How do you measure success with 3rd party demand-generation agencies? What is your experience and did you have any success in driving demand gen through 3rd party agencies?
Unfortunately, I don't have a good answer for this one. I have never actually had success with a 3rd-party demand generation agency! I truly believe this is a role that requires a level of project management and organizational understanding that you cannot outsource without heavy involvement from someone internal to the organization. And now with generative AI entering marketing workstreams, nurture emails can quickly written up by AI and then edited by an internal human in much less time than it would have taken to do the entire project from scratch.
However, I do believe you can be successful outsourcing highly skilled or technical roles, like digital marketing, marketing automation, or web development. These roles have a clear objective/task and require less project management: "implement a cookie consent banner on our website / build a lead scoring model from this spreadsheet outline / launch these ad campaigns." KPIs are is the required work done, done well and on time, and for digital marketing, are any metrics like CPC or CPL improving over time.
This is tricky because lead generation providers want you to measure based on CPL or mqls. That's wrong. The truth is that none of these leads will be qualified or sales ready at the start. It's your job to identify your ICP and work with these vendors to receive leads that match your ICP. So I analyze vendor performance and match rate of my ICP. I also evaluate them based on lead quality, rejection rate, and data quality
I've had success working with DG agencies across paid media, operations, and lifecycle, as well as challenges, and have learned a few key strategies to make these relationships as productive as possible. Most importantly, when working with third parties, accountability is everything. Here is how I create it:
Clear KPIs: Before signing a contract with a new agency, I require mutually agreed-upon KPIs so both parties have clear expectations from the start. These serve as a valuable reference point throughout the engagement.
Onboarding like an employee: Since agencies aren’t internal, their approach can sometimes misalign with company strategy. To minimize this, I expect agency partners to onboard as much like an internal employee as possible. Ideally, this includes everything from listening to sales demos to reviewing key documentation (ICP, messaging, positioning, value props, etc.).
Connect the dots: To set agencies up for success, I ensure they have visibility into what’s working across other channels and what’s on the roadmap. I also introduce them to internal team members to foster alignment—whether they’re focused on paid media, operations, or another function.
The common theme across the points above is trying to reduce the disconnect that exists by nature of being a third party. If you are going to spend the time and energy evaluating different agencies, moving them through legal and procurement, and onboarding them, make sure you are setting both parties up for success from the start.
The key for agency success is establishing goals, no different than you would if you used internal resources. I recommend thinking in terms of both leading and lagging indicators - for example, if paid media is involved set targets for things like CPL or conversion rate, but then don't stop there. I'd recommend connecting all of your programs into your CRM (e.g., SFDC) to make sure you can track full impact to pipeline and revenue. In a world where every marketing dollar matters, it's critical your agency can deliver on your goals. If they don't know your goals that's really tough. Any good agency should absolutely want to know your goals and align with you. I've had success in doing this, but it also comes down to not "setting and forgetting." Agencies require a strong partnership - they need to hear feedback and also be held accountable. No demand program is perfect - so the key is making sure to continually be inspecting then optimizing as you go.
Whether or not a 3rd-party agency will make sense for your business is truly dependent on your own scenario. I recommend considering your budget and resources to determine if hiring an agency would be more sensible than recruiting talent in-house.
To measure success, you first need to start with clear objectives and the business outcomes you are trying to achieve. Be sure to set measurable goals; this is a requirement to truly understand the ROI.
It's also important to establish baseline metrics, create reporting mechanisms to measure these metrics, and find a way to assess the quality of the leads.