Agency doctor: spend more effort on keeping and growing your existing clients

It makes sense to work out where your client relationships are strong and where they need work, and develop a strategy to keep your most valued clients loyal.

Richard Houghton: Associate partner, Agency People
Richard Houghton: Associate partner, Agency People

I have always found the new business process exciting, rewarding and depressing in equal measure. Sorting out the brief, identifying the insights, developing the strategy and programme and the theatre of the pitch are the good bits. The ever-growing shortlists, inscrutable reasons for one agency being appointed over another and the constant refrain that you came ‘a close second’ all make me want to hit my head against a wall.

So with the huge amount of energy and cost that goes into winning a new client, why don’t all agencies put as much effort into retaining and growing the clients they have? You can find a number of examples of agency-client relationships that last for decades but in my experience three to four years is considered to be a good run these days and many are much shorter.

It makes sense to have a strategy to increase client loyalty, up fees and ideally develop services from which client and agency can benefit.

Stopping to consider where your clients are on the defection to loyalty continuum is a great start. The first step is developing criteria to allow you to assess whether the client relationship is close to ending (defection); operational but not secure (transaction); solid but not yet strategic (partnership) or of mutual strategic benefit with real personal relationships (loyalty).

The price of client defection

These criteria can be used to map the client portfolio on a grid that shows where the client relationship is, and cross-reference it with the range of agency services that are being purchased by the client. And yes, you guessed it: those client relationships sitting in defection and transaction are nine times out of ten those that are buying the smallest range of agency services. So you need to look at your client loyalty programme as a solid part of your sales strategy.

What are the symptoms of an unhealthy client relationship? For those clients in the defection and transaction boxes you will see unusual pressure on prices, heavy involvement of procurement, the need to tender competitiv­ely for new projects and short-term visibility (projections) of your fees. Not much long-term planning is going on. All this is combined with little access to senior management, either
marketing or operational.

As you move the relationship towards partnership and loyalty you should start to see fee levels stabilise; a heads up from the client on how best to handle the procurement guys; additional revenue opportunities without the need for a formal pitch and revenue visibility extending out to the medium term. Once you have the client’s confidence, access to senior management and the longer-term plans for the client business often follow.

The initial mapping exercise will often see a clustering of clients in certain relationship types, say in transaction. This can be a reflection of the sector in which you are operating, the operating style of that particular account director or the culture of the agency as a whole.

Having done the mapping exercise, the next step is to work out which clients you want to move up the value chain towards partnership and loyalty; which ones you are happy to leave in defection and which ones (if not all) of those in the loyalty box you want to protect.

Know your strengths

So now you know what your priorities are, it is wise to get an understanding of how the account teams see the relationship and what the areas of strengths and weakness are. This can be done simply by using a spider diagram with the six or ten key criteria against which you wish to measure the relationship.

These can include understanding of client business; project management; return on investment and insight generation. Of course, you would want to include the client’s understanding of, and interest in, your agency proposition.

I am firmly of the belief that a face-to-face meeting with the client is the best way to understand where the client relationship is. This can be done by a director not on the account or an outside consultant. The account team’s views and the client’s feedback are then compared and an appropriate plan drawn up.

I’d recommend repeating the process every six months, with an informal chat to track progress every three months. I’ll let you into a little secret. Almost all clients will think you are good to work with but lack strategic insight or creativity.

Once you have a client loyalty process in place, you can be confident that you really know what the state of your relationships is and thus the reliability of your fee forecasts. While some of the feedback may not be welcome, it is always valuable and should be acted on if you see your agency as a partner rather than a supplier.

Richard Houghton is associate partner at Agency People

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