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.