When is an agency too expensive for what I need?

Short answer. The moment you are mostly buying execution you could steer yourself. An agency is expensive for hands and sharply priced for thinking, and most dissatisfaction starts with that mix-up.

"Too expensive" rarely means the rate is too high. It almost always means you are buying something that rate was not meant for.

The mix-up that causes most dissatisfaction

An agency is built around people who think, choose and persuade. That is expensive, and it is worth the price as long as there is something to think about. Put that same team on executing work whose direction is already fixed, and you are paying a thinking rate for hands.

If you recognise this, the conclusion is usually not "find a cheaper agency" but "this work does not belong here".

All three point to the same fix: move this work to a freelancer, an execution partner or in house, and keep the agency for what there is genuinely to figure out.

Why comparing day rates settles nothing

At agencies, price does not sit in the rate but in how much work they put into an assignment. IKAg measures that with its own unit, PAR, where one PAR is roughly two agency days: scope is expressed in units of work, with the fee beside it. Those measurements show up to eightfold differences between agencies on a single proposal line, while the difference across the full scope is only 1.1 times.

In other words: agencies differ enormously in how they distribute the work, and barely in what they charge in total. A day rate never shows you that.

The test that does work

Ask, line by line, how much work it contains and who will do it. Two proposals with the same total can hold a senior strategist with a junior executor, or the other way round. That difference decides your result, and it appears in no rate card.

See also: is my agency too expensive, what a normal hourly rate is and how to keep costs from running away.

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