Editorial: The measure of client loyalty

When a client changes agency, strong passions are aroused. Publicly, the parting may be described as ’amicable’ but even when this is true it usually represents considerable upheaval for both sides.

When a client changes agency, strong passions are aroused.

Publicly, the parting may be described as ’amicable’ but even when this

is true it usually represents considerable upheaval for both sides.



For consultancies the old adage is still true: the best kind of new

business to win is new business from existing clients. It is possible

for an agency to operate on the ’revolving door’ principle as PRCA

chairwoman Jackie Elliot disparagingly describes it in this week’s

Analysis (page 7), but there is no doubt that this is an unhealthy state

of affairs. Time spent preparing for pitches, is time not spent on

delivering results for existing clients.



A Director magazine survey of PRCA members and their clients reveals

that smaller firms have retained the highest proportion of their clients

for five years or more. This has given ammunition to those whose small

size falls short of the new consultancy management standards. They argue

that client loyalty is a more important factor in determining agency

quality than, for instance, fee income or staff numbers.



But such statistics can be misleading. Project work has become an

increasingly important feature of PR consultancy income, which has

increased the client turnover for many agencies. And the last couple of

years have seen considerable growth across the board. For larger

agencies in particular, piling on new clients inevitably means the

number of clients held for five years declines as a proportion of the

total, even if none leave.



One also has to consider why clients and agencies part company. The

usual reasons are either client dissatisfaction, or a change of client

personnel or needs. Less frequently, the agency resigns to accept

business from a competitor, or because of a disagreement with the

client, or because the account is no longer lucrative enough. Of these,

only client dissatisfaction could fairly be said to be an indicator of

the standards of agency service.



But even then it may be wrong to rush to judgment.



For example, one of the most common complaints is the agency’s perceived

’failure to deliver’. The blame for this is usually pinned on the

agency’s over-promising in order to win the business in the first place.

This is sometimes true, especially if the agency is under pressure to

bring in new business to replace departing clients.



But too often, the client is failing to set realistic and measurable

objectives. Without sufficient resources devoted to research and

evaluation, too many clients will continue to imagine that their

agencies are failing to deliver, and too many will go through the

unnecessary heartache of a divorce.



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