An agency is worth it when the value of one new customer is high enough that a few extra customers per month cover the fee, and when you have no one internally who can run the work. Calculate your average customer value, multiply by your close rate, and see how many additional enquiries per month it takes to pay for the engagement. If that number looks small, the case is strong.
The break-even calculation
Take your average order value or lifetime value, multiply by your enquiry-to-customer rate, and you have the value of one enquiry. Divide the monthly agency fee plus media budget by that number. The answer is how many extra enquiries per month you need to break even. For most service businesses and considered-purchase brands, it is a single-digit number, which is why the work pays back.
Where agencies are not worth it: very low average order value with no repeat purchase, a product with no demonstrated demand, or a business that cannot handle more enquiries. In those cases fix pricing, product or capacity first.
Start small and prove it
We would rather begin with a website sprint or one month of media at our starting prices than sell a twelve-month plan to a brand that has not seen us work. If the first engagement does not move a number, you should be free to stop.
- 01Work out the value of one enquiry, then the break-even enquiry count.
- 02Low order value with no repeat purchase weakens the case.
- 03Fix capacity and pricing before buying demand.