Preventing “Death by A Thousand Cuts” in the Agency-Client Relationship

There’s a reason many corporations prefer hiring communications professionals who The Business Lab ending toxic Client Relationships on a positive note - representative and consultant Katherine Hennessy-resized-600have experience working on both sides of the table: as a client and for an agency.

Perspective.

If you have ever been the client, you know what great and lousy client service looks and feels like.  And if you later made the switch to the other side of the table, to a public relations or other type of agency, you then had the opportunity to serve clients with the same level of customer service excellence you expected (and perhaps actually received) from your agency when you were the customer.

Also, it pays to be familiar with the pressures and challenges of working on the inside and you can only get that from working on the inside.  Too many agency employees have an inaccurate picture of what their clients are up against because they have never walked in their shoes.  Perhaps the subject of a future post.

As for me (thanks for asking!), I’ve split my career down the middle with half of my experience as a client and the more recent half serving clients from big, medium and small agencies.  During the client years, I saw agency-client relationships disintegrate in slow increments.  Typically, it was death by a thousand cuts vs. the result of a single infraction. And sad to say, I witnessed the same phenomenon while on the agency side.

In almost every case, it was the little things that built up over time that led to divorce.

If you are currently working at an agency and have never worked on the client side, here are a few timeless tips — in addition to outstanding results, of course — that will help keep the relationship with your customers on the right path:

  • Acknowledge that you received your client’s email or text with a simple “got it” or “will touch base with you on this” or anything that sends the message you are available. A client’s imagination can run wild when their attempts to communicate with you aren’t reciprocated in a timely manner.
  • On the other hand, don’t get upset if your client doesn’t get back to your emails or calls in a timely fashion. The agency-client relationship isn’t always a two-way street and that has to be OK with you or you will make yourself crazy.  Clients spend lots of time away from their desks, confined in conference rooms for meetings that go on and on and on.  And they have their own internal clients to serve and politics to play. Cut them some slack.
  • Call your client.  Email and team conference calls are great and have their purpose. But some of the best engagements and ideas come about when the account team lead and client chat live. Clients enjoy hearing from their agency, even if it’s just a call to check in.  So pick up the phone.
  • Remember that the client hired the agency, not you.  Show leadership by encouraging all members of your account team to be heard on the weekly group client call. Clients want to hear how every member of the team is contributing.  For a client, there’s nothing more uplifting than when on one of these calls a junior person begins to “get it” and shares a brilliant idea.
  • Get the agency’s most experienced people involved with your client’s account.  Invite them to an occasional brainstorm, especially around the bigger initiatives, and then tell your client about it. Most clients recognize that agency management isn’t involved with their account on a daily basis, but many have the fair expectation that senior agency leaders are making a contribution beyond invoicing.
  • Share bad news with your client sooner rather than later.  Whether it’s a missed media opportunity, the resignation of a key team member, etc., clients have the right to hear about it as soon as possible because it impacts their business.  Too many agencies procrastinate when it comes to sharing negative developments with a client.  Most clients, however, realize that despite best efforts, not everything is always going to go as planned. Work together on solutions.
  • Encourage your client to occasionally recognize the account team’s good work. They need and most often will appreciate the heads up. And your team will do their best work for the clients who appreciate them.

PR As a Top 10 Most Stressful Job…Oh Pahlease

stress-pencil-croppedThe annual list of most stressful jobs is making the rounds and some of my public relations colleagues are carrying the fact that “public relations executive” was ranked by CareerCast as the 6th most stressful job as a of badge of honor.

Here’s the full list, beginning with most stressful job:

Enlisted military, military general,  firefighter, airline pilot,  event coordinator, public relations executive, senior corporate executive, newspaper reporter, police officer, taxi driver.

Outside of the entertainment factor, the annual listing isn’t very meaningful, really.  You can read more about the methodology CareerCast uses for its ranking here. To me, the comparisons are apples and oranges.  For example, an airline pilot charged with transporting 300 souls in a metal vessel travelling at 600 MPH and at 38,000 feet, or an urban firefighter sprinting into a burning apartment building while everyone else is running in the opposite direction, have stress level factors PR people can only imagine.

And it’s ridiculous to think that a big city police officer, who’s pre-work routine includes donning a bullet proof vest and a loaded pistol, has a job that’s less stressful than the PR guy who’s pre-work routine includes reviewing email, checking the charge on his smartphone or taking one last look in the mirror before dashing off to a meeting at Starbucks.

Not to downplay the PR profession by any means.  It’s a fantastic occupation, one that has been my bread and butter for more than 25 years and like any job where demanding, paying customers and deadlines and rejection are involved, it has its fair share of stresses. But it doesn’t belong on the same list as enlisted military, firefighters or police officers.  While we’re at it, add nurses and school teachers to the list but remove event coordinator, corporate executive and newspaper reporter (I was one early in my career and while I was almost punched out by an intoxicated town councilor, I was never put in a position to save lives like our heroic first responders are).

Let’s leave taxi driver on the top 10, though.  Cabbies put themselves in harm’s way every time a new client steps into their ride, especially when it’s an overly caffeinated PR person who just got word that his story idea was just rejected by the WSJ and his smartphone is about to die.

Customer Retention Is King: Four Steps to Secure the Throne

This post originally appeared on MarketingProfs.com and is authored by Jerry Jao, a co-founder and the CEO of Retention Science, which provides customer retention solutions to some of the country’s largest online retailers. Twitter: @jerryjao LinkedIn: Jerry Jao 

Blogs and communities are always buzzing about one form of marketing or another. And if you listen closely, you’ll notice that most of the marketing conversations going on—whether they’re about inbound marketing, SEM, affiliates, or mobile—emphasize the importance of getting new or more customers, as opposed to keeping the ones you already have.

The same trend can be seen in the way companies reward their sales and marketing staff. Those who acquire new customers are rewarded with generous commissions and recognition, whereas the ones working to retain current customers get a lukewarm pat on the back.

Now, to be clear, there’s absolutely nothing wrong customer acquisition. However, it’s unfortunate that customer retention isn’t getting the same (if not more) attention from marketers—because retention usually brings in more revenue, at lower cost.

New Business Is Great, but Repeat Business Is Even Better

It’s time for marketers to shift their focus to customer retention and loyalty, instead of putting all their eggs in the acquisition basket. The good news: doing so may actually be easier and far less costly than you think.

Not only is it more expensive to acquire new customers than to keep existing ones (acquisition costs five times more than retention, according to Lee Resource Inc.), but current customers actually tend to spend more than new ones.

And if that weren’t staggering enough for you, consider the Harvard Business School study that found “increasing customer retention rates by 5% increases profits by 25% to 95%.”

Why not crunch the numbers in your own business and see for yourself just how important repeat customers are for your company? Quantify your customer acquisition spend vis-à-vis retention, and take note of the revenue that new customers bring in versus how much your existing customers are spending.

First Step in Retention Marketing: Calculate CLV

Now that you’ve established the significance of retention marketing, it’s time to get started on what you can do to retain more customers. Before you start rolling out customer retention campaigns, though, you need to figure out how much you should spend on your customers to maximize your profits.

The first step in setting a budget for your marketing campaigns is measuring customer lifetime value (CLV). You need to find out how much value each customer brings into your business so you can determine exactly how much you should be spending on them.

You can use a variety of CLV equations to calculate the value of your customers. Management Accounting Quarterly, for instance, shares this formula (PDF), where it incorporates contribution margin, marketing cost, and probability of purchase to calculate CLV.

KISSmetrics, on the other hand, uses three CLV equations and averages the amounts to arrive at a final CLV.

Note that CLV depends on various factors, including business type, the nature of its customers, as well as the industry that the company belongs to; accordingly, there isn’t one universal formula that you can adopt. That’s why you should look into various equations and use the ones that incorporate metrics relevant to your business and industry.

You can also seek the help of companies that specialize in data and marketing and let them create a customized CLV approach for you.

Action Steps to Retain Existing Customers

Once you’ve established your budget, the next step is to decide where and how to spend it. Here are a few ideas to get you going.

1. Personalize

The best way to build loyalty with your customers is to make them feel valued. Don’t treat customers like numbers on a spreadsheet. Regard them as individuals by personalizing your correspondence with them (e.g., emails or website greetings that mention their name), or by adding thoughtful touches to your communications with them (e.g., handwritten notes and birthday cards).

You can also customize the offers or website experiences that you provide. Gather as much data as you can about your customers. Track their site behavior, purchase history, demographic information, etc., and use that data to create personalized experiences for them.

For instance, if you know that the person browsing your site is a female who bought shoes from your store in the past, then you should display relevant product recommendations on your site instead of a generic one-size-fits-all page.

The same goes for the discounts and offers you give out. If the data tells you that Person A has a higher chance of purchasing when given a free-shipping coupon, and Person B will appreciate a 20% discount more, then send out a different offer to each customer to increase your conversion rates.

Consider optimizing the timing of your offers as well. Segment your customers according to the time of day that they made a purchase, and reach out to them when they’re most likely to buy.

2. Track and Test

Remember to monitor the performance of your retention campaigns. If you’re sending personalized offers, be sure to take note of the sales that those offers brought in. When you’re personalizing the timing of your offers or messages, track open rates and clicks, then compare them with those of previous campaigns.

Not seeing the best results? Perhaps you need to resegment your customers, change your messaging, or incorporate more data. It could also be a sign that you need to move on to another type of campaign. In any case, the only way to find out is by tracking and testing.

When you’re at this stage, you also need to make sure that you’re setting the right metrics. Getting 10,000 signups in one day may sound sexy, but if those users don’t amount to actual sales, then it probably isn’t worth tracking.

Always be clear on the metrics that count (it could be sales per customer, or rate of repeat purchases, or something else) and monitor only the numbers that matter.

3. Reward loyal customers

The great thing about loyal patrons is that they don’t just give you repeat business, they can bring you new customers as well. Extremely satisfied customers are more than likely to recommend companies to their friends. Encourage this practice by rewarding the people who send new business your way.

You don’t have to create an elaborate referrals program or offer huge monetary rewards to customers if you don’t have the resources to do so. A relevant offer or a token/freebie that you know they’ll love will go a long way.

Be genuine, and remember that simple, yet thoughtful, gestures toward your customers will be recognized.

4. Ramp up your customer service

Providing excellent customer service should be a no-brainer, but some companies don’t seem to spend enough of their resources on their customer support department, instead pouring everything into Sales and Marketing.

Remember, your sales and marketing team can perform a stellar job in bringing in new people, but if your support reps aren’t doing enough to keep those customers, you’re just wasting your resources.

Again, it boils down to showing your customers just how much you value them. Be respectful, treat them well, and go above and beyond to solve their problems. And if you think about it, the bar for customer service is set really low. People don’t expect much from support teams these days, so if you step up and blow them away with amazing customer service, it won’t be ignored.

“I Am Press Release” – 107 Years Young

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Today’s guest post was written by Press Release, who recently turned 107 years of age.

It’s not easy being me.  After all, how would you like to wake up nearly every day to wave after wave of news articles and blogs and opinion pieces urging me to “die die die” or to articles claiming that I have actually been dead for several years already.

It hurts.  But it’s hogwash.  Thankfully, I have resolve, staying power and a thick skin.  I keep reminding myself that at 107 years old, I am battle tested and a true survivor.

How do you think Business Wire grew over the last 50-plus years to become a company that employs over 500 people in 32 bureaus around the world?  Well, it happened on my back.  And don’t forget that the Oracle of Omaha acquired Business Wire more than seven years ago and is now enjoying more growth as a subsidiary of Berkshire Hathaway. So if Warren Buffet sees business value in me and recognizes that I’m able to adapt and morph and even thrive in the constantly changing world of news distribution and communications, well then dismissing me seems like a bad idea.

What about PR Newswire, the other big distributor of press releases? PR Newswire, which is also more than 50 years old, provides service to tens of thousands of corporate clients around the world.  PR Newswire, Business Wire and the entire community of news distribution companies that includes MarketwiredPRWeb and dozens of free services all have one thing in common:  they built their reputation and their business on my back.

There are those in the news community who say no one reads press releases.  Take freelance journalist/author Amy Westervelt for example, who recently wrote in her blog that the press release is dead, please stop trying to revive it. …  No one in the media reads press releases. Not a single person, I promise you. For some reason, companies still ask for them, publicists still write them, the wires still publish them—this whole completely unnecessary and ineffective ecosystem still exists. Stop it. Please. The only time I ever, ever hear a media person mention a press release is to mock it.

Hmm, I beg to differ, Amy.  To no one’s surprise, so does Sarah Skerik, vice president of content marketing for PR Newswire.

“No one reads press releases?” she says. “I’m sorry, I have data otherwise. People read them by the millions.”

Hey look, I’m not saying that I’m the be all and end all.  But if you use me in a thoughtful and strategic way like you do with your blogs and emails and tweets and whitepapers and eBooks — you know, as part of your targeted content plan and not indiscriminately like I see so many companies still doing while giving me a bad name in the process (aka spam), then I am going to deliver results for you.

I promise.  That’s my story and I’m sticking to it.

5 questions startups need to ask before plunging into PR

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This blog post originally appeared on VentureBeat.com.  
November 26, 2013 9:30 PM
Linsey Fryatt, VentureVillage
To do PR yourself, or to hire an agency – that is the question. In this piece, Linsey Fryatt, Germany Managing Director of Clarity PR and former editor-in-chief of VentureVillage, gives us a teaser to her upcoming PR workshop and outlines what startups need to consider before jumping into PR.

Kevin Leu, a “PR specialist,” recently penned a piece in VentureBeat about why PR agencies are crap. Thankfully, PR pro Patrick Ward fashioned a response that was much more polite and balanced than I could ever have managed. Incidentally, Leu is also the founder charming startup that lets you rate women (or “girls”, as he prefers) based on how hot they are. On a map. So obviously his expertise on what constitutes groundbreaking branding is in absolutely no doubt.

But his piece does raise an important issue. The biggest challenge I have faced since recently donning the furry robes of PR (having previously been shod in the Hessian trousers of journalism for many years) is explaining to people what a PR firm actually does, and why — especially if you’re a new brand — it’s absolutely vital to have a PR strategy, whether that means in-house, consultancy, external agency or gorillagram.

Your marketplace is crowded and increasingly global. The media landscape is massive and fragmented. Your product is, and should be, the most important thing in your world, but why should anyone else give a sh*t about it? You need to make the world take notice, and in most cases, you’re going to need help with that.

There’s a certain amount of nervousness, especially in the startup world, in hiring a PR agency. And rightly so. Your seed or Series A money is precious, you don’t want to waste a cent on unneccessary or unquantifiable services. When you couple this with perhaps lukewarm experiences with one-size-fits-all PR firms (I assume the ones that Mr Leu might have issue with) and it’s difficult to justify any kind of spend on communication strategy.

My colleague Sami wrote a great piece on the questions you ought to ask PR companies before you hire them, but I’m going to take it one step back. Here are the starter questions that you need to ask yourself that will help you guage whether you need actually need a PR agency or not. And if you do, how to have a more fruitful relationship with them…

1. What do you actually want to achieve?

It seems obvious, but it’s easy to get swept away by the first flush of column inches. It’s not enough just to want “to get a piece in TechCrunch.” [Editor: Or VentureBeat!] Do you need to attract investors? Do you need key hires? Do you need a quick increase in user numbers?

Set you key objectives you hope to get from any exposure before you do anything else. From here it’ll be much easier to brief anyone else correctly.

2. What’s your timeline?

Getting scattergun press coverage around product launch is great, but it can be really difficult to follow up. I see many companies enjoy an initial spike of interest and then drop completely off the radar in those critical following months. Think about your product timeline, and consider how you want to knit a full communications strategy into that plan.

3. What’s your budget?

Have an idea of what you are willing to spend, considering the factors above. Whether that’s an external agency fee, human-hours within your company or a completely new hire. If you’re going with an external agency, then look for ones that don’t just offer standard retainers, but also ones that are willing to offer project-based work. That way, you can see how they perform around a single task.

Also realise that it will involve a spend to do this properly. Communications and marketing should be built into your budget and not just added as an afterthought once your product is market-ready, especially if you’re a B2C product.

4. What’s your story(ies)?

What three words describe your company values? Would all your team give the same answer? Spend half a day internally nailing down your core qualities. From there, it’s much easier to begin working on the rest of your communications.

What’s your context, what do you do differently? What voices can you add to a discussion in your market? What’s your story? And who are you telling it to?

This is where the fresh pairs of eyes at an agency can give a new perspective. Ask an agency for a handful of ideas in their pitch. At the very least it will demonstrate that they “get” what you’re doing and you can gauge their creative fit.

5. Who else is doing this well?

Which companies in your space are suceeding at this? And why? And do you have a robust angle or statement as to why you are different? Journalists like to have a product placed in context (“we’re the Airbnb for dogs”) but also the justification as to why you’re offering something different to the market.

Linsey will be hosting a workshop on How to Communicate your Brand on 11 December with VentureVillage. Click here for more details.

Read This Before Blaming Your PR Agency For Lack of Coverage

ImageOn behalf of PR agencies everywhere, thank you Amy Westervelt for your recent tell-all post on why startup companies need to stop pointing fingers at their PR firms and instead learn more about how editors and journalists do their jobs.

Amy is a freelance writer/editor/author and frequent contributor to business publications like Forbes, the WSJ, Bloomberg BusinessWeek and Fast Company among others. In her post, “Stop Complaining about Your PR Firm. Here’s How the Media Works,” Amy’s shares nine things about the media “that will hopefully help you figure out how to deal with us (and maybe your PR firm) better.”

One of the bigger challenges PR firms face in working with startups is the clients’ often unrealistic expectations when it comes to media coverage.  The combination of ego, drinking of the Kool-Aid when it comes to their offering/product, pressure by investors, over sensitivity as to what the competition is doing and general ADHD-related behavior can be toxic when it comes to building a mutually beneficial relationship between agency and startup.  Add in the factor of a client who has a fundamental misunderstanding of what compels a journalist to write an article and you have a recipe for disaster.

Any engagement with a new client should include a period of expectations setting that includes how agency and client are going to work together (roles & responsibilities) to achieve the desired results of the communications program.  It’s during an expectation setting session, which should happen in the first week of a new relationship, when the agency account team should be able to find out how much the client actually knows about how the media works.  If the client is a startup, chances are the principals have limited exposure to the media and taking them through a primer would be invaluable to the relationship.

Ms. Westervelt makes a number of great points in her post, and I encourage you (if you’re a PR pro or a client) to read it in its entirety, but for now I wanted to spotlight a handful of her points.

Editors are important.  Freelancers are your best friend. So true. Freelance journalists are more prevalent and more influential than anytime in recent memory.  Unlike a staff writer, a freelancer like Amy may write for several publications. They can make more money by repurposing one article so that it might run in multiple publications, albeit with a different angle and fresh content.

The most important PR move you can make is to build and maintain relationships, and be patient.  Another great point here. Just because your PR firm was able to set up an interview with a journalist for you doesn’t mean that journalist is going to run right back to their office and bang out an article.  “Maybe I’m waiting for a newsy hook to peg it to,” Amy says.  The worse response by the agency is to harass the journalist to find out when the story is going to run “Because his or her client is sending equally as many emails.”

Stop worshiping at the altar of print media.  I think it’s still largely true that a print article is held in higher regard than an online-only piece.  Amy, however, says clients should thank their PR people for getting them mentioned in Time.com blogs.  “You may not get a photo of yourself in TIME to frame for your office,” she says, “but chances are those blog posts will be read more and pay back more over time than that one print hit will.”  Print stories still carry a ton of weight, then again, who buys TIME anymore?

And finally …The press release is dead, please stop trying to revive it.  Like you, I’m pretty tired of reading the press release is dead stories.  They’ve been showing up for years, yet thousands upon thousands of press releases are issued everyday in the U.S. though Amy maintains that “No one in the media reads press releases. Not a single person, I promise you.”  Really, Amy?  Members of the media still look to news releases to keep current on companies and their financials, business trends and for story ideas, among other reasons, including to occasionally mock PR people.

Otherwise, I think Amy’s post is spot on and I wouldn’t hesitate to share it verbatim with any startup.  Would you?

Avoid These Four Agency Client Types at all Costs

boat for saleYou may have heard the expression popular among some boat owners:

The two best days of being a boat owner are ‘the day you buy it’ and the ‘day you sell it.’

Others use a similar expression. Like those who have purchased a vacation home they never have time to enjoy.  Or that convertible as a full-time car (if you drive in New England).  I’ve heard some hackers on the golf course say the same about their Titleist blades.

And it’s been said on many occasions in the PR agency world; on those occasions when a new client turns out to be everything the agency hoped they wouldn’t be – when the two best days are the day the agency wins the client’s business and the day the agency fires that client.

A boat.  A second home. A roadster that’s to die for.  That shiny new client. All seemed like great ideas at the time. All looked wonderful from the outside. And then the honeymoon ends…and you’re in it for real.

For better or for worse, things we learn in life are often learned through trial and error. While we may try to not repeat the same mistakes over and over (there’s a definition for this type of behavior), we sometimes do.

Unlike the regretful boat owner who is typically one and done, PR agencies have histories of chasing bad client after bad client, deluding themselves into thinking that this time things will be different because they will “control” the relationship and not let the client run roughshod over them.

What do I mean by “bad’ client?  Well they come in many shapes, sizes and disguises.

There’s the client whose initial budget is below the agency’s minimum monthly retainer but promises that the budget is going to increase after the first three months or when the next round of funding comes in.  Three months come and go … another three months come and go … etc.

There’s the know-it-all client who has never worked with a PR agency before but skimmed the Public Relations for Dummies Cheat Sheet which has a section entitled, “Convincing Editors to Print Your Press Release.”  Seriously.  This client knows just enough about PR to be dangerous but still doesn’t make the distinction between an article written by an actual journalist and a news release replayed verbatim on one of those free press release web sites.

Of course, there’s the client working at his third start-up, the first two of which had successful exits and were media darlings and who is expecting and demanding the same level of media interest for his also-ran entry into the dying market du jour.

And finally, there’s the worse client type of all: the one who hires you and then disappears expecting the PR program to run smoothly without them having to pay any attention to it now that a firm has been hired.  You know the type … they make a living of hiring and firing agencies as a job protection ploy.  They blow off weekly check-in meetings, rarely return your phone calls or email pleas for information but are fast to get in your face when their company is left out of a story.

But they are happy to take credit for any positive results the agency does manage to generate.  When that happens, it’s time to sell the boat.  Don’t you think?