You’re paying for a service you’re not happy with, and it’s frustrating.
This forces you to terminate the relationship with the service provider. You start another process of looking for an alternative marketing agency.
Or you become so pessimistic about marketing agencies that you stop hiring one.
My goal in this article is to demonstrate why small businesses fire digital marketing agencies. And explore the telltale signs of a bad partnership and how to prevent the breakup.
A strong client-agency relationship is based on mutual transparency, communication, and shared goals.
GroXcelent is a transparent SME growth agency that is laser-focused on what small business owners care about: tangible business results.
Key Takeaways
- SMEs often part ways with their marketing agencies due to unmet expectations, lack of clear communication, and disappointing results.
- To avoid this, agencies should prioritize setting realistic goals, maintaining open lines of communication, and consistently delivering measurable outcomes.
- Building trust and demonstrating a deep understanding of the client’s business can also help sustain a long-term partnership.
What Are The Top Reasons for Agency Churn?
TL;DR: Unmet expectations and a lack of partnership are the leading causes of agency churn.
Just like any business, outsourced companies also lose customers. And the hardest thing is acquiring new clients, so it’s a disappointing experience when the churn rate is high.
The University of the Sunshine Coast, Australia, reports that:
| 70% of small and medium-sized businesses terminate their contracts with their digital marketing service provider within 12 months. And one-third of SMEs end up in a conflict with their marketing partner. |
In another study in the U.S.,67% of small businesses churn in the first 6 months or less.
I want to boil down the main reasons for agency churn to a few key areas of friction.
Here are the causes small businesses leave digital marketing agencies:
Unmet Expectations
Your service provider over-promised and under-delivered, selling “leads” but not “deals.”
Unfulfilled goals harm your small business. They waste SMEs’ limited time and resources on marketing efforts that don’t produce expected results.
As a result, you get frustrated and lose trust in the agency. Ultimately, it hinders your business’s growth and development.
Also, you may struggle to justify continued investment in your marketing strategies if you don’t see results.
Lack of Communication & Transparency
You feel left in the dark. Reports are confusing, and you don’t know what the agency is doing.
Poor communication causes misunderstandings and misaligned goals. This causes frustration between you and the outsourced company.
You lose confidence in the agency’s ability to meet your business objectives. That’s because you don’t get progress updates to know what’s happening.
A lack of trust in the marketing partner strains your relationship and forces you to terminate the partnership.
The “Vendor” Mentality
The marketing agency acts as a service provider instead of a true partner. It fails to understand your business goals and challenges. A vendor operates on a transactional mindset; they are more interested in the financial benefits rather than serving your company’s interests.
According to inTandem, 17% of small businesses abandoned their existing agencies and switched marketing service providers.
The problem is you’re working with a vendor rather than a strategic partner interested in your success.
They’re just focused on completing transactions and fulfilling orders. And they don’t even consider your broader business targets.
As a result, the agency can’t innovate or provide valuable insights to enhance your bottom line. To succeed in a volatile marketing environment, collaborate with marketing agencies that integrate AI SEO with traditional SEO.
That’s because AI search engines like ChatGPT and Google’s Overviews are here to stay.
No Tangible Results:
Your marketing agency focuses on vanity metrics (traffic, clicks) instead of what you care about: revenue and growth.
Surface-level achievements like likes and impressions don’t say much about your real business growth.
Vanity metrics risk investing your time and resources into strategies that don’t drive actual revenue growth. It wastes your tight budget and results in missed opportunities.
Ultimately, you sabotage your business success.
Your agency must track meaningful outcomes, such as conversions. They show the impact of the marketing efforts on your objectives.
Misaligned Goals:
Your digital marketing partner is working towards one thing, and you’re expecting another.
Misaligned outcomes cause communication to break down between you and the service provider. You’re pulling in different directions.
There’s a disconnect between what you want and your agency’s focus. As a result, you don’t use your resources towards desired goals.
This relationship doesn’t last, as you feel the partner isn’t interested in your company.
SMEs end their contracts with marketing agencies due to unfulfilled expectations, a lack of transparency and progress, and mismatched objectives.
What Are the Signs of an Impending Breakup?
TL;DR: Identifying the red flags early can save you time and money.
I have worked with tens of small businesses in my role as an SEO and content strategist in several agencies. So I’m familiar with symptoms of a deteriorating relationship between an agency and a client.
Note these common warning signs that show your relationship with a marketing partner is in big trouble.
Are you constantly questioning what they’re doing? This indicates that the service provider isn’t open about their processes and marketing campaigns. You have no access to KPI dashboards, so you’re in the dark about your business performance.
Are their reports confusing and filled with jargon? Even if you receive marketing data, can you make sense out of it? Can you see the revenue trends and understand your business’s performance? Or it’s just complex and technical information. You can’t tell whether you’re meeting your business goals or not.
Do you feel like you have to chase them for updates? There’s nothing so frustrating as working with a service provider that goes AWOL. They assume you don’t want to know what’s going on, so they keep mum. As a result, you have to pressure them into updating you on their efforts. The digital marketing agency is reactive; they lack a predictable reporting system to keep you updated.
Are they not asking about your sales process or business goals? An agency can’t meet your expectations if it isn’t aware of what you want to achieve. This leads to the misaligned outcomes I mentioned earlier.
If you answered “yes” to any of these questions, it’s a sign that the partnership isn’t working. It’s time to move on and find the right fit for you.
Consider collaborating with GroXcelent, the best alternative for your digital marketing needs.
Here are a few reasons you may decide to work with us.
| Factors to Consider When Choosing a Marketing Agency | GroXcelent | Other Agencies |
| Budgets & Expectations | Aligns business outcomes or expectations with your budget. You get what you have budgeted for. No overpromising of results. | There’s a mismatch between your budget, market position, and outcomes. Overpromise to win your contract. |
| Communication | Regular updates via email, virtual meetings, and communication apps like Slack or Google Workspace chat. Work with a dedicated account manager. | Goes AWOL. No feedback on what’s going on. |
| Results-Focused | Laser-focused on delivering agreed-upon goals or targets. | Unmet expectations. No sign of tangible results. Full of excuses. |
| Customized Strategies | Spends a ton of time understanding your challenges and needs. Consults with you during strategy design to align methods with your goals. | Uses a top-down approach to develop marketing campaigns. This wastes budgets and resources. |
| Transparency | Discusses deliverables and metrics before and during campaigns. Grants you access to SEO and marketing dashboards. Analyst simplifies data and focuses on your revenue indicators. | No idea of the metrics you must track. Data is full of jargon, and it’s not easy to understand. |
The choice is yours: work with a dedicated and transparent partner like GroXcelent or with a vendor.
How To Prevent a Breakup
TL;DR: By taking proactive steps, you can prevent a breakup and build a durable partnership with marketing agencies.
Set clear expectations from the beginning and demand transparency if you want a successful and long-term relationship. Here are a couple of things you should do to foster a robust relationship with an agency:
Set Clear Expectations:
- Before you even hire, define what success looks like in terms of revenue, not just leads. Ensure the agency understands your priorities before a full roll-out of the campaign.
- Be open about your immediate and long-term needs. This allows the outsourced partner to channel your limited resources efficiently to the right marketing activities.
Demand Transparency:
- Insist on regular, easy-to-understand reports that connect marketing to revenue. It lets you monitor your performance and see whether your investment is worth it.
Promote a Partnership Mentality:
- Share your business goals and challenges with your agency and expect them to act like a true partner.
- Give the service provider the freedom to implement new ideas. And believe they’re acting in your best interests.
Focus on the Right Metrics:
- Shift the conversation to ROI, customer acquisition cost, and revenue growth. These are the key performance indicators that matter to your small business.
- Ignore vanity metrics such as comments and likes. They don’t have an impact on your business growth, as they are superficial statistics.
Small businesses can foster a win-win relationship with their marketing agencies by being open about their business goals and priorities and insisting on easy-to-understand sales dashboards and regular feedback.
FAQs on Why SMEs Fire Marketing Agencies
| Why should you fire your marketing agency today? You can end the contract with your agency if it doesn’t produce tangible business results, provide you with feedback, is not transparent, or operates as a vendor. |
| What are the red flags of a bad client-agency relationship? The agency isn’t interested in discussing your goals, focuses on vanity metrics, sends you hard-to-understand reports, and doesn’t communicate its processes. |
| How do you fire your marketing agency? Talk to a lawyer. However, review the duration of the agreement and your roles before you take this route. Consider whether it’s financially worth it to cancel the contract. |
| How can you prevent the breakup? Insist on transparency and realistic goals and deliverables before you sign the agreement. Ask for easy-to-understand reports tied to your revenue goals. Cultivate a partnership mentality. |
Conclusion
You can have a stable relationship with an agency that benefits your SMB. It’s based on shared goals, clear communication, and a mutual focus on tangible business results.
GroXcelent is an SME Growth Agency for ambitious startups and growing small and medium-sized businesses. We’re obsessed over three things: your business, customers, and revenue. Our team of marketing professionals connects your entire marketing, from SEO to social media, to maximize your visibility and conversions.
If you want a growth partner passionate about your business success, get your free SEO audit to find high-impact opportunities.
