Over the last 3 years, we’ve met with a lot of prospective clients. And occasionally, we get owners who ask a very direct question: “By hiring you, what can you guarantee that I will get in terms of ROI?” On the surface, it seems like a reasonable question for a business owner to ask. After all, if you run a company, wouldn’t you want to know what the value is of hiring someone externally?  

The problem: It’s an approach fraught with pitfalls and unrealistic expectations from the start. It’s also not something any reputable agency (being honest) could answer just coming in from the cold in terms of your business.

Let’s dig into this a bit more.

ROI Guarantees: An Unrealistic Expectation

At Marketing Nice Guys, we certainly understand that businesses want to ensure they’re getting value for their investment. However, the idea of guaranteeing a specific ROI before we even begin to work on an account is a complicated and often misleading proposition. There are several key reasons why it may be nearly impossible to provide an upfront ROI guarantee:

• • Individual Business Variables: Every small business is unique. Your product or service offerings, customer base, and competitive landscape are all specific to your company. These variables have a significant impact on ROI, making blanket guarantees not only unrealistic but often unethical.
  • Market Demand: A critical factor in determining ROI is market demand. Even if an agency can target the right individuals effectively, and move them down the funnel, selling still heavily relies on the market’s demand for your product or service. This aspect is beyond the agency’s control in the immediate term. Can the agency help you create that demand over time? For sure. But we’ve seen that those who ask the ROI-guarantee question in the first place are often entrepreneurs and business owners who can be, let’s say, more impatient. Demand creation takes time and if you don’t have the patience to see out your marketing efforts over a longer period, you will often be simply disappointed.
  • Competitive Advantage: The uniqueness of your products and services can significantly impact your ROI. No marketing agency, no matter how experienced, can accurately predict how your unique offerings will perform in the market, especially if you’ve produced those without taking into account what the market really needs.
  • Your Current Narrative: Every company that’s been launched has a certain existing “narrative” among prospective audiences. In other words, a company may be currently viewed favorably or unfavorably or customers simply may not know what the company stands for/understand its relevance to them. A marketing agency can help with this, but if you think about a narrative, it takes time to take hold, and turning that into a positive ROI overnight is something quite unrealistic.

One caveat to the ROI guarantee: industry experience. Occasionally, you might find an agency that will make a guarantee to prospective businesses if they’ve worked extensively in a particular industry. Even then, though, what works for one company, may not necessarily work for another for the reasons stated above. And even adjacent industry experience can be misleading. For example, we do a lot of work in the home services/home improvement sector. Even within the different categories of businesses in that sector alone, existing demand for services can vary wildly, and depend on seasonality or region.

Why We Don’t Guarantee ROI

Let’s be clear: We would love to guarantee ROI to prospective clients and be able to see the future. The problem is, it’s quite simply dishonest for us (or an agency) to do so without digging into more of the current operations of the business and getting a fuller picture of what’s going on.

Here’s a scenario that happens way too often. An agency will make a guarantee to win the business, not live up to that guarantee and the small business ends up wasting money and time – not to mention getting frustrated by the fact that they hired a company that can’t live up to the guarantees.

What About Agencies Taking a Percentage of Profits Rather Than Standard Retainer Fees?

We’ve had a number of companies approach us with such propositions but we’ve typically declined. Why? It wasn’t that we didn’t think we could help the company. In a lot of cases, we felt we could’ve. But to us, it’s akin to asking people to do work for you and take all the risk, while you as a business don’t take any.  

And again, we understand why companies ask this question. And some agencies might even bite on this if they truly believe they can drive a lot more revenue than what they can get paid. But as stated earlier, there’s also no guarantee that the agency you hire in this capacity will perform to the level where ROI gets demonstrated. Because there are too many factors that can affect how well a business performs.  

A Better Question: Seeking Recommendations and Audits

So, if asking for an upfront ROI guarantee isn’t the right approach, what’s a better question? Instead of seeking guarantees, a more productive and insightful inquiry is to ask/pay for an agency you’re interested in to conduct a comprehensive audit of your current operations and marketing approaches. Here’s why this approach is not only more reasonable but also more beneficial:

• • In-Depth Analysis: An audit allows the agency to thoroughly analyze your current marketing strategies, processes, and campaigns. This analysis will identify strengths, weaknesses, and areas for improvement. This is something you can use as a business owner regardless of whether you end up hiring the agency.
  • Tailored Recommendations: Following the audit, the agency can provide you with a set of tailored recommendations and strategies based on your specific business needs and goals. These recommendations are practical and actionable, enabling you to enhance your marketing efforts effectively.
  • Realistic Expectations: Instead of promising unattainable ROI figures, the agency will work with you to set realistic expectations based on the audit findings and the proposed improvements. This approach promotes a more transparent and accountable relationship between your business and the agency.
  • Paying Upfront for Only a Limited Engagement: It’s a great way to try out a new agency without making a longer-term commitment. Hopefully, you can gain valuable insights from the audit and then decide what you’d like to do long term.
  • Better Understand What a Working Relationship Would Be Like: An audit and ongoing collaboration with the agency can create an environment where you as a business owner can see how well both parties can work together to constantly improve marketing strategies and adapt to changing market conditions.

Conclusion

Rather than expecting a marketing agency to have all the answers upfront, businesses should view agencies as experts who can guide them to success. It’s also important to remember that marketing is not a one-time effort with a fixed outcome. It’s an ongoing process that requires flexibility, adaptation, and constant refinement. A valuable marketing agency will be committed to helping you achieve your business goals by offering strategies that evolve with your needs.

While we can’t guarantee ROI, we can promise to work diligently to help you maximize your marketing efforts and drive your business toward success. Remember, the journey to exceptional ROI begins with an open, honest dialogue, a commitment to improvement, and a partnership with a marketing agency that shares your vision for growth. If you’re ready to take the next step, don’t hesitate to contact us for a free consultation.