B2B SaaS Marketing Agency vs In-House: The Biggest Differences That No One Talks About
Last updated: November 23rd, 2023
B2B SaaS companies are currently re-accelerating as demand picks up again in 2024, yet to achieve those goals, many of them need additional bench strength to aid their current team.
The process of hiring in-house takes significant time and resources, which isn’t realistic for most B2B SaaS companies given the uncertain market conditions and reduced budgets. Especially for teams that have unfortunately experienced team reductions recently.
The option is to choose between hiring an in-house marketer (or in-house marketing team) or a digital marketing agency.
A digital marketing agency can often be a good option as it provides more flexibility than hiring an in-house marketer. You can move faster and leverage the expertise of marketers who have implemented a repeatable proven process for multiple other SaaS companies just like yours.
But a lot of companies have had bad previous experiences with agencies, and going the agency route requires:
- Relinquishing some control
- Having to trust people outside of their company with intellectual property and the outcome of getting them a return on their investment
- Often a higher upfront (perceived) cost
Why a perceived cost?
A common scenario we see in B2B SaaS is when a company is deciding between hiring one new full-time marketer or hiring an agency. But these aren’t really equivalent, because the varied skill sets needed to do digital marketing require different people to execute. And while an agency will have several people with different areas of expertise working on your marketing (albeit, part-time), one full-time employee very rarely possesses that entire range of skills needed. So the more accurate comparison when it comes to cost is hiring a demand generation team (of say, 3 in-house hires) versus an agency, in which case agencies often work out to be less upfront cost.
With that said, the biggest difference we see in weighing the two options that often isn’t taken into account is: if you think about the number of data points that they can access when evaluating an agency versus an in-house candidate, there is typically a lot more information to base decisions off of when evaluating an agency — for whom having a website, a blog, a newsletter, webinar content, and case studies, among other things, are commonplace. So in the same way that marketing works better when you have more data, we think this applies to hiring marketers as well.
In this article, we’ll expand on this idea and discuss how companies should think about the costs associated with each option, as well as share specific recommendations for how they should evaluate agencies to find ones they can actually trust and who can actually deliver.
Note: We acknowledge that, yes, we’re biased in that we’re a marketing agency. And we’re going to assert in this article the ways in which we see choosing an agency over building an in-house team can be advantageous for companies making this decision. But throughout this article we’ll do our best to also acknowledge the counter-arguments that relate to the points we make. And by all means, we encourage you to go read Google’s top 10 articles on this topic. You’ll see the trends and the trade-offs that you should be considering, some of which we’ll cover below.
When to consider agency vs. in-house hiring
Many of the SaaS marketers we talk to who are currently considering hiring either an agency or in-house marketer are often experiencing one of the following scenarios.
Need help deciding if hiring a marketing agency is right for you? Meet with us here and we’ll explore a few options together.
Scenario 1: Budget/staffing changes
If there were organizational changes to your marketing team (e.g., team members left), or your budget was drastically altered, your current resources may not be sufficient to execute the existing marketing plan and hit targets for 2023.
To adjust your current trajectory and achieve those goals, you’ll likely need more resources to execute the marketing plan and therefore must either hire for it.
Scenario 2: New marketing leaders
If you’ve recently started at a new SaaS company and are charged with hitting aggressive targets by the end of the year, a major lever you can pull to alter your current trajectory is the marketing team itself.
If the current team is underperforming, there are three main options you can consider:
- Replace existing in-house marketers
- Hire more in-house marketers
- Replace the existing agency
Regardless of which option you choose, it’s essential to choose one of them if data shows that the current strategy is not on track to hit your goals – especially if you’re trying to make your mark as a new leader.
Scenario #3: Change in growth trajectory
If you have aggressive goals to hit by the end of the year and you need to dial up the execution speed to hit those goals, you don’t really have time to waste with hiring and onboarding.
Therefore, you’ll have to take into consideration the time (and cost) associated with both the in-house and agency hiring process.
While evaluating an agency may take some time, it’s typically much faster and more cost effective than finding, interviewing, and onboarding one or multiple in-house marketers.
Comparing the cost and value of in-house vs. agency hires
The following is food for thought on how to weigh the two options when it comes to investment and returns. It’s a model that’s meant to be useful, not in any way absolute or foolproof.
And frankly, just because one option is more or less affordable or expensive shouldn’t entirely dictate your decision. Depending on what your company values and what your marketing budget is, there are a lot of factors outside of cost alone that warrant influencing the direction you choose to go in.
With that said, let’s jump into our (read: purposely over-simplified) example.
Above we mentioned a common scenario: a company is deciding between hiring one new full-time marketer or hiring an agency. So let’s say there is a hypothetical company in this situation and in particular they’ve decided to hire a marketing manager.
Here’s some additional context:
- Their goal is to increase annual recurring revenue by $500k.
- They have narrowed their search down to an in-house candidate and an agency candidate, both with equivalent capabilities (eg. years of experience, channel expertise, industry expertise, etc.).
- The in-house SEO hire will cost $6K/mo and the agency will cost $10k/mo.
If they go with the in-house hire, because of the nature of the onboarding process and the systems the new hire will need to create in order to get up and running, they’ll hit their stride and really begin getting into the work 3 months in. (You might think, not at my company. Or, we’d move faster than that! If that’s true, ignore this point.)
But because they’re only one person, it takes them to the end of the year to hit that target. The company paid them $72k in salary, so they made $428k in profit on their investment by the end of that year.
However, this profit figure isn’t entirely accurate as it only factors in the cost of the salary – not the full cost burden. The full cost burden would also include these expenses:
- Recruiting & hiring costs
- Equipment / office space
- Onboarding & training
- Availability (working hours, sick days, and vacations)
In addition, there’s the cost of lost time while you’re recruiting, hiring, and onboarding the new marketer. It may take weeks (even months!) to source, interview, and hire just 1 new in-house marketer.
Note: With the in-house hire, in addition to the time spent onboarding and creating systems for execution, the time it takes to hire — often a period of several months from search, screening, interviewing, selecting, and actually beginning — should also be taken into account. Granted, as we’ll discuss below, you should put ample effort and time into hiring an agency, but typically it can be done much faster than hiring the full time employee (as agencies are usually ready and willing to begin new client engagements).
While you’ll still typically have to spend some time onboarding an agency, it’s typically a much faster process than onboarding an in-house marketer as agencies already have systems and processes in place to expedite the new client onboarding process.
Now, let’s play out a scenario where the SaaS company chose to hire an agency instead.
Given that agencies have their operating systems in place already, access to the most sophisticated marketing tools, and multiple marketers involved with doing the work, they hit the ground running almost immediately, and are able to move faster to hit the revenue goal in the first six months. Again, they have equal capabilities to the in-house marketer, but systems take a long time to create, and already having those in place gives agencies a huge advantage on speed.
If they kept that pace going, by the end of the year, the SaaS company would have spent $120k on their fees, but they would have made them $1 million in revenue (or a profit of $880k when you minus their fees). The agency would have made the company more than twice as much as the in-house hire — again, solely based on them being one person, and having to set up their own systems to get things up and running.
At a 12% rate of overhead cost at the end of the year for the agency, and the in-house rate at 14.4%, the agency both works out to be more affordable, more profitable, and faster, all at the same time.
Finally, this doesn’t factor in the results that an agency versus an in-house marketer can bring to the table.
It’s unrealistic to expect a single in-house marketer to have the combined expertise as several specialized marketers working at an agency, nor is it realistic to expect an in-house marketer to deliver the same output working 40 hours per week as a team of marketers at an agency.
Therefore, the value derived from an agency will likely be much higher than an in-house marketer – regardless of that marketer’s talent.
And speaking of value, it’s important to compare not only the costs associated with hiring an agency versus an in-house marketer, but also the ROI derived from each.
This is because marketers all face a common challenge seeking sign-off on budget. Most stakeholders in an organization see marketing as a cost-center.
As a marketing leader, you’ll need to make a case for the value of your hire (either for a marketing agency or in-house marketer) to win budget. Otherwise, the executive team will likely reject your proposal as they strive to protect cashflow.
Here are just a few different modalities you can use to shift stakeholders’ from viewing marketing as a cost center to a value center and earn buy-in for a new hire:
- Money Made
- Money Saved
- Time Saved
Below we’ll discuss how to frame each of these modalities to stakeholders, and some factors to consider for each modality when choosing between an in-house and agency hire.
First, rather than just thinking about how much money you’re spending when hiring an agency or in-house marketer, think about the ROI they’re delivering.
For example, if you invest $100,000 per year into either a marketing agency or an in-house marketer, yet they deliver $1,000,000 in value annually, it should be a no-brainer for stakeholders to provide a $100,000 budget.
As you’re debating between hiring an in-house and agency marketer, it’s important to consider which one will give you higher compounding returns.
Here are recent examples of how we’ve paid for ourselves plus added significant revenue growth for our clients:
A smart hiring decision can also save your company money if it means that you can consolidate and cut expenses without slowing performance.
For example, if you’re considering hiring three new in-house marketers on $100,000 salaries, onboarding a single marketing agency for $150,000 to do the work of those three marketers could save you $150,000.
And that figure doesn’t account for the full cost burden on the in-house marketers, such as bonuses and benefits!
When you hire one marketer, the maximum amount of time they can dedicate to delivering value to the company in a regular work week is 40 hours. And that’s the maximum number of hours they contribute each week.
If you account for breaks and unplanned interruptions, 30 hours is a more realistic estimate that a full-time employee spends contributing value to the company each week.
Now think about all the things you want this marketing hire to accomplish. If you estimated how many hours needed to do the work to hit your goals, how long would it take them to do it all? It might amount to years.
When you hire an agency, you’re making an investment in a full marketing team that isn’t constrained by the availability of a single marketer.
Some agencies bill on time and materials, so you’ll have to consider their rates versus the adjusted hourly rate of an internal hire.
We don’t follow a time and materials model at Powered by Search.
We partner with our clients on a value-based model. You tell us what you want to achieve, and we put the resources behind it to get you there without nickel and dimming the time required to get there.
As a result, we get our clients to results faster, saving them countless hours and delays compared to hiring an in-house marketer.
Evaluating whether you should hire an agency or in-house marketer
There’s demand for both in-house marketers and marketing agencies because they each have unique pros and cons, and they’re often ideal for different use cases.
Here’s a brief overview of the unique advantages and disadvantages of both marketing agencies and in-house marketers:
The best of both worlds: leveraging in-house talent and marketing agencies together
As you can see in the table above, there are unique pros and cons to both in-house marketers and marketing agencies.
If you only use in-house resources, you may move too slowly to achieve your goals – especially if you have a small team with limited time for execution. In addition, betting the farm on a single person to change the trajectory of your marketing strategy and hit numbers by the end of the year is risky.
On the other hand, relying on a marketing agency to create and execute your entire marketing strategy might be too expensive and you may feel a loss of control. How do you know that the strategy they’re executing is working?
As you can see, neither option is definitively better than the other.
To take advantage of the benefits both marketing agencies and in-house marketers have to offer and cover each one’s shortcomings, consider using both of them together.
If you’re a marketing leader who needs to augment your team, you can hire an agency with a proven point-solution program that can quickly solve the specific challenge you’re facing (e.g., SEO, paid media, etc.).
However, you also need an in-house marketer who can manage the relationship and guide the agency so that they understand your product’s unique value, your customers’ pain points, and the general industry to ensure all marketing messaging is accurate and attuned to your brand.
If you’re a founder or investor and there currently isn’t a marketing leader in place, a marketing agency can act as a fractional marketing leader to help you get a marketing program off the ground.
The marketing agency you hire should have a proven process that can shorten the time to outcomes and results.
However, you should still eventually hire a marketing champion in-house to help the agency better understand your customers and product. In addition, as your brand evolves and grows, that marketer can also communicate those changes to the marketing agency so that everyone stays on the same page.
Otherwise, your marketing material won’t align with the core business and you’ll see off-brand messaging, low conversions, and high churn.
How to choose a B2B SaaS marketing agency you can trust
You can think about the process of selecting a digital agency as a series of stages:
- Reviewing their online presence
- Talking to their current or past clients
- Having talks with the agency
- Reviewing their proposal
What follows are our recommendations for each stage.
1. Review their online presence
The first step to evaluating a B2B SaaS marketing agency is to review their online presence so that you can gauge their credibility, determine their expertise, and identify their key differentiators.
To do this, you can search for pain points you want the agency to solve and see if they have content and case studies around those topics.
If the agency actively produces content on those pain points, it indicates that they specialize and have expertise in solving those challenges, and it also gives you insight into their systems and processes. You can then evaluate the logic of those systems and results achieved (from case studies) to estimate the likelihood of success if you were to work with them.
In addition, if they’re able to successfully get that pain point content in front of you, there’s a good chance they’ll be able to successfully get your pain point content in front of your customers.
You can also review their general credibility by searching their brand name on social media. This can surface unbiased client reviews, employee brand mentions, and partner comments. You can also look at comments their clients have left on the agency’s own social media posts.
As the employees in the agency are arguably the most significant variable that determine the results the agency can generate, looking at reviews on Glassdoor to gauge general employee satisfaction. You can also view the average employee tenure on LinkedIn. If the average tenure is less than a year or two, you’ll likely work with multiple account managers, which can disrupt the work process as the new manager is onboarded and learns about your company.
Finally, analyze their general marketing messaging and identify their key differentiators. For example, here at Powered By Search, we have a page that describes exactly how we’re unique from other marketing agencies.
If the agency doesn’t have a unique positioning statement, there’s a good chance they’re aiming to target everyone, which also means they don’t have systems designed specifically for B2B SaaS companies with your pain points.
In addition, if the agency can’t uniquely position its own business, it probably won’t effectively position your brand as a unique solution in the market.
2. Talk to their current or past clients
Any solid agency is going to have a “who we’ve worked with” section on their site for you to identify their clients.
So our recommendation for this step is to look at their “who we’ve worked with” section, and reach out to their clients. See if they’ll hop on a short call with you to learn about what their experience has been like. If they’re happy with the agency, they’re likely to want to support them and will often be happy to talk with you.
Alternatively, if they didn’t have a good experience with the agency, they may also be willing to share that. And that’s useful information to know, too.
Note: There are certain engagements that don’t work out for reasons outside of an agency’s control, so if you see or hear a sub-par review or two, take them seriously — but perhaps also take them within the context of the rest of what you can see about them in your research. In fact, if there aren’t any negative reviews, it might be a sign that they don’t have that much experience.
3. Speak with the agency
We think you can learn a lot about an agency from their sales process. Like the other areas of their business, if it’s tight and structured, that’s likely a reflection of the attention to detail that they bring to their client engagements. If it’s loosey-goosey, that might be a red flag.
When you speak with their internal team members, it’s also useful to gauge their active listening skills. For example, when you describe the problems you’ve been facing in an active marketing campaign — the ones you’re hoping they can help solve — are they actively framing that problem back to you and explaining potential solutions? (And later, do those show up in their proposals?)
The agencies that are most likely to meet your marketing needs are the ones who handle their sales process with care and an intention to deeply understand your company’s problems and goals.
4. Review their proposal
A final distinct advantage of evaluating agencies versus individual in-house hires is that they deliver actual plans — in the form of proposals — for meeting your marketing goals. Whereas it is very rare for an interviewee to come in with a full-on marketing plan.
The following are elements we recommend taking into account when reviewing agency proposals:
- Does it reflect the problems and goals you discussed? (ie. how well were they listening?)
- Are the objectives, KPIs, and marketing channels through which they’ll deliver clearly stated?
- Are there clear descriptions of how you’ll work together?
- Are their incentives aligned with yours? (ie. do their objectives connect to ROI and your bottom line?)
This ability to see a detailed path forward before you hire someone is invaluable when it comes to evaluating whether or not a marketing hire will take you in the direction you want to go.
How to get the most value from an agency partnership
If you’ve gone through the process above to evaluate and select your agency partner, you should have a successful relationship. If you’re not satisfied, it might be due to your approach to the agency partnership.
A few of the most common mistakes we see clients make when hiring a marketing agency that can cause an agency-client relationship to fall apart include:
- Short term thinking: Great long-term marketing results, especially content marketing and SEO, don’t happen overnight. While it’s important to have some accountability metrics, give them space to create and execute long-term marketing plan that will produce compounding results.
- Micromanaging: Once you’ve laid out expectations at the beginning of the engagement and you’re aligned on the vision, let the agency implement their systems and processes without interference. As long as they’re hitting numbers, there’s no need to micromanage.
- Overstepping: You hired the agency to execute for you, so don’t try to do the work for them. For example, if you hired the agency to manage an ad account, don’t log into that account and start making changes. If you do, it could negatively impact the strategy they’ve already implemented.
- Under communicating: While you don’t need to constantly message and call your agency partners regarding minor details, it’s important to remain aligned on the main marketing strategy and ensure the agency has the resources they need to succeed.
Therefore, the principles we emphasize to clients to ensure the partnership is mutually beneficial include:
- Over-communicate: It’s a partnership and agencies need your input on product updates/feature releases, customer pain points, and other internal news. Your agency partner also needs to know what the company’s goals are so that we can adjust our strategy to hit those numbers. Alternatively, if you’re dissatisfied, speak up immediately to course correct and get back on track.
- Collaborate: Be sure to show up to meetings prepared with required materials to keep the ball moving forward.
- Trust, with accountability: We outline goals with our clients, lay out milestones and then report on each of those milestones. As long as the agency continues to deliver on the agreed-upon results, you should trust their judgment (but always be active in asking questions and sharing your input).
Take the next step in the hiring process now
When business owners and senior marketing leaders are debating whether to invest in an agency or add another in-house employee to their marketing department, there are many considerations worth taking into account.
But typically, trusting who they hire and feeling a sense of confidence that they can deliver — based on their past experience — is the core of what companies making this decision care about most.
From our standpoint, the agency route provides the most data for evaluation when weighing candidates against each other, and is often the safest route to finding the best party for the job.
Especially going into 2024, if you’re operating with a reduced budget and need expert talent immediately to hit your goals, hiring an agency that can be quickly onboarded and provide access to a range of talented experts may be the best option.
At Powered By Search, we offer these resources to agencies and have proven blueprints that help B2B SaaS companies see higher returns on their marketing investments.
You can use the criteria outlined above to evaluate our own agency, and if it makes sense, you can request a free marketing plan from us to identify key growth opportunities.
What you should do now
Whenever you’re ready…here are 4 ways we can help you grow your B2B software or technology business:
- Claim your Free Marketing Plan. If you’d like to work with us to turn your website into your best demo and trial acquisition platform, claim your FREE Marketing Plan. One of our growth experts will understand your current demand generation situation, and then suggest practical digital marketing strategies to hit your pipeline targets with certainty and predictability.
- If you’d like to learn the exact demand strategies we use for free, go to our blog or visit our resources section, where you can download guides, calculators, and templates we use for our most successful clients.
- If you’d like to work with other experts on our team or learn why we have off the charts team member satisfaction score, then see our Careers page.
- If you know another marketer who’d enjoy reading this page, share it with them via email, Linkedin, Twitter, or Facebook.