Understanding Your Agency Model, with Carson Pierce –Ep.172

About this Episode

In this episode of the Agency Profit Podcast, Marcel and Carson dive into the major shift happening in agency structures—moving from in-house teams to a more flexible, contractor-heavy model. They break down why more agencies are leaning on freelancers, offshore teams, and white-label partners to protect their margins, adapt to economic pressures, and focus on their highest-value work. Marcel unpacks the numbers behind this shift, showing why it’s not just about cutting costs but actually boosting profitability when done right. If you’ve ever wondered how to balance in-house talent with outsourced expertise—or why some agencies are pulling off mind-blowing margins—this episode is packed with insights you won’t want to miss.

Watch this Episode

Points of Interest

• 00:55 – 01:14 – Meet Today’s Guest: Carson Pierce: Carson, a fan favorite at Parakeeto, joins the show to chat about a big shift in the agency world—why more agencies are ditching big teams in favor of lean, contractor-driven models.
• 01:34 – 02:29 – Agencies Are Shrinking Their Core Teams: Carson talks about a growing trend—agencies are keeping their leadership and strategy teams small while outsourcing most of the production work to contractors, freelancers, and offshore talent.
• 03:08 – 05:05 – Why Agencies Are Outsourcing More Work: Marcel breaks down the big reasons behind this shift, including rising salaries, AI shaking things up, a tough economy, and the fact that clients no longer care if their agency is local.
• 06:04 – 07:26 – Why Old-School Utilization Metrics Don’t Work Anymore: Carson explains how traditional utilization numbers can be misleading for agencies using more contractors, and why focusing on average billable rate (ABR) is a better approach.
• 08:03 – 10:44 – The Next Big Agency Trend: Internal Specialization: Marcel introduces the idea that agencies should focus on what they do best and outsource everything else—just like other industries have done to stay profitable.
• 12:02 – 14:04 – What Should You Keep In-House vs. Outsource?: Marcel shares a simple way to decide—play to your team’s strengths, keep control of the most critical parts of your client experience, and let experts handle everything else.
• 18:02 – 21:08 – Pricing Without Overcomplicating It: Marcel simplifies pricing strategy, explaining why agencies should stop obsessing over markup and hourly rates and instead focus on three things: revenue, pass-through costs, and delivery costs.
• 25:08 – 28:26 – Offshoring: The Good, The Bad, and The Smart Way to Do It: More agencies are hiring offshore talent to save money, but success depends on having solid processes and clear communication—Marcel and Carson share tips on how to do it right.
• 30:51 – 32:44 – The Future of Agencies: Smaller, Leaner, and More Specialized: Marcel predicts that agencies will continue breaking down into specialized teams, just like airlines and grocery chains have done, to survive in a market with shrinking margins.
• 34:22 – 35:04 – Final Takeaways: Marcel and Carson wrap up with a big reminder—profitability isn’t just about working harder; it’s about working smarter. Agencies that embrace internal specialization and strategic outsourcing will win in the long run.

Show Notes

• Connect with Carson via LinkedIn
• Get access to this model tool in the toolkit
• Link to Pie Chart Visualization
• Parakeeto Foundations Course
• Books
  • Digital Dollars and Cents by Jody Grunden
  • Financial Management of a Marketing Firm by David C. Baker
  • Software as a Science by Marcel, Dan Martell, Johnny Page & Matt Verlaque

Love the Podcast

Leave us a review here.