When a PR agency loses a good client, aka getting fired, it hurts to the quick. All agencies experience client attrition, some more than others, whether it be for reasons of performance (the ugliest way to lose a client), M&A, personnel changes on the client side, etc.
And while every agency may have a unique methodology for replacing lost business, one thing many have in common is they suffer through the same emotional and intellectual (or stages of grief) phases of client loss. It goes something like this:
- Denial – this is the “tell me we just didn’t get fired” stage. “No, that really just did not happen, did it? And everything was going so well, wasn’t it?” Ah, apparently not. But denial is a natural and immediate response to a client termination and helps get the agency to the next stage – one step closer to acceptance.
- Anger – this can take a few different forms. Especially in the case of termination for performance, anger inside an agency can quickly spiral out of control if not checked early on:
- agency principals may become upset with the account director’s ability to proactively address client-agency issues before they escalate, as well as the team’s ability to generate agreed-to results
- the account director may get angry with the team for not stepping up their game and making him/her look bad
- conversely, the team may get angry with the account director for not being a strong leader
- the agency may direct anger at the client too. “Why didn’t we at least get a warning?’ Well, chances are the client sent multiple warnings. But the agency just wasn’t paying close enough attention. Here are a few of the warning signs that are almost always there.
- Bargaining – “If only we switched up the team a few months ago like we said we were going to do to bring new, fresh ideas to the program. If only we got our CEO in front of the client, like we said we were going to do, to review the program and strengthen the relationship. If only we delivered on our promises.” If…if…if…bargaining.
- Depression – with a client termination comes a host of additional issues. An agency may worry about its reputation after being fired by a client: “What is the client telling others about why they ended the relationship?” There will be staff billability and utilization concerns now that a client is leaving and the resulting dash to replace the lost business means less time will be spent on other things, like agency marketing, new service offerings, etc. And all–too-often an agency will replace good business with bad business bringing with it a new set of challenges and problems.
- Acceptance – There are times when a client will completely blindside an agency with a termination. This is the most difficult termination-type and the most challenging to accept. But more often than not, good clients signal their dissatisfaction with an agency. For whatever reason an agency is terminated by a client, by the time an agency reaches the acceptance stage it is finally ready to move forward, has conducted a thorough post-mortem and is putting plans in place to reduce client attrition.
Part 2 will explore several programs to reduce client attrition. In the meantime, I’m interested in your experiences in dealing with client loss and what formal programs you may have put in place to minimize attrition.