Think Twice before Switching to a Local Agency: Why Bigger is Sometimes Better

As a business owner or marketing manager, you may be considering switching to a smaller local agency to handle your marketing needs. Smaller agencies can seem attractive, especially when they claim to offer lower prices than larger agencies. You may also believe that a smaller agency is more dedicated to your needs, more flexible, and more likely to provide better service. However, this often isn’t the case. So before you make the switch, it’s important to consider these six potential downsides and hidden costs of working with a small agency.

6 Potential Downsides of Working with a Local Agency

1. Limited Resources

One of the main disadvantages of working with a smaller local agency is the likelihood of encountering a limited resources situation. Smaller agencies may not have the same level of expertise or access to advanced technology as larger agencies. They may also have a smaller staff (the headcount typically ranges from 5-20 employees), which could lead to longer turnaround times and reduced responsiveness.

These organizations also tend to expect their team members to wear a lot of different hats, meaning they may not be able to specialize in their craft or provide individualized attention to your campaigns. This can be particularly problematic if you have a large or complex project that requires a team with a wide range of skills and expertise.

2. Sub-optimal Capabilities

Another downside of working with a small agency is that the agency’s capabilities may be limited. For example, a small agency could be strong in one area, such as branding or social media management, but may not have experience with other marketing channels, such as paid search advertising, web design, media buys, streaming media or email marketing. This can result in a fragmented approach to your marketing strategy and lead to inconsistent results.

You also may end up having to coordinate projects between several agencies and vendors, which can be time-consuming and complex. Not to mention that it can create massive gaps in continuity when it comes to your messaging and brand. This also defeats the purpose of working with an agency in the first place; your time is better spent running your business than coordinating marketing vendors.

3. Lack of Industry Experience

The economics of being a smaller agency mean that these businesses may be driven to work with anyone in their backyard willing to pay for their services. This means that their client roster could comprise anything from restaurants to frozen yogurt shops to local real estate agents and everything in between. While this approach may work for some businesses, it can prevent them from hyper-specializing in an industry like home services and building up specialized knowledge that really gets results.

By spreading themselves out with too few employees across too many industries, smaller agencies may miss out on the opportunity to develop a deep understanding of a particular market and create more effective marketing strategies. This lack of specialization could ultimately hinder their ability to deliver the best possible results for their clients.

4. Limited Stability

Small agencies may also be more vulnerable to fluctuations in the market or changes in leadership. They may not have the same level of financial stability or established relationships with vendors and suppliers as larger agencies. This can be a significant concern, especially if you are looking for a long-term partner to handle your marketing needs. You want to ensure that the agency you choose has the resources and stability to support your business for years to come.

5. Higher Costs in the Long Run

While a small agency may seem more affordable in the short term, the aforementioned limited capabilities and resources could end up costing you more in the long run. While you may enjoy lower prices from a smaller service provider, you may find that though you’re paying less, you’re getting less as well. For example, you may end up having to hire multiple agencies or vendors to handle different aspects of your marketing strategy, which can be expensive and time-consuming. In contrast, a larger agency can provide a one-stop-shop for all your marketing needs, which can be more cost-effective and efficient in the long run.

6. Are they Actually Even Local?

Smaller local agencies also have a tendency to outsource, sometimes to offshore workers or other times to subcontractors or vendors. They also may have a majority of employees residing stateside in different cities across the nation. In either case, these agencies are no longer actually local.

An Exception to Every Rule

Of course, there are exceptions to every rule. There are certainly smaller agencies that are highly skilled, experienced, and reliable. However, before you make the switch, it’s important to do your due diligence and carefully consider the potential risks and benefits. In many cases, working with a larger agency may be the smarter choice. These organizations tend to offer more resources, expertise, and stability, which can translate into better service and more effective marketing solutions.

Before making a decision, consider the long-term costs and benefits of working with a smaller agency versus a larger one. At Mediagistic, we have a proven track record of delivering end-to-end marketing and advertising services to local, regional, and national clients. Whether you’re looking to boost sales, increase brand awareness, or build your online presence, we can help you get there.

Luke Steinkopf is Mediagistic’s Director of Sales. He works with local home services businesses across the country and provides solutions to help them achieve their growth goals. Connect with him on Linkedin.

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