.

These six checks work for any agency: paid ads, SEO, content or a full-service shop.

1. Do their numbers end at customers?

Open their last monthly report and find the last number in the funnel. If it's clicks, impressions, sessions or "leads", the report stops before the part you pay for.

Ask for a version that goes all the way to qualified opportunities and customers, using your CRM rather than their ad platform. If they say it can't be done, the real answer is usually that nobody has connected the two. That's fixable, and worth fixing before any other decision.

2. What does a customer really cost through them?

Add up everything you spend on the channel they run: their fee, the ad spend, the tools and any of your team's time it takes to manage them. Divide by the number of new paying customers from that channel over the same period. Use a period at least as long as your sales cycle.

That's the true cost of a customer through this agency. Compare it with what a customer is worth to you. If it takes more than about 18 months of gross profit from a customer to earn back what you spent to win them, and the agency can't show you a trend going the right way, you have a problem to discuss.

3. Who actually works on your account?

Agencies often win accounts with senior people and then staff them with junior ones. Ask who did the work last month, by name, and what their experience is. Then ask how many other accounts each of them manages.

There's nothing wrong with junior people doing execution. There is a problem if nobody senior has looked at your account since the pitch.

4. Do they tell you what to stop?

A good agency suggests cutting spend that doesn't work, even when it lowers their fee. Look back over the last six months of reports and calls. Has the agency ever recommended pausing a campaign, a keyword set or a channel?

If every recommendation has been to add budget, test something new or expand scope, treat their advice as a sales pitch, however good the intentions.

5. Do you own your accounts and data?

Check who owns the ad accounts, the analytics property, the tag manager, the content and the reporting dashboards. They should all be in your company's name, with the agency added as a user.

If the agency owns them, leaving becomes expensive: you can lose years of campaign history and conversion data. Fix this now, whatever you decide about the agency.

6. Does the work match your positioning?

Read five of their ads, landing pages or articles as if you were your best customer. Do they describe the problem in the words your customers use? Would a buyer understand within a few seconds who the product is for?

Agencies often work from a brief written once and never updated. If the work sounds generic, the brief is usually the cause. That's on you as much as on them.

In one case, I assessed how a client's SEO agency was really doing in terms of tangible results. The client wanted to cut the budget, so I found an alternative that cost 2.5 times less with no loss in the quality or scope of work. If budget hadn't been the priority, I'd have looked for a better agency at roughly the same cost.

What to do with the answers

Count how many of the six checks the agency passed.

• Five or six: a good agency. Give them better data from your CRM and a clearer brief, and they'll get better still.
• Three or four: worth a direct conversation. Share what you found, agree targets that go all the way to customers, and review again in 90 days.
• Two or fewer: start planning a change. Move account ownership to your company first, then decide whether to replace the agency or bring the work in-house.

The real problem is usually on your side

Most agency problems I've seen started with the client: no clear targets, no access to the CRM, no one senior to review the work and push back. An agency without a strong client-side owner drifts towards what's easy to report.

If nobody in your company has the time or experience to manage the agency, that's the gap to fix. A fractional CMO is one way to fix it. I set agencies' targets, review their work every month and tell the founder honestly whether the fee is earning its keep.

If you'd like a second opinion, my Growth Audit ($1,900 fixed) includes a review of every agency and tool you pay for, with true cost per customer by channel. Or book 20 minutes and we'll go through your last agency report together.

Related reading: Interim CMO for SaaS: when you need one and what it costs · When should a bootstrapped SaaS hire its first marketing leader?