4 Steps To Reduce A PR Agency’s Client Churn – The Old-Fashioned Way

ImageWhen a public relations agency chases a business prospect that is in a non-aligned business, then expect client churn.

When an agency over promises a prospect during the hunt and can’t deliver later, then expect client churn.

When an agency takes on a new client that it can’t create and sustain value for, then expect client churn.

When an agency takes on a new client ( aka a “dog” of a client) only because it needs revenue, then expect client churn.

When agency principals keep the client relationship at arm’s length, then expect client churn.

And when an agency doesn’t take the time to proactively manage and measure a client’s expectations, the relationship itself and the value that’s being delivered — guess what? Expect client churn.

So what’s your agency’s client retention methodology?  If it has one, here are a few ideas that can give it a shot in the arm.

  • Work with clients you can deliver immediate and ongoing value to.  If you’re a tech B2B shop with expert, relevant experience in cloud computing, mobile and security, don’t think you can add immediate value to a healthcare IT company. Firms who have tried and failed to fake domain knowledge give the PR profession a bad name.
  • Develop an expertise in your employees.  Having more “experts” than generalists in-house means the agency will likely be more valuable to a client and will lead to greater client retention.  An account supervisor who understands mobile computing ecosystems is much more valuable to an organization than someone who pinch hit on a couple of mobile-related accounts and who may have just a cursory knowledge of the market.
  • Find a way for staffers to work more deeply on fewer accounts. At a previous agency I called this “fewer-deeper.”  Clever, huh? Clients know when they do and when they do not have the attention of their account team. Expecting account executives to offer significant value on more than four (five tops) accounts is unreasonable and unfair to the employees and the clients.  No one benefits from such a model.
  • Work harder to retain employees.  There’s a direct correlation between employee churn and client terminations.  Losing the lead player on a key account will disrupt that account to no end. Bury an employee in too many accounts, dogs or not, and you could say sayonara to the employee and the business.

What am I missing?

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Things a New A.E. Should Not Assume About Client Relationship

Original post appeared August 20, 2013 by Arthur Solomon in PR News.

Arthur Soloman

By Arthur Solomon

So you’ve been promoted to a level where you will have your first substantive client contact. Congratulations. This is the opportunity that you’ve been seeking. You now have a chance to show your stuff. But good work is not enough. Good client relations are just as important as good results (often more so) in your quest to climb the agency ladder. Conversely, good results will not necessarily advance your career if you can’t hit it off with clients. Just as in your personal life, relationships are important in the business world. Never forget that. I say this from experience.

During my 30 years in public relations, before, during and after my nearly 25 years at Burson-Marsteller (where I played key roles and managed national and international sports and non-sports accounts and traveled as a media advisor with high-ranking foreign government officials), I have seen account people whose work I thought was below par advance on accounts because, as a client told me about one person, “If I told him to jump out of a 35th-floor window for me he would.”

Below are some lessons about client relations that in all probability were not covered in communications schools but that might help you survive the client-agency dance.

> Don’t assume that the gorgeous young woman who accompanies your client is his daughter.

> Don’t assume that your client isn’t miffed when you always win at tennis or golf. (Lose occasionally.)

> Don’t assume that if you ask if your work is satisfactory, you’ll get a positive answer.

> Don’t assume that if you go drinking with a client, it’s okay to say, “You look terrible” when you meet the next morning.

> Don’t assume that, just because you have a good social relationship with your client, it will assure you of a good year-end account team review.

> Don’t assume that when a client complains about being passed over for promotions that you can vent about your situation.

> Don’t assume that what a client tells you about your work is necessarily what will be told to your superiors.

> Don’t assume that when a client says, “As long as I run this account, you’ll be on my team” that it is written in stone.

> Don’t assume that when you’re about to leave on vacation and a client says, “It’s really not necessary to tell me how to contact you if an emergency occurs,” it means you don’t have to leave contact information.

> Don’t assume that when a client says “no rush” regarding a request, that there isn’t a “rush.”

> Don’t assume that when a client, (or your agency superior), says, “I’m going up the corporate ladder and I’m taking you with me,” that they mean it.

> And finally, don’t assume that all the praise the client showers on you will change what your agency superiors think of you.

Do your best to stay on the good side of a client by doing high-quality work that will make your client contact look good to his or her manager, but always remember your fate is in the hands of your agency supervisors. They sign your paycheck.

Arthur Solomon was a senior VP/senior counselor at Burson-Marsteller. He can be reached atarthursolomon4pr@juno.com

 

Client Warning Signs – Part II

Warning-400x230Turns out I was wrong…again.

I’ve been informed by a number of public relations professionals that last week’s post, “9 Telltale Signs An Agency-Client Relationship Is On The Rocks” was way off base (grin).

Apparently, there are well over nine telltale signs.  I left out a few very obvious ones, like this one from Seattle-based PR pro Steven Spenser: “the client stops returning your phone calls, and getting her on the fone (sic) … becomes difficult.”

Or these gems from Gillian Findlay of Cambial Communications, greater Johannesburg, South Africa: “When the client asks to see the agency contract, the writing is on the wall. Another sign is when the agency is moved from a retainer to project basis.”

In England, where “manners rule,” Nigel Massey, chairman of The Massey Partnership in London, says that when a client is “terse in tone” then it’s “patently clear that the wheels have come off.”

Robert Sanders of Pittsburgh, Penn.-based Sanders Consulting, which consults with firms on new business strategies, tells his clients facing retention challenges to focus their attention on “controlling the relationship rather than attempting to control the client.”

Sanders said, “Agencies that modify behavior to make clients more comfortable improve cohesion and enhance their chances of retaining clients.”

He also believes that “chemistry” is the most important part of winning new business. I think many of us would agree that chemistry is also an important component of client retention.

Peter Smith, a U.K.-based veteran marketing, advertising and PR professional and today a managing director at The Marketing Doctors — a customer engagement firm — generated the most creative response to “telltale signs.”  While Smith cited the client’s call for a “review meeting” as a telltale sign (and he’s spot on with that one!), he followed with this creative, albeit somewhat cynical progression of all too many agency-client relationships (passed on to him by a former client):

Month -3 to 0 Flirting hourglass
Month 0-3 Passionate, creative, invigorating 
Month 4-6 Steady, reassuring 
Month 7-9 Annoying habits start to emerge 
Month 10-12 Predictable 
Month 13-15 Little dissatisfactions chip away 
Month 16-18 “I met this really interesting person at an industry dinner….” 
Month 19-21 Illicit meetings with new person leading to….. 

Flirting. 

Cynical? Moi? No – just seen it all happen too many times!

Love The One (Client) You’re With

220px-Stephen_Stills_-_Love_The_OneWhat’s the real cost to a public relations agency of losing a good customer?

Well, there’s the risk of bad publicity via word-of-mouth. Clients can be pretty open with their network about why they’re ditching an agency.  Many even go as far as sharing the specifics with the agencies who are vying for their business. We’ll hear anything from “I only saw the agency executives when I called them” to “they put only junior people on my team” to “we really didn’t have a good sense of what we were getting for our retainer.”

There’s also the risk of low employee morale.  Each time a client leaves a firm, there’s the concern by the now underutilized rank and file that their job is in jeopardy.  Instead of only focusing on their remaining accounts, they’re distracted by the outgoing one. They ask their friends at other agencies to keep an eye out for opportunities for them, start talking to recruiters and look for reassurance from agency principals that all will be OK.

And then there’s the mad scramble to replace the business.  Initially, the intention is to replace the outgoing client with a competing company to leverage the account team’s domain knowledge.  But the stars have to align for this to come to fruition.  For one, the prospect has to be either actively seeking a new agency partner at the time, has to be dissatisfied with its current agency and is mulling a change, or your agency was doing such fantastic work for the outgoing client (unlikely given the circumstances) that the prospect would have to be crazy to not jump at the chance to make a switch.

What happens in many cases, despite the best of intentions, is that an agency will wind up chasing the first piece of new business that comes there way even if it isn’t strategically-aligned business; even if the firm knows going in that it can’t create and sustain value for the prospect.  This creates an entirely different set of client (and employee) retention issues. Losing a good client is one thing, but replacing it with non-aligned business because employees are underutilized leads to the same nasty outcomes:  1, bad publicity (“XYZ Firm will go after anything that moves”), 2, employee morale suffers because staffers are forced to work on bad business, and 3, non-aligned business will leave a firm…eventually…starting the vicious cycle all over again.

Replacing an existing customer can cost up to five times more than retaining an existing one.  A one step forward, one step back strategy is not a growth strategy – for any business.

Client profitability increases over the life of the agency-client relationship (customer lifetime value).  The longer an account team stays on an existing account, the more knowledgeable they become about the business and thus become more deeply engaged on the account. There’s a direct correlation between high employee morale and deep engagement.  The more an account team knows about a client’s business, the easier it is to grow that account organically.

Even a small improvement in client retention rates (as little as 5 percent) can have a significant impact on a firm’s overall profitability.

Courtesy of Entrepreneur.com special projects editor and WSJ alum Colleen Debaise, here’s a great list of client retention tips directly from a few folks in the trenches.

9 Telltale Signs An Agency-Client Relationship Is On The Rocks

2008_09_24-nordicrocksWhen the relationship between a public relations agency and a client is on the rocks, the agency is all-to-often the last to know.

And in many cases, the agency has no one to blame but themselves for either not proactively managing the client relationship, for not really listening to the client or for missing client clues that all is not well — or for all of the above.  When you add it all up, it boils down to neglect – taking clients for granted and then acting surprised when a client takes the business elsewhere.

Sound a little familiar?  If you’re an agency veteran, it should.

Nothing stings more than losing a client for reasons of poor agency performance, and the realization — once the dust has settled and your firm or account team has gone through the five stages of grief — that the the client is right.  As mentioned in a previous post on client retention, proactively managing and measuring the expectations and value of the agency-client relationship begins on the first day of the relationship and only ends when the relationship does.

Once the telltale signs of a dissolving agency-client relationship have surfaced, it’s often very difficult to repair and rebuild the relationship — though not impossible.  Having been on the client side, I know from first-hand experience that once a client believes his or her business has been taken for granted, recovery is a long shot.

The good news is that many clients will fire a number of warning shots before shopping their business to competing agencies.  The bad news is that not every account team recognizes them and thus go about their business like nothing is wrong .  The hole gets deeper, and deeper…and deeper.

So what are a few of the warning signs that all is not well between client and agency?  While some are quite obvious, others are very subtle and can be missed by all but the sharpest of account team members.

Here are nine signals: 

Rocks-Whiskey-Stone-set-of-9

  • The client cancels consecutive weekly team calls, or doesn’t cancel but just doesn’t dial in only to apologize later “because something came up.”
  • The client emails you a creative program idea sent to them by another agency and asks you for your thoughts on it.
  • The client sends you a news article favorably positioning a competitor and asks, “When are we going to start seeing coverage like this?”
  • Competing agencies start following your client on Twitter, and are followed back.
  • Your client asks to see your media pitches before you send them out.
  • The interactions you are having with your client are all business and devoid of any small talk (the client can’t wait to get off the phone).
  • The client asks if you’ll consider reducing the monthly retainer by 10-15 percent while keeping the team in tact and not reducing the number of program hours.
  • The client starts expressing frustration with certain account team members and ask you to make some changes.
  • The client asks you to send over your list of tier one and tier two influencer contacts, complete with phone numbers, emails address and twitter feed info.

Am I missing any tell tale signs that a client-agency relationship is on the wane?

Client Retention Is NOT a 4-Letter Word

IMG_0143Client retention and the seemingly ever-present threat of client churn keeps public relations agency principals up at night. If you know any, just ask them.

Client retention keeps other agency leaders, like vice presidents and account directors and account managers up at night too.  If it doesn’t, well they’re in the wrong role.

There are so many good reads re: client retention advice out there that I dare not try to list them here.  But there are a few that stand out.  One in particular is the Tenacity Clients for Life Blog.   I highly recommend you check it out.  John Gamble and Steve Wurzbacher have been consulting companies on client retention for close to 30 years.  If client retention is important to you, you’d be remiss if you pass on their posts.

But while reading what the experts advise is often very helpful, those of us (and that may mean you) who have been living the agency life know that client retention doesn’t have to be a 4-letter word.  If you have ever been on the receiving end of a phone call where a client is firing you, then you know EXACTLY what I’m talking about.

100 per cent client retention is not possible.  If you think it is, you’re living in La-La Land.

But a high level of client retention (70-80%?) is possible.  And a business requirement if a firm is going to prosper.

So what are a few of the keys to client retention?

First and foremost, every prospect should be looked at by an agency individually.  What is your client acquisition strategy to help create and sustain value for a particular prospect?  It’s always easier said than done, especially when business is soft, but if more agencies closed the door on non-aligned business, client retention rates will edge up.

Secondly, take a really close look at why clients leave your firm.  There are as many reasons as there are clients.  But outside of M&A and financial issues (Chp. 11), core reasons for losing a client likely include the following:

  • you’re not acquiring the right clients under the right terms
  • you’re not proactively managing and measuring the expectations and the value of the agency-client relationship
  • your new business team is held in higher regard, are the agency “rock stars,” than are members of the client relations team; the reward for bringing in new business is higher than the reward for retaining business or growing existing business.

What’s your client retention magic?

Stay tuned for a few more ideas on how to keep client churn below the industry average.