Client retention reflects results

How many clients do you lose each year? We'd like to say none, but that's not realistic.

How many clients do you lose each year? We'd like to say none, but that's not realistic.

Of course, agencies pride themselves on client loyalty and retention, which sets up an inherent conflict. When you lose a client, who is to blame?

We specialize in business-to-business technology, with a focus on creating new markets for venture-funded companies. Almost by definition, this means that some – sometimes many – of our companies will fail somewhere along the way.

Prolonged economic downturns simply accelerate what a strong economy might hide.

In 2009, we said goodbye to about 20% of our base. That seems unacceptably high, especially given how much it costs to attract new business, compared to organically growing with satisfied clients. In my experience, $15 million in revenue is a make-or-break threshold for early-stage tech companies.

Stay there too long, and revenue stalls, then drops, and the downward cycle quickly follows.

Some of the companies that said goodbye, along with many others we've worked with, have had layoffs along the way. Occasionally, they've cut back on PR as part of this -- sometimes by 20%, sometimes more. Almost always, our clients lay off staff before they cut PR. That's an enormous commitment and responsibility for both them and us.

But isn't any cutback a signal that we're not doing enough?

It's tempting, when looking at lost clients, to find excuses for each one: executive transition, inferior marketing, competitive mergers that marginalized the company, lack of leadership, not enough control over sales, or, my favorite, “It was just a project.”

Let's be honest. Keeping score is like getting on the scale. As long as the floor is level, the numbers don't lie, and words don't count. The simple answer is that any time a client cuts back – even if they keep you– it's because you're not delivering the kind of results that put that question off-limits.

Amy Bermar is president of Corporate Ink.

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