Consultant vs. agency – what’s the difference?
Since launching my own business in 2015, I made a conscious decision to stay an independent consultant, as opposed to the general option of most PR professionals to grow to become an agency. My reasons for this decision are many. The main one being that as a professional who spent most of my career as an agency client, I found the service to be lacking and the operational process confusing – to say nothing of the elevated costs.
This blog isn’t to disparage the agency model as I do believe it has a place in today’s landscape, it is just to provide small businesses with an understanding of the difference between the two models. I have found so much confusion from potential clients on why they should hire a consultant when an agency comes in with all the “bells and whistles.” I totally get it; agencies can bring the fabulous. But…is that really what you need?
Agencies certainly bring great team bench strength with in-house account managers, creative services and digital experts and ease of access to these persons can’t be discounted. But remember, you’re paying for that overhead whether you require it or not and consultants work with a network of creatives, photographers, content writers, etc. that can be utilized for any project when required.
When deciding on whether to hire an agency or consultant, here are some criteria that you should consider.
Strategy vs. implementation – Traditionally, strategy development and recommendations are provided by consultants while implementation of those recommendations is completed by agencies. Those lines have blurred over the years as many consultants will create and implement tactical plans as part of their services.
Agencies are also given “agency” to act on behalf of their client to make specific project decisions while consultants will immerse themselves in your business and work with your leadership and staff on longer-term projects and initiatives.
Subject matter expertise – Most consultants focus on specific sectors or subject matter for their service offerings. For example, I work with clients in the tourism and cultural sectors as that is where my expertise lays and where I have extensive contacts. But I have colleagues that focus on the culinary or educational sectors, that provide media training or event planning as that is what they are experienced in and passionate about.
Agencies will often work with various types and sizes of businesses across all sectors, services and geographic areas. This works well for larger multi-national organizations as agency contacts are often global in reach. Often times, it can be overwhelming and frustrating for small businesses to get the best service when larger clients take the bulk of resources.
Billing & fees – Most traditional-style agencies bill based on time, which is often broken into 15-minute increments much like a law firm. This means that every email, phone call and all meetings are billable time. There is also usually a “project management” or “agency fee” on invoices to cover some of the administrative overhead of running an agency.
While some consultants still have hourly rates, many have moved to a project-based fee structure. This is how I run my consultancy. Having spent my career in the non-profit sector, I understand that receiving large, unplanned invoices can quickly derail an already tight budget.
To better serve my clients, I bill based on project scope. This means a project budget is created at the planning stage which clearly outlines the strategy and action items, timeline and billing dates. This provides stability to clients as they know exactly what their invoice will be each month and any additional costs required to complete the project (ie: designers, photographers, etc.) are pre-approved by the client.
Service – This area is, and always has been the most important component for me when working with any external parties. As I mentioned above, I spent most of my career as an agency client. Marketing agencies, digital agencies, PR agencies… I have worked with them all to varying levels of success. Maybe it’s because I do this for a living but I never found a full-service agency that could provide the service levels I expect. In fairness, this is due to the large number of clients that agencies handle on an on-going basis as there just isn’t the time and resources to properly attend to each one of them.
This is partly why I choose to stay as an independent consultant. I take on clients that best reflect my interests, those that share my values and projects that provide me with great personal growth and satisfaction. This means that I don’t have a massive client roster at any given time, as I can’t possibly serve them all. I choose to keep a handful of consistent clients that I work with on long-term contracts and supplement those with clients requiring shorter project assistance.
Making the decision to hire external personnel to help grow your business is one not taken lightly and I hope these tips can help you decide whether an agency or a consultant best suits your needs. If you have questions or need assistance, please connect with me. I am happy to help.
