When a PR Agency Loses A Good Client: 5 Stages of Grief (Part I)

stages-of-grief (2)Replacing a good client can cost a public relations agency up to five times more than retaining one.   Ouch.

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.

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Chemistry Ignites the Agency – Client Relationship

imagesAll other things being equal, “chemistry” between a business prospect and the prospective public relations agency account team is very often the difference between winning the business and coming in second.

Think back to that time — I’m sure there were several — when you and your excited account team walked into a prospect’s conference room only to be met by poker-faced business people who backed up their expressionless faces by skipping informality.

Now think back:  how did the pitch go?  How difficult did the prospect make it for your team to be at ease so that they could put on their best show?  How hard did the prospect work to make sure they were in control vs. working hard to communicate that they were equally excited and had been looking forward to the meeting?

Did you win that business?  Did you even want that business?  Could you do your best work for that client?

As experienced agency executives know, the chemistry — or lack thereof — that happens during that first encounter with a prospect is often indicative of what the “working” client-agency relationship will be like.  Chances are good the agency will be treated like a supplier and not a partner.

Now think back to the other time — and I know there were many — when you and your excited account team walked into a prospect’s conference room and were met by equally eager business people who warmly greeted you with smiles, hearty handshakes, and an appreciation of the hard work the agency invested in the opportunity.

How did that pitch go?  How much more at ease were the junior members of your team made to feel by the prospect’s genuine interest in their background, their relevant experience, and their ideas for the program?  If they had a sense of humor, if they asked questions to better understand your ideas vs. to put you on your heels, if they wanted to know a little about your personal life too, well, I bet you thought that pitch went pretty well.

Perhaps you didn’t win that particular piece of business.  But I imagine the idea of  working with that prospect was appealing.  It was business you wanted.

All great agencies will pull all the stops for the opportunity to earn a prospect’s business.  If it’s worth chasing, then it’s worth doing everything possible to win it.  Otherwise, why bother?

If you read David Kean’sHow Not to Come in Second,” published in 2006 but timeless in its teachings, then you know about his eight ingredients for pitching:  be organized, know your audience, solve the problem, price properly, deliver a great presentation, generate unstoppable momentum, and demand feedback (win or lose).

Take a leap with me for a moment and assume all great agencies, whether they be disciples of Kean’s teachings or not, have a methodology for not coming in second.  Assume for a moment that a prospect is meeting with three great agencies.  During the pitch phase, each agency demonstrates proven, relevant experience;  the ability to generate breakthrough awareness levels; creative program ideas; and the ability to be an excellent business partner.

Wow, tough decision for the prospect, but a good problem to have.  So how does the prospect ultimately decide on a new agency in this situation?

Chemistry.

Who does the prospect want to work with day-in, day-out?  In good times and when times get tough? Who does the prospect want to celebrate victorious campaigns with?   Or re-build with following a crisis?

Chemistry is about a special connection between account team and client.  Typically, that connection is obvious — if it’s there — during the very first meeting.  It’s intuitive.

The importance of chemistry can’t be underestimated when it comes to selecting a business partner and cultivating a relationship that maximizes value for both parties.  C.G. Jung said, “The meeting of two personalities is like the contact of two chemical substances: if there is any reaction, both are transformed.”

I’d be interested in hearing what role you think chemistry plays in a business partnership.