In The New Normal, Client Retention Means Playing Above The Rim

basketball_rimDenial. Anger. Bargaining. Depression. Acceptance.

These are the five stages of grief a PR agency (or any business for that matter) goes through when a good client takes their business to a competitor.  Each of the five stages were detailed in a recent post in which I promised a follow-up with a few ideas on how an agency can beef up its existing client retention program (you have one, right?).

The problem some agencies and other organizations have is this:  a short memory. What often happens once the initial jolt and after shocks of losing a good client subside and everyone gets back to business, or perhaps even begins work on behalf of a “replacement” client, is that they revert to some of the same bad habits that got them in trouble in the first place, like ignoring the obvious signs of a failing business relationship.

While many of the keys to client retention in the “new normal” are second nature to many organizations and are seamlessly rolled into how they conduct business on a day-to-day basis — like proactively managing and measuring client expectations, the overall health of the relationship and the value that is being delivered while saying “no” to non-aligned business — there are above the rim ideas that can help lock in a client for life.

For example, how about setting a new standard for quality performance? Name it whatever you want (TQM = total quality commitment?).  Pull your senior client-facing managers together once a month for a couple of hours to probe and to get to the root of client issues and problem areas.  Don’t talk about staffing or utilization or new business at this meeting.  Just focus on the organization’s top clients and use the time to share best practices. Chances are you or one of your peers is facing a client relations issue another had already experienced and successfully resolved.  It’s amazing how many important war and success stories aren’t shared in real-time due to the hustle and bustle of the average work day in a typical agency.  Set time aside for this.

Secondly, consider retaining an independent auditor — someone familiar enough with your business to add real value —  to call on your clients a couple of times a year to nip little problems in the bud.  Quarterly reviews and a relationship management tool like the balanced scorecard can take care of the bigger business issues.  But a five or ten minute call or email questionnaire every six months from an independent professional will solicit from clients the type of complaints they might not normally share with their account team.

And how about a customer advisory board?  A board can be challenging to assemble (and a bit tricky regarding which clients to leave in and which to leave out)  but  can be well worth the effort.  A customer advisory board can accomplish a few critical goals as part of a broader customer retention program:

  • the board should be composed of execs from your biggest customers (customers who deliver the lion’s share of your organization’s revenue).  Even if they don’t want to commit the time, any client will be flattered you asked and just by doing that you have deepened your relationship with them.
  • board members can provide your organization with early warning shifts in their needs as well as emerging opportunities and feedback on new services your firm is providing (or should be providing). And for board members,  membership gives them an opportunity to share best practices, network and build new relationships with other executives in and outside of their industry.
  • By following through on customer advisory board recommendations, you’re ensuring client satisfaction, building customer loyalty and reducing attrition among your biggest revenue generators.

I’m always on the watch for innovations in customer retention programs so holler back.

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When Losing a PR Rock Star is a Business Opportunity

946302099_ac888c2d2c_zLosing the rock star employee on a critical account can be devastating to a public relations agency – as least as far as that account goes.

Or, it can be a stellar opportunity to showcase to your client other outstanding staffers who have been living in Elvis’ shadow, new or enhanced service offerings and big, fresh, creative program ideas.

Several years ago while working at a global PR agency, the rock star account supervisor on an $80,000 per month tech B2B account announced her resignation.  Shortly thereafter she headed off to Europe with her fiancee who had just landed a financial services job overseas (there was no hope of keeping her at the firm).

This particular account supervisor was not only doing a superb job leading the day-to-day activities of a seven person team and driving superior results, but she had become the confidante, pseudo girlfriend and “shrink” to the primary client contact.  Their relationship was one of those “good problems to have” because as long as this rock star was engaged on the business, the business was rock solid.

At the same time, the client’s over reliance on this account supervisor — and the fact that I let it happen — was a disaster waiting to happen.  Happen it did. Not fun.

What I did wrong

To exacerbate the situation, I scrambled for a plug-and-play replacement for the outgoing employee instead of taking a step back to think about a more effective, more creative, more sustainable solution.  Instead of looking at the resignation as an opportunity to strengthen the client relationship, I was playing not to lose.

I was shackled to the false security that an old, established way of doing something provides.

Although the client was extremely upset that her account lead was leaving the firm, our relationship was deep enough and the broader team proven enough that we’d get the chance to make things right.  As luck would have it, though, the replacement account supervisor (who had been with the firm for a few years) also resigned about one month into her new role.  It wasn’t much longer before the account went up for review.

If I had the chance to do it all over again, I’d do a few things differently

First of all, I would never allow the rock star to “own” the client relationship.  The rock star and client should have a tight and trusting relationship, but a client hires a team and an agency. This means Elvis needs to proactively share the stage with the team to demonstrate bench strength and true leadership.

Secondly, I would not respond to the rock star’s resignation as if it were the end of the world.  Employees come and go and agency leaders have to plan for the inevitable. Instead of rushing to replace one rock star with another, I’d embrace the opportunity to treat the account like new business.  This could be an ideal opportunity to bring the entire office together, to get everyone involved in reinvigorating an account with new perspectives and to share the enthusiasm with the client.

Thirdly, I would review the staffing on all accounts to ensure the agency wouldn’t find itself in a similar situation with other clients.  I bet there were a number of accounts at the time that would have benefited from fresh thinking, new personnel, or at the very least, an office-wide brainstorm.

And finally, on an account of this size I would invite the client to become part of the solution by inviting her to participate in a discussion about next steps vs. assuming that she was OK with my simply replacing the outgoing account supervisor with another.

Live and learn.  Any tips to share re: how you have handled similar situations?

P.S.  The agency was able to replace the account — dollar-for-dollar– with a competitive business.  Phew.

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.

The Balanced Scorecard: Guaranteed To Reduce PR Agency Client Attrition

4978686242_3213d97e16The balanced scorecard (BSC) measurement system, which measures a business and business relationships across four critical categories, will absolutely positively save — and even grow — accounts when appropriately tailored and implemented for your public relations agency and clients’ needs.

I got religious about the BSC scorecard during my tenure with global PR firm Porter Novelli.  Gary Stockman, an executive at Porter Novelli at the time, introduced the BSC to the firm in the late 90’s (if memory serves me).  We modified the traditional structure of the BSC to suit the requirements of a PR agency while fully guarding the traditional scorecard’s integrity and intent.

And when we used it properly, it not only saved a number of key, global accounts but uncovered numerous organic growth opportunities that may not never had been uncovered otherwise.

More recently, I was part of a BSC exercise with a firm’s very important (I know, they’re all important) client and the results were less than stellar.  Among the reasons for the surprising results was that the client was “too nice” to be honest about how they were feeling about the relationship and the agency — until the BSC was introduced — wasn’t asking the right questions.

On the surface, the relationship was motoring along nicely.  In reality, the relationship was skating on thin ice (you can read about the outcome in the P.S.).

If you’re not familiar with the BSC (some argue it’s really a management system that has measurement as a key component), it was created by Robert S. Kaplan and David P. Norton of Harvard Business School and was introduced to the business world 21 years ago.

Since then, it has been implemented by scores of organizations around the world as a way to measure the strength of a business and a business relationship beyond financial parameters. Of course, there’s a Balanced Scorecard for Dummies if you’re interested in taking a deeper dive on your own; and related works that could fill a BSC library. There’s also the Balanced Scorecard Institute which apparently has trained more than 5,000 people on BSC practices.

A traditional balanced scorecard has four legs: a measure of a client’s level of satisfaction with a company’s products and/or services; a financial track; the internal business process leg (IE, what are we better at than anyone else?), and finally, the knowledge, education and growth leg (in simplistic terms, how do we improve upon our core competencies?).

For PR agencies, a BSC can be structured similarly with only a few modifications.  It could go something like this: Top-4-Online-Invoicing-Tools-Make-2010-Relaxed-For-Your-Customers

  • 1, Strategy — these are questions that help an agency understand the client’s world. Questions like, “Does the agency understand my business?” and “Does the agency understand my internal challenges?”
  • 2, Execution & Tactics — the goal of this leg is to understand from the client if the agency is acting strategically.  Questions like, “Does the agency come up with program recommendations I would not have come up with on my own”? and “Do the agency’s program ideas reflect bigger picture thinking?”
  • 3, Results/Impact — questions that get at issues around desired value and showcase the agency’s impact among client senior management.  Questions like: “Are the agency’s results viewed by my management as having an impact?”
  • 4, Income & Investment — is the client seeing a return on its investment.  Questions like, “Does the agency do a good job of managing my budget”? and “Has the agency had a positive, measurable impact on my business.”

Any thoughts on using the BSC in your agency or if you’re a client, asking your agency about developing one?  Are the categories reflective of a holistic approach to measuring and managing agency-client relationships?

P.S.  The agency-client relationship that was skating on thin ice just prior to the BSC ultimately survived thanks to the quick action both sides took on the heels of the BSC.

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?

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!