To Grow Your Business, Ditch Long-Term Contracts

My decision to move away from year-to-year contracts was rooted in intuition at the time, but these are the proof points to back up what I perceived on...

Photo: Erik Huberman, CEO of Hawke Media; Source: Courtesy Photo
Photo: Erik Huberman, CEO of Hawke Media; Source: Courtesy Photo

You’re probably thinking to yourself, “Is this a joke?”

I get it. Conventional business wisdom says “Lock clients in for life.” However, from the day I launched my business, I’ve operated on a month-by-month payment system with our clients — and I’ve never regretted it.

I came from the brand side, so I wanted to create something that achieved a happy medium between client and agency. I didn’t want it to be set up like a standard agency where clients often sense a lack of transparency. However, I did want to provide an alternative to companies hiring marketing in-house.

My decision to move away from year-to-year contracts was rooted in intuition at the time, but these are the proof points to back up what I perceived on a deeper level.


1. You have finite flexibility

Long-term contracts are based on pre-set tactics to achieve pre-set outcomes. What if there is a need to change those tactics or even the long-term goals? We don’t want clients to have to commit to us because we know businesses, strategies and the overall marketing landscape are changing constantly.

If we try Facebook advertisements, for instance, and it quickly becomes apparent that it’s not the best avenue, I don’t want to feel pigeonholed into continuing with those tactics for the rest of the year. I want to be able to scratch them and reframe the contract.


2. Long-term strategies don’t fit forever

When legacy companies ask about our plan or media strategy, we say, “We’re going to try out a few things in the first three months, test out of 100 different strategies and see what works the best.”

We don’t want to invest in long, arduous creative planning that ends up making no sense and doesn’t provide room for flexibility. We recently had a client we thought would be a great candidate for a targeted social ad, but because that didn’t work out so well, we quickly changed our strategy.

A long-term contract would have, at best, reduced our flexibility. At worst, it would have required us to secure new approvals on the abridged plan, reroute through leadership and legal and ultimately add months of superfluous time while we revised our approach.


3. There’s no need to rush

To my previous point, jumping into a yearly contract is like jumping into a long-term relationship before you’re ready. It’s like saying after a first date, “Let’s get married!” — which only sets both parties up for failure.

A month-by-month plan, on the other hand, allows time for the client and agency to build trust in one another and confidence in the direction they’re headed together. You and your client can adjust your relationship or plan as needed. It’s a less stressful process on both ends.


4. A signature means zero incentives

An agency isn’t as incentivized to perform once a long-term contract is signed. It’s important to question contracts with your company. In one particular instance, I challenged a contract with a B2B marketing company that promised it would get us on all sorts of marketing organization sites so marketers would see us.

I ran with it even though it was a year-to-year contract. What the agency didn’t know is that I am well-versed in digital marketing. When I started monitoring what the agency was doing, I realized that the platforms it was running on were completely unnecessary and, worse, were costing all of us thousands of dollars. Needless to say, that agency didn’t last long.


5. With no certification program, there’s no accountability

Ninety-five percent of marketing agencies are complete nonsense. We want to create a test or certification program for marketers to protect companies from giving their money to those who aren’t qualified. Month-to-month contracts are another clear protection against this sort of fraud because the expectation is obvious: you want to see results for what you’re paying for.


A month-to-month contract may not always be feasible, but the shorter the contract timeframe, the better. This allows for more flexibility on each end, which means your clients can give feedback up to the last second without throwing off your approvals schedule. This also gives you the freedom to pivot based on the ongoing influx of information.


This article has been edited and condensed.

Erik Huberman is the CEO of Hawke Media, a digital marketing agency that focuses on being a full outsourced marketing team for ecommerce brands of all sizes. Connect with @ErikHuberman on Twitter.


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