Be Kind if You Have to Be Cruel …
For many B2B tech startups, hiring a marketing agency can feel like a shortcut to fast growth, but over time it can also become an expensive crutch. If you’re finding that your agency is no longer delivering results, lacks strategic alignment or just doesn’t understand your product or market, it might be time to rethink the relationship. Let’s explore when and how to cancel your agency engagement, utilising a fair and amicable process that allows the agency an opportunity to remedy the situation before a final decision is made. Sometimes you may need to bring your marketing back in-house or restructure for agile growth, but whatever the reason, it’s important to be kind, even if the outcome may seem cruel.
The Slow Decline
You may at some point reach a natural performance ceiling where you have exhausted what is achievable with a particular marketing activity or a marketing agency’s capacity to deliver. Your existing provider may have fulfilled their obligation, or their performance no longer warrants continued investment. Good agencies will normally anticipate and let you know when the timing is right to try something different or if they feel they are no longer a good fit for your growing and changing needs. However, not all agencies operate the same, or are prepared to be quite so honest and transparent. Some will continue operating as normal, oblivious to the fact you are no longer satisfied with their output, but it’s your duty to make sure that never happens. Over time, as an agency becomes comfortable and perhaps may even start to take your custom for granted, you may notice a slow but definite decline in their commitment and results.
Regular Performance Reviews
If you are working closely and correctly together, any variance in output will be clear for everyone to see and conversations about remedial action must be happening before the situation becomes untenable. For this reason, it’s always good to schedule regular check-ins, with monthly and quarterly reviews to assess activity, output and results. It is the job of your internal marketing team to continually assess these results and put constant but friendly pressure on any agency to deliver. If it becomes clear that attempts to remedy a situation have failed, then it may look like things aren’t going to get any better and a different conversation may be necessary. However, this should never come as a surprise unless other factors are involved, such as a budget cut forcing a new direction.
What to do When An Agency is Not Performing
If your marketing agency is no longer performing satisfactorily, the first step is to raise this on the regular performance review calls. It’s important you initiate a candid conversation and ask what remedial measures are being taken. If no actions are in play, then give them time to come back with suggestions and a plan that you can review and discuss together. Always remember, you are dealing with people and so treat them fairly and with respect. Document the details of the conversation for future reference.
Schedule a separate meeting with a senior director to discuss any specific concerns, citing relevant and demonstrable examples, such as missed targets, delayed deliverables or ineffective campaigns. During this meeting, it’s important to listen to the agency’s perspective, as there might be external factors affecting performance. Always be mindful that good marketing takes time to deliver, so you must be consistent and patient to allow results to flow. Provided you have done your bit to fully support the agency, they can’t point the finger at you as a limiting factor if you have upheld your obligations. Again, make sure everything is documented, including any new plans or initiatives to be taken.
Agree a Follow-up Review
Set clear expectations and agree on a timeline for improvements, including measurable milestones. Schedule a follow-up meeting to review and discuss the action taken in detail and the outcome delivered. If the agency is still struggling to perform and fails to meet these new objectives, you will need to assess whether more time is needed or determine that this confirms your suspicions and they are no longer a good fit. It’s not uncommon to outgrow an agency or for your marketing needs to shift at different stages of growth, meaning you may have to leave some partners behind and introduce new ones. Marketing is a dynamic activity; tactics that worked before don’t always deliver results indefinitely, and sometimes you need to adapt and try new things while reducing investment in old tactics that are no longer effective.
Deciding to Change
It’s not necessarily anyone’s fault when this happens; you optimised an opportunity while it was relevant and then you hit a point where the law of diminishing returns takes over. This means you cannot invest more in that activity and still expect respectable results. If an agency can no longer deliver the results they used to or are targeted with, it may be time to reassess the partnership. After conducting your performance review and if there is no material improvement after a reasonable period, compare and evaluate the activity to other options available to you, including but not limited to instructing another agency or taking the work back inhouse. It may be time to shift that budget to something else, whether that is an internal marketing activity or engaging a new marketing agency, depending on your analysis and needs.
Always Keep Your Options Open
You must always be prepared to explore alternative options that better align with your goals and expectations, even when things are going well, as you never want to miss a new opportunity. Even if you don’t have the spare capacity to take on something new, it is always good to know what you would do given extra budget. Before cancelling an agency in writing, you will have several meetings to discuss your concerns and review their performance. Once you have made your decision, then you can discuss this with the appropriate director at the agency and let them know your intention before making it official.
Cancelling an Engagement with a Marketing Agency
It’s not a conversation anyone wants to have, but it’s one that any marketing professional will have to have throughout their career. As you gave the agency an opportunity to improve and they didn’t move the needle, it shouldn’t come as a complete surprise, although it may be a disappointing outcome. Even if they disagree with your reasons and conclusion, you are still the decision maker and must do what is right for your business first and foremost. You don’t always have to agree, but you are the final arbiter of what happens next, so the responsibility of any decision falls to you, not the agency.
Always be cordial and professional and be factual with your reasons; never make it personal. Discuss plans for ensuring a smooth transition during the notice period to minimise disruption or risk a fall in activity. Always part on good terms, allowing you the option to restart the engagement in future, when required. If your limiting factor is budget-related, rather than the performance of the agency in question, then a good agency will be happy to put the agreement on hold until such a time that you can afford to pick it up again.
You may want to read: “Why Tech Startups Offer Equity to Employees.”
