Rather than an Agency

Four words are quietly reshaping the marketing services industry right now: “Rather than an agency.”

As part of that narrative, I’ve noticed four little words creeping into procurement requests that are becoming alarmingly frequent. Alarming, that is, if you run an agency.

I’m seeing them in more and more briefs and LinkedIn posts that are saying “We’re looking for a freelancer (rather than an agency).”

Those four little words, parenthesised, and emphasised.

It’s hard to ignore the scaling of the gig economy. Freelance specialists abound.

Have agencies become to marketers in the twenty-twenties what recruitment agencies became to employers in the noughties?

It seems it’s the format of the solution that is more important to the buyer.

Recruitment agencies were once seen as expensive middlemen, until businesses realised they were paying for systems, process, and efficiency. Recruitment agency fees may actually turn out to be a bargain buy for businesses that are recruiting. They’ve got systems and processes set up to make recruitment as efficient as possible. Unless you have a dedicated HR function, you will not. Fact.

Freelance marketers, PRs, designers and developers are also cheaper than agencies. Obviously. They don’t have any pesky office overheads to cover either, like pension plans or health insurance. All they need is a phone and a laptop, a desk in their spare bedroom and they are off and running. I know, because this is how my agency started life in 2002. As a freelancer.

Which raises an uncomfortable question in my mind: why build an agency at all if buyers are now filtering them out by default?

Has the marketing management model changed that much?

Or do agencies urgently need to review their value proposition?

I think it’s the latter.

Agencies have always touted a guns for hire model. We (broadly speaking) as an industry price by the hour, and charge by the hour for human skills and time. So perhaps we should forgive the customer for assessing our value solely on the hourly rate they pay.

The question is: do we add any more value beyond that? If the answer is no, then you have a problem. The only thing that matters is your hourly rate and you are fighting a price war. You are a washing detergent brand, much like the other brand on the shelf, both working perfectly fine to wash clothes, the only difference is price and (maybe) smell.

But if the answer is yes, what is that value? And how do we improve the communication of that value.

To attempt to answer that question, I’m going to borrow the hairdressing industry to illustrate how value is added to a service. Cards on the table, one of my good friends runs salons, and she’s at the top of her game internationally. I’ve learned a lot about that industry from working with her and how their business works.

The price of a haircut in one of their salons is £54 for a senior stylist. Just along the street another salon is offering a cut and blow dry for £30. A cut’s a cut, right?

Here’s what the consumer doesn’t know:

In the UK, there are effectively zero barriers to opening a hair salon.

No mandatory qualifications.

No experience needed.

A chair. A sink. A pair of scissors. And you’re in business.

I could open a salon this afternoon using my kitchen scissors and no one could stop me. A bit like starting up as a freelance in some form of marketing, really.

I’ve got 25 years of experience of seeing former employees, summer students and apprentices start up on their own as freelancers to undercut us at half our price. Some qualified. Few as experienced. None of them with an infrastructure behind them.

The fact is that £30 haircut could literally be delivered by your Mum. We all know how those unfashionable bowl cuts went down at primary school! It’s much the same as your social media strategy being delivered by someone who was a junior apprentice at an agency with 3 months experience until yesterday.

If that’s the case, there’s value in that additional £24 of pricing. So, what is it?

Let’s start with the basics: scissors. Hairdressing scissors at the top end of quality are ludicrously expensive. I’m talking hundreds of pounds, not the ten quid options you can buy in Tesco. Hairdressers do not share scissors. It’s not a tool the business buys, they are personal to them. On a hairdressers’ salary, most high-quality professional scissors are unattainable. But this professional salon helps its stylists fund those purchases. If they are going to cut at competition standard, they need the right tools for the job. Tools are important, and in agencies, tools are essential.

Next up is, I believe, the important one: training and qualifications. Hairdressing is a skill-based profession first and foremost. It uses an apprenticeship model, with high levels of on-the-job supervision and practical training to ensure consistent ability and quality. Enhancing knowledge comes further down the line. Beyond cutting, colouring requires, to some extent, an understanding of chemistry and chemical handling processes. It’s not the kind of stuff you buy in a box in the supermarket and slather all over your scalp. The mixing and application of colour combine artistry and chemistry at some of the highest levels. Professional salons invest in the education and the skills of their team develop as a result. Professional agencies do the same. Knowledge shifts constantly in our game. If you can’t afford to learn, you’ll always be behind the curve.

Now it’s my favourite added value: sustainable employment. This salon employs their team. No “rent a chair” solution for them. Those hairdressers all have pensions. And they get bonuses for selling product. They get paid annual leave. And sick pay. They pay taxes too. These benefits are taken for granted until you are out in the wild being freelance. There’s no one to cover for you when you are sick. Or on holiday. Worse, you can’t afford to be sick or take a holiday because it reduces your ability to earn. When you choose a salon, you choose a team. When a stylist is off sick, they still ensure your hair gets cut. As a result, I’ve had my hair cut by the big boss of this salon on more than one occasion. That’s world leading hairdressing I’m getting at a fraction of the price.

Is that worth an extra £24? Skilled, qualified people with the best tools for the job, and who are being supported in their current career and beyond. A team that works together to ensure delivery, centred around your needs, not theirs?

What are you really paying for when you hire an agency?

• Tools you couldn’t justify buying alone. It’s access to shared infrastructure at scale.
• A trained team, not a single point of failure. Someone off sick or not working that Monday? Then we’ll sort it.
• 5 days a week, 52 weeks a year service delivery. Continuity when someone is on holiday.
• Juniors being trained so that the next generation have experience in your industry or business.
• Systems that compress delivery time, so your money is well spent.
• Decades of accumulated pattern recognition.

That infrastructure isn’t visible in an hourly rate. But it’s embedded in the outcome of what agencies deliver.

Is a cheap plumber better than a qualified one? A cheap haircut better than an expensive one? A solitary freelancer better than an agency team?

I believe the honest answer is no.

So why are marketing leaders excluding them as solutions?

The systems we invest in as part of our structure enable our team to do their jobs better. Freelancers can be excellent. Many are exceptional. But excellence is not the same as infrastructure. As an agency, I believe we bring added value to the delivery.

We invest in media monitoring platforms. Journalist databases. Digital research tools. Project management systems. Reporting dashboards. Individually, each one is expensive. Collectively, they improve our time efficiencies, increase accuracy, and reduce your commercial risk.

We’re not cheaper. But I’d hazard a guess that these tools make us quicker and more efficient. If we can do it in half the time, and cost £90 an hour, and a freelancer costs £60 an hour, we will be cheaper.

If we can do it faster, and better, then our higher hourly rate becomes irrelevant. But that level of efficiency is invisible in procurement spreadsheets. Until it’s not.

Do you know how we know this? Because we train younger, less experienced people and we know how efficient our systems make us. We know freelancers take longer. We’ve hired them. They might have exactly the same qualification as us but the experience mix plus the systems and tools means we can process work in compound time. Agencies are masters of efficiency.

It was a post on LinkedIn that sparked the writing of this article. Here it is verbatim:

I’m looking for recommendations for a freelance PR specialist with strong experience in food and drink – particularly trade press (rather than consumer).

We’re keen to work with a freelancer (rather than an agency) who understands the sector, has solid media relationships, and can help us land coverage for our OOH coffee range.

Now, myself and a colleague have more than four decades of experience between us working in PR, much of that representing household name food and drink brands. We understand the sector. We have solid relationships with journalists. Oh, and I also own a coffee company, so I am deeply saturated in random coffee knowledge that the average human won’t be (read: coffee geek).

But we are an agency. This opportunity is not for us. Even though we could add significant value.

Yes, I could get in touch. Yes I could try to convince her. But before my credentials would even get a hearing, I’d need to overcome her objections to the agency wrapper.

Whether I like it or not, there’s a disconnect that exists between agency cost and agency value.

This isn’t an argument about freelancer versus agency. It’s about the value of service delivery nestled within a commercial infrastructure versus an individual infrastructure. It’s about removing single points of failure from your business. It’s about sustainable business models versus short-term cost optimisation.

These are strategic business decisions, not procurement cost cuts. And they have long term benefits to your business, all wrapped up in a slightly higher hourly rate. Or a more expensive haircut.

Here’s my plea to those marketing leaders out there: widen your talent pool. Don’t try to solve business problems with a pre-defined format. Scan the market for the range of solutions available to get the best outcome for your budget.

And to my fellow agencies? If you can’t articulate the value that sits between your hourly rate and your invoice total, don’t be surprised when your clients default to cheaper.

There’s more where this came from. I share more of my thinking on Cunningly Good Marketer on Substack. Subscribe to get my opinions, experience and real-world lessons straight to your inbox.