Client retention: The three to five-year itch

Media accounts are a huge boost to win, but painful to lose – particularly in a recession. Media Week discovers how agencies can stop their prize advertisers being seduced by rivals.

There aren’t many characteristics of marriage breakdown that don’t apply equally well to faltering agency/client relationships.

In fact, a bitter ex-spouse and a jilted agency might both benefit from a chat over a bottle of wine, arranged through a mutual friend.

They could sighingly agree about the importance of trust and communication and the regret they feel at not having tried harder when they had the chance. A mopey marketing director at the next table might chip in to note that he dumped his long-standing agency for a flashy new one that  showered him with attention and compliments, but now he wishes he hadn’t. They will all know better next time.

But still, these relationships keep breaking down. Last year, there were 156 major media reviews in the UK, according to the NewBizMoves database of client/agency relationship expert AAR. In 2007, there were 139 and, with difficult times ahead, agencies can’t afford to let those figures get any worse.

Not all those partnerships had run into trouble and not all of them were brought to an end. Many clients conduct reviews on a statutory basis and many hand the business straight back to the incumbent. Others just want to take the temperature of the market, perhaps at the whim of a new marketing director.

But when business does change hands, it doesn’t do so quietly. Vast, consolidated planning and buying accounts, often administered at an inter­national level, are great to win, but exceedingly painful to lose. And in the current climate, billings lost are hard to make up again. So what’s the best way to hang on to them in the first place?

“You have to deliver,” says Starcom UK Group chairman Jim Marshall. “You have to return phone calls. You must have the necessary levels of expertise and you need to develop that expertise, because the world is changing pretty swiftly.”

Client/agency relationships may be played out within a corporate framework, with heavyweight business objectives and large sums of money in the balance, but they are still essentially human relationships and familiar rules apply.

Colin Gottlieb, chief executive of Omnicom Media Group EMEA, says: “If you look at any relationship, whether personal or professional, the starting point for everything must be trust. There are hundreds of different elements that go into client retention, but trust is the central pillar, and commitment and competence play vital supporting roles. If you don’t have those three pillars, then you are in trouble.”

Reinventing relationships
Trust is the key then, but maintaining competence is perhaps today’s biggest challenge. Indeed, the world is changing so rapidly that the service guarantees of a two-year-old pitch are likely to have little in common with the demands of today’s multidisciplinary media market.

Hamish Pringle, director-general of agency industry body, the IPA, says many of the newer technologies are “black arts” as far as most clients are concerned. “An agency that says ‘can we come over and present on these new areas?’ is obviously going to get a warm reception,” he adds.

Most client retention advice is fairly generic and common sense. But, as Mediaedge:cia managing director Steve Hatch explains, that doesn’t necessarily make it easy to put into practice, day after day.

“It is not about knowing what to do, but actually doing it,” he says. “Client relationships are exactly the same as any other relationships. They need consistent values, but also constant reinvention.”

OMG’s Gottlieb believes the process of creating a good working relationship begins at the pitch stage. “What people call chemistry is really just trust,” he says. “Even at that early stage, the client is looking at your people and their reactions to certain questions, and you will already be building trust – or not.”

If the pitch team always went straight to work on the client’s account, there might be less to worry about, but the big guns of the new business team don’t necessarily always hang around for the everyday grind, to the consternation of clients.

“It is sensible to ensure your existing clients are happy first, before you start haring off after new business,” says Pringle. “Unfortunately, there is a strong tendency in agencies for the most talented people to thrive on the thrill of the chase.”

Often, Pringle suggests, a winning pitch will throw up more than enough interesting insights to keep the account humming for quite some time. But if the cupboards aren’t replenished after a given period, the call inevitably goes out for “fresh thinking” and the process begins again.
Even in the many instances where the ongoing strategic leadership of an account is sound, a weak link anywhere in the team can have catastrophic consequences.

Vizeum can boast that it has not lost an account in three years and has resigned only one – Paramount – due to a clash when it picked up 20th Century Fox. According to managing partner Stuart Newman, staff at every level share the task of retaining clients.

Staff turnover
“Everyone – down to the newest graduate – has to feel responsibility for the piece of business they work on,” says Newman. “It is all about the individual and, as soon as anyone gets a bit distracted, you have a big problem.”

An agency’s ability to retain its own staff is a key internal factor in its ability to retain business. At the very least, media agencies need to manage their staff turnover and ensure clients are kept well informed.

Mediaedge:cia’s roster includes clients such as Colgate and Just For Men that have been on the books for decades, through a series of mergers and changes of ownership. Dialogue and succession planning are the secret, says Hatch, along with an ability to troubleshoot your own annoying habits. “Work out what your equivalent of leaving the toilet seat up is and stop doing it,” he says.

The agency merry-go-round may appear to be speeding up. However, according to Starcom’s Marshall, the typical media account comes up for review roughly every three to five years. “In many cases, these reviews happen automatically,” he says. “At this point, a deep-seated relationship becomes very powerful.”

But there are reviews and then there are reviews. The average tenure of a UK marketing director is estimated at anything from 12 to 22 months and, while they don’t last long, they last long enough to get to work with their new broom.

Beware complacency
A new marketing director will frequently call a review for all sorts of understandable reasons. Some will have an ungovernable urge to change the status quo; others simply want to learn what the status quo is, while making sure it matches up with whatever else is available.

Either way, when the review comes around, complacency is fatal, warns AAR managing director Paul Phillips. “When you get a new individual at a client company, I would suggest to any agency that they treat them not as business to be retained, but as business to be won,” says Phillips. “The fact that you have been working on the business for as long as you have is not enough.”

Complacency can take many forms and, where a repitch is concerned, a long-standing incumbent should not underestimate the impact of a cluster of rival teams armed with new perspectives, boundless enthusiasm and a hunger for the win.

Phillips recalls a recent case where a new head of marketing called a multidisciplinary review on arrival. The incumbent media agency put up the team that worked on the account, whereas the advertising agency recruited an all-new team internally to make a fresh play for the creative business. The creative shop held its account; the media operation did not.

It is a Darwinian process, where the agency that can muster up the key qualities in the most impressive volumes will inevitably triumph over weaker competitors. But increasingly there are other factors, entirely beyond an agency’s control, which can induce a review and influence the incumbent’s ability to win it.

“In some cases, reviews are being provoked by procurement people who are seeking a cost reduction, so an agency can do all the right things and still fall victim to a review,” says the IPA’s Pringle. “That is very difficult, because they may just come back to where they started, having shaved a few points off the fee and caused participating agencies to incur very significant costs.”

Where the business does slip out of reach, there will often be bitterness and recrimination. But, like any wronged lover, an agency that has tried its best at the relationship can sometimes do a lot worse than simply blaming the other person.

“A marketing director once said to me ‘a client will get the agency it deserves’,” says Gottlieb. “I think that is very true. An agency can deliver everything it possibly can and then find the client doesn’t place any value on trust, commitment or competence.”

An agency on top of its game should be able to find common ground even in those difficult circumstances. But then again, in business as in love, there may be times when what you really need is just to find somebody who appreciates you more.

Retention is better than cure: 10 tips for keeping client relations on track

  1. Give the relationship firm foundations. It is easy to leap straight from a successful pitch into a flurry of work for the new client, but do take some time to set up agreed methods of working first.
  2. Schedule a regular 360° review of the account, where both the agency and the client have a right to raise any issues that may have arisen. Paul Phillips, managing director of the AAR, recommends both parties conduct such a review at least once a year.
  3. Encourage new business teams to share exciting research and resources that have been worked up for pitches. Existing clients are interested in the same kind of thing as prospective ones.
  4. Inhabit your clients’ business challenges. Read their trade press. And, obviously, also read your own.
  5. Make yourself irreplaceable as an adviser and source of information. Commission bespoke research and initiate long-term campaigns and projects. Vow to do something to add value for a given client every day and it will soon mount up.
  6. Where new clients are concerned, work hard to maintain the degree of care and attention that was present during the pitch, and never assume a long-standing client is yours for good.
  7. Hold onto your own talent and monitor accounts closely to ensure that everyone, at all levels, is equally committed to your clients’ various causes.
  8. Agencies repitching for accounts they already hold should treat them not as business to be retained, but business to be won.
  9. Bring in new blood for a repitch. The review may very well have been called because the client wants to see new ideas and your old ones probably won’t cut it.
  10. Know when you’re beaten. Sometimes a client has made up its mind to bring in new blood. If you think this is the case, you probably don’t need to pitch.
(source:  http://www.mediaweek.co.uk/news/876350/Client-retention-three-five-year-itch/)

Richard Reid is the founder of Pinnacle Proactive, Specialising in the Employee Assistance ProgramStress ManagementStaff Retention & Absenteeism. Take a Proactive Approach to Growing Your Organisation & its People. For more info visit http://www.pinnacleproactive.com

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