Before you fire your agency, answer these three questions. Most of the time the problem isn’t what you think it is.
I get asked this constantly. Business owner is frustrated. Leads are inconsistent. The agency’s report looks like a lot of green arrows but the business doesn’t feel like it’s growing. And the instinct is: fire the agency, start over.
Sometimes that’s right. More often, the problem is something else entirely.
Here’s how to diagnose it before making an expensive decision.
Question 1: What Does Your CAC-to-LTV Ratio Say?
Before any other analysis, calculate your customer acquisition cost over the last 90-120 days. Total ad spend plus agency fees divided by the number of customers acquired from those ads.
Now compare it to one-third of your customer lifetime value.
If CAC is under one-third of LTV: The agency is doing their job. The feeling that it’s not working might be an expectations problem, not a performance problem.
If CAC is above one-third of LTV: There’s a real problem. Now you need to figure out where.
Don’t fire anyone before doing this math. I’ve seen businesses fire agencies that were producing profitable customers because the owner was focused on a CPL number that felt too high — while never running the full CAC-to-LTV calculation that would have shown the ads were working.
Question 2: What Is Your Close Rate?
If CAC is too high, the next question is whether the problem is at the lead generation stage or the sales stage.
Closing 20% or more of qualified leads? Sales is doing its job. The problem is likely lead quality, volume, or cost per lead — things the agency influences.
Closing less than 20%? The problem might be your sales process, not the leads. Firing the agency doesn’t fix a broken follow-up sequence or a salesperson who can’t handle objections.
I worked with a client who had fired three agencies in two years. Leads were ‘garbage’ every time. When we dug in, close rate on qualified leads was 11%. The leads weren’t the problem. The sales process was. The fourth agency would have had the same results.
Question 3: Are You Giving the Agency What They Need?
This one is uncomfortable, but it matters.
Agencies need:
- Approved ad copy and creative (fast, not in three weeks)
- A functional landing page they didn’t build but get blamed for
- Access to conversion data and ideally sales data
- Budget stability — constantly changing budgets prevent the algorithm from learning
- 90+ days before you judge results
If the agency is missing any of these, their performance ceiling is artificially low. Firing them doesn’t fix the structural problem — you’ll hit the same ceiling with the next one.
When You Should Actually Fire Your Agency
Fire them if:
- CAC math is broken AND you’ve ruled out the sales process AND you’ve given them the resources they need AND it’s been 4+ months
- They can’t explain what they’re doing and why in plain language
- They’re not tracking and reporting actual conversion actions (form fills, calls) — just clicks and impressions
- They repeatedly make the same mistakes after being flagged
- They won’t give you access to your own ad account
Don’t fire them if:
- It’s been less than 90 days
- You haven’t done the CAC math
- Your landing page hasn’t been optimized
- Your close rate is the problem, not lead quality
- The numbers actually work but it doesn’t feel like enough