For years we’ve sold month-to-month at MWI, and we’ve made a selling point out of it. We’re not going to lock you into a contract you regret. If we stop earning your business, you can leave. It keeps us on our toes.
I never thought that hard about it. I assumed other agencies required long-term agreements because long-term agreements were better for them. Having now signed a few, I’m starting to wonder if they’re better for everyone.
Six to twelve month retainers are the standard structure in B2B digital marketing, and for services like SEO the six-month floor exists because that’s roughly how long it takes before anything meaningful shows up. We’ve been running the unusual model and calling it a virtue.
However, when an agency knows a client can leave in thirty days, it can only justify investments it can recoup in about thirty days. That’s not cynicism, it’s math. If I put a senior strategist on a client’s account for two weeks of unbilled research and they leave in month two, I’ve eaten the cost. Do that a few times and the agency stops doing it. Not because anyone decided to stop, but because the people making resourcing decisions learn what gets punished.
What disappears is the unglamorous work that pays off later. Somebody spending real time understanding how a client’s customers actually buy instead of assuming. Rebuilding a broken measurement setup that won’t show a result for a quarter. Putting the best person on a hard problem instead of the available person on an easy one. None of it shows up in a monthly report, and all of it is what separates an agency that moves your numbers from one that keeps you busy.
This bites hardest in the relationship that’s already struggling. Results are soft, the client is frustrated, and everyone knows the account might not survive the quarter. That’s exactly when the account needs more senior time and more willingness to tear something down and rebuild it, and exactly when the agency has the strongest disincentive to spend any of it. So it holds back, plays it safe, and hopes. Which produces the outcome everyone was afraid of.
None of this is unique to agencies. John Graham and Campbell Harvey of Duke, along with Shiva Rajgopal of Columbia, surveyed 401 financial executives about how quarterly earnings pressure shapes their decisions. Seventy-eight percent said they’d walk away from money if it kept their quarterly numbers looking steady. Fifty-five percent said they’d pass on a project they knew would make money, if starting it meant missing this quarter’s target. These aren’t bad people. They’re competent executives working inside a reporting window that makes the wrong choice the rational one. An agency on a thirty-day horizon is running the same problem with a shorter window.
I know the obvious response, because I’ve made it myself. A good agency should just do the right thing anyway. But that assumes incentives only work on people who notice them. Researchers studying California birth records found that physician convenience and financial incentives shape when C-sections get performed, with convenience-driven procedures clustering into more convenient hours. Ask any of those doctors whether they put the patient first and every one of them will say yes, and mean it. The data still shows what it shows.
I’d rather have good people in a bad system than bad people in a good system. Good people in a good system beats both.
Which is the point. Month-to-month protects you from getting stuck with a bad agency. It does nothing for the agency that’s genuinely good, genuinely on your side, and still finds itself quietly making smaller choices without ever noticing it’s doing it. Incentives beat intentions.
And those two failures don’t feel the same. The first is loud. You know it when it happens, you leave, and you tell people about it. The second is quiet. You get a report every month, the work is competent, the numbers move a little, and you never find out what you didn’t get.
A longer term also gives an agency something to build around. It can hire against the account, invest in infrastructure specific to your business, and plan past the next invoice.
Not every relationship needs this. My PR firm, Canvas PR, sells guaranteed article placements in top-tier publications. Each placement either happens or it doesn’t, and we don’t do retainers at all. A longer term would add nothing. The case for one gets stronger the more the work compounds, which means SEO, paid search, content development, social media. Anything where month five builds on month one, and where the agency gets better at your business the longer it’s inside it. If you’re buying a discrete outcome, buy the outcome.
None of this is an argument for signing whatever an agency puts in front of you. Ask them how you get out if they don’t perform, and how performance is measured. Ask what happens if you want to terminate early for other reasons. If an agency gets defensive when you raise questions like this, that tells you something.
Underneath all of it sits a measurement problem. The reason a longer term feels risky is that you often can’t see what you’re actually getting, which is the same reason most marketing agencies can’t honestly guarantee results. That’s what we’re working on at BUILT, the application and web development arm of MWI, where we’re building systems to precisely measure ROI. Once you can see that, contract length stops being a leap of faith.
Until then, look for three things in a longer agreement. An exit that actually exists. A cost of leaving that’s real but well short of the full contract value. And a specific commitment from the agency in exchange for the term.
We’re pitching a client right now on a twelve-month SEO agreement with two things we couldn’t offer month to month. A dedicated account manager who works on their account and nothing else. And a custom WordPress site at no charge. (Want a similar arrangement? Let’s talk.)
We still default to month-to-month at MWI. Those relationships are healthy and happy. I wonder if they could be even better.
What’s your take?
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