Pricing
Consultant vs. Consultancy vs. Agency:
Aligning Needs,
Practicality & Productivity
The marketing services industry has gone through seismic change the past five years, fueled by data and martech, incursions by the likes of Facebook, Amazon and Google, consolidation, and evolving social media landscape.
All of which just adds to consultant vs. consultancy vs. agency confusion — particularly for companies that don’t have colossal marketing budgets.
Peel it back, however, and much of the determining criteria is same as it ever was:
Where will you find the best talent? Because, at the end of the day, that’s what you’re buying.
Specialization or generalization: Is your priority expertise a la carte or a “one-stop shop?”
Time horizon: What are you willing/able to commit to?
And, of course, fees. What are you willing/able to pay to get exactly what you need … and then some?
“At the end of the day, you’re ‘buying’ talent.”
What matters: who will work directly with you?
So here’s our view of how it breaks down from a cost perspective:
Engaging a traditional agency typically means paying for resources, even if you don’t use them. Yes, there is a benefit to having these resources “at the ready,” and the agency culture does foster the sharing of expertise among the various functions within. But the stark reality is that today’s agency business model virtually requires this “fat” — much like insurance companies depend on healthier younger people to make insuring older folks viable. Truth is, for brands that require coordination on a national and/or international scale, engaging agencies within the larger holding companies is often a default option purely from a logistical and economies of scale standpoint.
Consultants — typically sole proprietors — can be good, cost-effective options for certain projects, but limited in what they can take on — particularly if it stretches beyond their core competency.
Which brings us to consultancies. There’s a reason they’re growing at a healthy clip and making agency executives very nervous. The super large consultancies, like Accenture, Deloitte and PWC, are laying claim to the coveted digitally- and data-driven thought leadership at the enterprise level — putting them in the driver’s seat. And smaller consultancies such as LandThePlane, which are essentially cooperatives of consultants, are offering companies access to specialized, senior-level talent which can be engaged on an “as needed” basis.
“We’re not a taxi cab, so we don’t charge like one.”
It’s all about being fair and flexible.
With a consultancy, the same executive-level talent that would be billed at $250-$500 an hour at an established agency, can typically be had for 50-60% less. Much lower overhead, the absence of layers of “bureaucracy,” and resource flexibility make this possible.
That said, we’re not a taxi cab, so we don’t charge like one. Hourly “rate cards” devalue intellectual property and — let’s face it — are dubious unless you’re willing to be in the same room clocking how much time the people who are working on your account are logging in.
Which is why we create a project estimate, based on the scope of work, the required resources, and fair value before engaging. This helps provide better forecasting, and a more transparent relationship. Sure, you can calculate an hourly rate equivalent if you’d like — and it will be more attractive than many other alternatives available. That’s a reasonable way to compare, if you must.
One last thing: trust, chemistry, approachability, and responsiveness count for a LOT. So going back to the original contention that talent is everything, be sure to know who you will be working with directly — whether it’s one person or many. Because that, ultimately, is where your decision lies.