In episode #559, Eric and Neil explain when and why you should not hire freelancers. Tune in to hear how the allure of low-priced freelancers may end up costing your company more.
Time-Stamped Show Notes:
- [00:27] Today’s Topic: When You Should NOT Use Freelancers
- [00:36] When you are looking for someone to do paid ads or an involved marketing activity, ideally this will be a full-time hire that you work with directly.
- [01:01] Freelancers have a few clients at a time and cannot give you their full focus.
- [01:25] As you’re trying to scale, you’ll find they won’t move as quickly as they want.
- [02:06] Because you are paying for their time, try to use time-trackers like HubStaff that takes screenshots of what your freelancers are doing.
- [02:54] As you start growing, freelancers will sometimes take your trade secrets and use them with other clients.
- [03:40] Freelancers are cheaper than employees, but it may hurt you in the long run.
- [04:02] Is it cost or is it price that is important to you?
- [04:15] If you hire the least expensive freelancer, what will it cost your company when you don’t get results?
- [04:49] If price is more important, you will probably lose out and cost your company more.
- [05:03] A full-time person may cost more up front, but cost your company less in the end.
- [05:15] When starting out, use freelancers. When you are trying to scale and grow, it is wiser to use full-time employees.
- [05:39] That’s it for today!
- [05:41] Go to Singlegrain.com/Giveway for a special edition of Crazy Egg, the heat mapping tool.
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Full Transcript of The Episode
Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu.
Neil Patel: And I'm Neil Patel.
Eric Siu: And today we're going to talk about when you should not use freelancers. So, certainly Neil and I use a ton of freelancers, and here's the thing, when you are looking for somebody, let's say as an example you want someone to do something that's paid advertising, or a really involved marketing activity, ideally, this is someone that you're working with directly. This is someone that's involved full time on your business, because they understand the ins and outs of your business, and you're not outsourcing it out.
Because here's the thing, when you're using freelancers, they are working on different clients, they're working on different projects. They're not 100% focused on you. So when you hand something off like a marketing campaign, or even a funnel, where you're just handing it off to them and expecting them to do what a full time person can do, well they're not going to deliver that kind of quality, because they're not fully invested in terms of their time. They're split across different things, they're spread thin, they're not going to deliver the best work to help you grow your business.
Neil Patel: The other problem that you're going to run in to with freelancers is, as you're trying to scale and you've got your economics down, you'll find that they won't move as quick as you always want. By having people in house, your communication won't break down, you're not going to run into as many issues, and you'll find that you'll grow much faster.
At the beginning freelancers are amazing, because it helps you keep your costs down, you can move pretty quick, but once you're at a scale where you're trying to get into the millions and millions of dollars, yeah you can still use freelancers here and there, but it's just better to start doing things internal.
Eric Siu: Yeah, and so a couple of things to help you, let's say you are really hellbent on using freelancers. Well, what you can do is, because you're basically paying for time at the end of the time, your agreement can be saying "Hey, maybe you guys can come into our time tracking tool," so for us we use a tool called Hubstaff. And what Hubstaff will do, yes it's kind of big brothery, it will take screenshots of your screen every single five minutes, and when they're working it actually proves that they're working on it.
So, I've actually lost my shirt in the past where I said "Hey, here's the project, here's the scope of the work, here's the deadline. I'm going to leave you to it," and it ends up being tons of delays, or they kind of just disappear. Well, you've got to find out, if you're paying for that time, what they're doing, and you're able to optimize on that. Because, at the end of the day, let's say even if you're starting up, time is money. And if you don't optimize your time, or how your freelancers are working with you, you're going to be in trouble, and then ultimately it's your fault.
Neil Patel: The other big problem that I've run into with freelancers, as you start growing and you start growing really fast, freelancers in some cases will start taking your trade secrets, or stuff that they're doing for you, and start copying and pasting and doing it for other clients. We get a lot of people that we end up hiring being like "Oh, I do X, Y and Z for Neil Patel and his team, if you want the same funnel, we've created it for him, we'll copy and paste and just give it to you."
You end up running into a lot of issues, even if you make them sign contracts that they won't do any of this stuff. And we don't really have one person who does everything, but let's say someone's helping us out with our Infusionsoft campaign. Yes, there may have been three or four consultants beforehand, but a lot of people end up just jacking it, even if they don't advertise it, and start selling it to other people.
And it hurts our revenue in the long run. The freelancers are cheaper, but because more people are using the same marketing techniques that we are, it ends up dropping our conversion rate over time.
Eric Siu: Yeah, I always like to tell people, especially when they're about to work with us, they're like "Eric, your costs are actually more expensive than other agencies," and what I ask them, and this is something any of you agency people, or service based people that are listening, you can say this "Is it cost, or is price that's important to you?" And I learned this from this sales master named Victor Antonio.
And, so people are going to say ... Well, they're going to get confused, right? Like what's the difference? Well, you say "Hey, if it comes down to price, yes, other agencies are charging maybe $500," ... Or other freelancers I should say, "Maybe freelancers are charging you $500 or $1,000 a month, and, yes, we might be charging five times more than that. But what if they don't work out? What if you have to go through two or three freelancers and it ends up taking you a year or two years to get results? What are the costs to your business? Not just the price that you're paying, but also the time cost?"
So, what I say is in terms of price, we're always going to lose, but in terms of cost, because we're going to get you results faster, and this is the same thing with somebody that's full time, well, if price is more important we're going to lose, but if it comes down to cost, you probably need to hire someone that knows what they're doing. Someone full time, probably not a freelancer.
So you get my point here, I'm using the agency as a comparison, but we can use a full time person here to say that's the difference. A full time person's going to get you results faster, they might cost more in the short run ... I mean at the end of the day they're going to win on cost and then they're going to lose on price, but you get what I'm saying.
Neil Patel: So, the short answer of it is when you're starting off use freelancers. When you're trying to scale and grow, and you're already in the millions of dollars in revenue, bring people in house. It's more expensive, you'll flow way better in communication, and you'll find out in the long run you'll grow faster.
If your core team wants to use freelancers to help here and there, that's fine. But you can make that decision once you're in the few million range. Before that, by all means, use freelancers as much as you want.
Eric Siu: Great, so before we go we have the special marketing goodies to give away to you. Just go to singlegrain.com/giveaway to claim those goodies, and we'll see you tomorrow.
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