Solved: Hiring an Agency When Clueless? (Data Inside)

Hi there,

Thanks for reaching out!

It's a common dilemma, and you're right to be cautious. Throwing money at an agency without knowing how to vet them is a recipe for disappointment. I'm happy to give you some initial thoughts and guidance on how to approach this. The key isn't to become an advertising expert overnight, but to learn how to spot genuine expertise and ask the right questions. We can break this down into a few areas: judging their track record, testing their strategy in real-time, understanding the real cost, and setting realistic expectations.

We'll need to look at... The Problem With "Hiring an Agency"

The first mistake most businesses make is thinking their problem is "I need to run ads." That's the wrong frame. Your real problem is likely "I need to find a predictable way to get more of my ideal customers," and ads are just one possible tool to solve that. An agency that immediately jumps into talking about platforms, clicks, and impressions without first digging deep into your business is a massive red flag. They're a tool-seller, not a problem-solver.

You shouldn't hire a 'paid ad agency'. You should hire a business partner who understands that their job is to deliver a return on your investment, not just to manage a software dashboard. Their success should be tied to your success. This means you need to look for a very different set of signals than what most people look for.

The core of your uncertainty—not being able to assess their proposed strategies—is exactly what separates good agencies from bad ones. A good agency will educate you. Their proposal won't be a black box of jargon; it will be a clear, logical plan that makes sense to you as a business owner. They should be able to explain the *why* behind every part of their strategy, from the choice of platform to the target audience and the message.

Tbh, in paid advertising, you can't really promise anything as it's impossible to predict how exactly the ads will perform. So if an agency comes in promising you a "guaranteed 5x ROAS," you should be very sceptical. An expert will talk about a methodical testing process, realistic benchmarks based on past experience, and a plan for optimising and scaling over time. Their confidence should come from their process, not from empty promises.

I'd say you... Must Vet Their Track Record Like an Auditor

This is where most people go wrong. They glance at a logo on an agency's website and take it as gospel. You need to go deeper. A good case study isn't a fluffy story; it's a detailed breakdown of a business problem, the strategy used to solve it, and the measured results.

Here’s what to look for:

• Niche Relevance: Have they worked with businesses similar to yours? Not just in the same industry, but with a similar business model, price point, or sales cycle. For example, we've worked with a wide range of clients, from a B2B SaaS that needed to reduce its £100 Cost Per Acquisition (we got it to £7) to an eCommerce course seller where we generated $115k in revenue in just six weeks. If an agency shows you a case study for a £10 eCommerce product when you sell a £10,000 B2B service, that experience is almost irelevant.
• Real Numbers: Look for specific metrics. Vague claims like "increased brand awareness" are worthless. You want to see things like: "Achieved a 618% ROAS for a prize draw company," "Drove 5,082 software trials at a $7 cost per trial," or "Reduced cost per lead by 84% for an environmental controls company." These are concrete outcomes.
• Context is Everything: A 10x ROAS sounds amazing, but what was the starting point? What was the ad spend? A 10x return on £100 spend is very different from a 3x return on £50,000 spend. The latter is far more difficult and impressive. A good case study will provide this context. It should walk you through the entire strategy.

Don't be afraid to ask questions about their case studies on the intro call. "Can you walk me through the thinking behind the campaign for that B2B software client?" "What were the biggest challenges you faced with the campaign for the cleaning products company that got a 633% return?" Their ability to answer these questions confidently and in detail will tell you if they were actually responsible for the results or just borrowing them for their website.

Finally, a word on reviews. Reviews are helpful, but case studies are better. A review tells you if a client was happy. A case study tells you *why* they were happy and *what* the agency actually did to achieve the results. And honestly, if you've seen their detailed case studies, gotten a free strategy session, and still feel the need to ask for references to call their other clients, it's probably not a good fit. It signals a deep-seated lack of trust that will likely plague the relationship from the start. For us, that's often a red flag that we're not the right partner for that business.

You probably should... Calculate Your Breakeven Point Before Spending a Penny

The question of "will the ROI justify the cost?" is impossible to answer without knowing what a customer is actually worth to you. This is the single most important piece of data you need, and most businesses don't have it calculated properly. Without it, you're flying blind. You can't judge an agency's performance if you dont know what an acceptable Cost Per Acquisition (CPA) is.

This is where we need to calculate your Customer Lifetime Value (LTV). It's simpler than it sounds and it will change how you think about advertising costs entirely.

1. Average Revenue Per Account (ARPA): What does a typical customer pay you each month?
2. Gross Margin %: What is your profit margin on that revenue? (i.e., after deducting the cost of goods or services sold).
3. Monthly Churn Rate: What percentage of your customers do you lose each month?

The formula is: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Let's take a simple SaaS example. If your ARPA is £200, your Gross Margin is 80%, and your monthly churn is 5%:

LTV = (£200 * 0.80) / 0.05 = £160 / 0.05 = £3,200.

Each customer is worth £3,200 in gross margin to you. A healthy business model often aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means you can afford to spend up to £3,200 / 3 = ~£1,067 to acquire a single new customer. Suddenly, a £50 lead from a highly-targeted LinkedIn campaign doesnt seem so expensive, does it?

Here's a simple calculator you can use to play with your own numbers. This will arm you with the data you need before you even speak to an agency.

You'll need... An Offer That Sells Itself

This is probably the biggest reason campaigns fail, and it's something many agencies won't tell you because they can't fix it. You can have the best ads in the world, but if your offer is weak, you're just paying to advertise something nobody wants. Your lack of expertise in ads is secondary to this. You are an expert in your business, so you need to focus here first.

The most common failure point is the "Request a Demo" button. This is a high-friction, low-value Call to Action. It asks a busy person to give up their time to be sold to. It's arrogant.

A great offer delivers a moment of undeniable value for free, making the prospect sell themselves on your solution. It solves a small, real problem to earn the right to solve the big one.

• For a SaaS business: A free trial or a freemium plan (with no credit card required) is the gold standard. Let the product do the selling. One campaign we worked on for a B2B SaaS got 1,535 trials from Meta ads by leading with a generous free plan.
• For a service business: You need to "productise" your expertise. Don't sell "consulting." Sell a "Free SEO Audit," a "Data Health Check," or a "Predictable Growth Plan."

We do this ourselves. We don't sell "agency services." We offer a free, 20-minute strategy session where we audit a company's failing ad campaigns and give them actionable advice they can implement immediately. By the end of that call, they have recieved genuine value and have a very clear idea of our expertise. They know if they want to work with us, and we know if we can help them. There's no hard sell because the value has already been demonstrated.

An agency that is worth hiring will scrutinise your offer. They should challenge you on it. If they just accept your "Request a Demo" page without question and say they can "drive traffic to it," they are not thinking strategically. They are a traffic vendor, and you should avoid them.

The flowchart below shows how this thinking should be structured. You start with the customer's pain, not your solution.

This is the main advice I have for you:

So, how do you take all this and turn it into an actionable plan? It's a screening process. Here is a summary of the steps you should take when evaluating any potential agency partner.

Ultimately, hiring an agency is an investment, and you're right to treat it as such. By following this framework, you shift the dynamic. You're no longer a passive buyer hoping for the best; you're an informed stakeholder actively selecting a strategic partner. This process will quickly seperate the experts from the salespeople.

Your lack of advertising expertise isn't the handicap you think it is. Your business expertise is your greatest asset. A great agency will recognise that and work with you to translate your deep understanding of your customers into a powerful advertising strategy.

If you'd like to see how this works in practice, we could schedule a free, no-obligation consultation. We can take a look at your business, your goals, and give you some straight-forward advice on what we would do. It would give you a taste of the expertise you should expect and, at the very least, provide you with some valuable insights you can use, whether you decide to work with us or not.

Regards,

Team @ Lukas Holschuh