Client Churn Causes 70% Of Ad Agencies To Miss Their Numbers!

miss their numbers final

If your agency has previously omitted preparing “Key Account Plans” as part of your overall agency growth strategy, these recent survey findings may convince you to do otherwise!  

In my recent national online survey (Ad Agency Business Growth Strategy Survey), I found that 57% of respondents admitted to having missed their financial numbers over the last three years due to an unexpected client loss. Another 12% claimed that while they had hit their goals, the client loss had significantly impacted their overall performance for the year.  

Based on in depth analysis of the survey information, I found conclusively that failure on the part of the agency to include “key client account plans” in their agency growth strategies, was a major contributing factor. Here are some additional findings and supporting details.

50% of total survey respondents indicated that they currently do not have “key Account Plans” in place for their top 5 agency clients. Interestingly, there is a very high correlation between these respondents and those agencies that indicated they had missed their numbers due to unexpected client churn. In fact, 87% of the respondents who said they did not have “Key Account Plans” for their top 5 clients, all had instances where they missed their financial numbers over the last 3 years!

Next, I took a deeper look at those respondents (62% of total sample) who answered yes to having clients within their agency that either run at a loss or alternatively break even at best. Just over 70% of this group also answered “no” to having key client plans in place.  

Finally, I took a look at the respondents (31% of total respondents) that answered affirmatively to having a nightmare client in the agency that their staff hates to work on. In this case, 84% of this group did not have key account plans in place for their top 5 clients.

These survey findings clearly indicate that, the omission of key client plans from an ad agency’s growth strategy can have a significant impact on its financial performance. Absence of these key client plans substantially increases the risk of the agency losing a key client, as well as increasing the incidence of poor performing clients within the agency client roster.

 If you really think about it, this should come as no surprise to any of us! In the absence of a plan how do we:

  • Plan and focus the resources needed to support our clients?
  • Consistently stay pro-active and deliver innovation?
  • Maintain client satisfaction levels, keep ahead in their category and deliver incremental value?
  • Plan and execute against organic growth targets and opportunities?
  • Integrate metrics, measurement and results into our work?
  • Optimize resource allocation and management. Making sure that we do not either under or over service the account?
  • Focus resources and effort in the areas that THE CLIENT deems of value versus what the agency values?

Bottom line! Client retention and churn management is without doubt one of, if not the most important pillar of any agency’s growth strategy. Unfortunately, most agencies do not allocate anywhere near as much focus and resources to it as they do new business. Many even overlook it altogether.

My 5 pillar agency growth strategy approach enables you to consistently deliver superior agency growth and profitability.

 

 

 

 

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