In many businesses and operations contractors often get lumped together in one big budget bucket. This is a common uphill battle for us, and it seems to be the case with our fellow marketing and relations agencies as well. We've all heard it from at least one client, "You're our most expensive contractor".

So what's the key to escaping the contractor bucket and carving out a designated place in clients' operations budgets?

The Problem

First, we have to understand the problem. The problem with contractors getting lumped together in operations budgets is that not all contractor positions are created equal. Many roles commonly filled by contractors such as customer care, IT or administrative are at a significantly lower level than marketing and relations, and are often outsourced cheaper overseas. Agencies such as ours are contracted at a chief, presidential or vice presidential role for the majority of the retainers we take on. So when you look at the combined operational budget for these lower level positions and then for marketing and relations, the numbers are, of course, dramatically different. While an in-house chief or president might be seen as a pinnacle necessity to the operations' success, contractors might be seen as replaceable or temporary support. It is in and of itself, a fine line to walk; as we are both constantly costly contractors but also a pinnacle necessity to our clients' success.

The Value

Next, we have to make this extremely clear distinction; the true value of contracting an outside marketing and relations agency versus hiring an in-house team. With an agency, there's the invaluable benefit of outside perspective. Not having a team that is mired in internal office politics, stresses and pressures can produce its own benefits and a significantly higher level of production. Marketing and relations efforts specifically benefit from this dynamic, as it creates a more stable democracy for major strategic brand and communications decisions versus a CEO autocracy. All too often, we see internal marketing and relations teams afraid to go against the grain or speak up to their heads at the table. It's a night and day difference from the dynamic created when contracting an outside agency. Aside from the value of perspective, the monetary value of contracting an agency versus hiring an inside team is also quite an eye opener. Of course all teams are different sizes and the roles may vary slightly, but over the decades we've worked with enough marketing and relations teams to know the usual positions. Let's look at the annual costs for the same team in salaries versus an agency retainer.