Why Multi-Year Marketing Agreements Are a Bad Deal for Most B2B Businesses

Why Multi-Year Marketing Agreements Are a Bad Deal for Most B2B Businesses

I talk to business owners every week who are stuck in two or three-year marketing contracts. They are frustrated, not seeing results, and feel trapped. The money keeps going out the door, and nothing's changing. Marketing should help you move forward, not lock you into something that is not working. A vendor needs a long contract to keep you around. That should be a red flag. By the end of this episode, you're going to think differently about marketing agreements and maybe even some of the other agreements that you sign for your business and feel more confident pushing back on long term commitments.

I am Tim Fitzpatrick with Rialta Marketing, where we believe marketing shouldn't be difficult, and it definitely shouldn't be guesswork. Thank you so much for taking the time to tune in. I'm just going to jump into it. I've got four core areas that I want to cover around this topic.

Why Multi-year Marketing Contracts Exist

The first is why in the world are multi-year marketing contracts around? Why do they exist? Spoiler alert, they don't exist to serve you as the client, okay? First thing we need to keep in mind when we look at why multi-year marketing contracts exist. Full stop. Marketing takes time. Most people are not going to tell you that. I will. It takes time. There is no quick fix. There is no servo bullet. You can't go into a marketing relationship with a vendor or a partner provider and expect immediate results. Don't invest in it if you aren't committed. That is the first thing. That's not to say that there aren't quick wins. There are always quick win opportunities. But in general, to build a marketing engine that yields consistent, repeatable results. It takes time. Now, having said that, marketing providers use long term contracts to reduce their risk, not yours. Think about it. You may want your clients in long term contracts. It's good for you, but is it really in the best interest of the client to be in a long term contract? Most of the time, no. Predictable revenue is great for them. And when you If you have long term contracts, it's predictable revenue. Even when results are unpredictable for you, the client. Long contracts often hide weak strategy. Weak execution and results. If the results are unclear, time becomes the excuse. Just give it another six months, then another six months. And many providers bundle tactics instead of outcomes. They're focusing on activity instead of results. You're paying for the activity, not progress. Think about it like this. Locking you into a multi-year marketing contract without results is like committing to a three-year lease on a car before you know if the engine even runs. Not good, right? It's not good for you. So the reality is long term contracts are typically good for the vendor, not necessarily you as the client. Now, there are reasons why you might want to sign a long term contract, but with marketing, in most cases, it is not a good thing for you. It's a great thing for the provider.

What Goes Wrong for Business Owners Who Enter Multi-year Marketing Contracts

So what actually goes wrong for business owners here? I've already touched on some of this, but you're not getting results, but you can't leave. And that sucks. That creates resentment and mistrust really quickly. Your budget's stuck. You have money tied up in something that is not working for you, and you can't shift those funds somewhere else. It's tied up in a bad agreement, but you can't reallocate to something better. Teams disengage. Your internal people stop believing that marketing can work because they're stuck in this contract. There's resentment. You've been burned. The real cost is not just financial here. It's lost momentum. It's lost confidence. It's lost time. And the next time, Frankly, a lot of people just stop after this. When they get out of the agreement, they just stop marketing because they've been burned so bad. But that doesn't help you make progress long term. This is not a discipline issue on your part. It's a structure issue in the agreement. We got to eliminate this at all costs.So I want you to even think twice about a one-year agreement. They deserve scrutiny. It's not the end of the world, but they do deserve scrutiny. A one year agreement can make sense in some cases. Strategy driven work takes time, as I said. When we work with clients to build a marketing engine, we don't have long term commitments, but we always go into it letting them know that you need to have the proper expectation here. We're going to focus on quick wins, but a lot of this stuff does take time. So if you come into this with a two, three-month mindset, you're going to be disappointed. And that is not the right way to go into this and enter into this type of activity.

Now, the problem is when time replaces accountability. Time does not equal results. If someone cannot clearly explain what progress should look like 30 days, 60, 90 days, that's a problem. And so if you are going to enter into longer term engagements. Frankly, even if you're entering into month to month, you still want to know, what does the path look like? What are the waypoints that you're going to pass, that you should pass? And when should you pass those? That helps give you an idea of what to expect. It's also something that you can help hold that partner or that vendor accountable for. Hey, you said this is what would happen in 30 days. This is where we would be at 60 and 90 days. Shorter commitments force focus. They force clarity. If you haven't signed a one-year agreement, that provider, they need to do work for you. They don't have you tied up for a year. They are going to be focused. They are going to make sure that things are clear so that both of you know what to expect. It forces both sides to pay attention. There's a key mindset shift here. Marketing is not something you set and forget. It needs those checkpoints. It needs feedback and the ability to adjust or exit if it's not working. Now, we do need to give it enough time, but we have to have flexibility there and the ability to shift course. I hope this is sinking in. I hope this is helping because I do not want you to be one of these people I talk to who has signed a three-year agreement, and they're six months in, and in It's not working, right?

How to Think About Marketing Commitments Differently

So how do we think about marketing commitments differently? A few things. One, start with low-risk short-term engagements, right? Projects, pilots, or month-to-month advisory. Okay? Don't go into it expecting immediate results. You need to think about this from a long-term commitment perspective, but I don't want you to sign long-term commitments. We need to separate marketing strategy from execution. Locking into execution, i.e, a marketing agency without a clear plan is backwards. You are putting the cart before the horse. We've got to put strategy first. Strategy before tactics, always. Ask better questions before you sign anything. What's going to change in the first 90 days? How is success going to be measured? What happens if this is not working? Get that information upfront so that you know what to expect. Healthy providers, partners are confident enough to earn your business every month. They're confident enough to not put you in a hostage situation. The best partnerships are built on mutual confidence, not contractual handcuffs.

Conclusion

I hope you found this helpful. Certainly, if you've got questions, reach out. But if you are stuck in a long term agreement that is not delivering, it is not the end of the world. It happens to the best of us. But going forward, remember this, marketing should create options, not remove them. Flexibility within your marketing is a strength. It is not a risk. And if you are about to sign something long term, I'm going to recommend you pause. Ask if the agreement protects progress or just protects the provider. Hope you found this helpful. Thank you so much again for tuning in. I am Tim Fitzpatrick with Rialto Marketing. You want to connect with us? You can do that over at rialtomarketing.com. That's rialtomarketing.com. But if you feel like you're doing all the recommended marketing stuff and you are still not seeing results, you're stuck in the marketing maze, if you want to get your roadmap out, head on over to marketingenginescorecard.com. That's marketingenginescorecard.com to find out exactly what's keeping your marketing engine from delivering consistent growth. Takes less than two minutes, so go do it now. Until next time. Take care.