Clients don’t really want to fire their ad agency

May 10, 2009

bobs…unless you give them reason to.

I have been in this business now for well over 20 years, and I am still amazed at how paranoid we agency people are about being fired by our clients. After having this discussion with many clients during the course of my career, I can tell you that the last thing they want to do is fire the agency. That is of course unless you have given them a reason or most often many reasons to consider doing so.

Most clients invest an incredible amount of time and effort not only choosing their agency partners, but more importantly educating them about the business, the product, the company and its policies and procedures. The last thing they want to do is go through that process all over again.

If you then add to this the fact that the procurement department is becoming more and more involved in the selection/negotiation process, many clients will tell you that they would prefer root canal treatment. In fact, during a recent discussion with the CMO of a very large client, she told me that she was currently putting up with sub-par client service from her agency to avoid a review.

So why all the paranoia? It seems like we both want the same outcome – that being a long term stable relationship. Yet the current research shows that over 50% of new client relationships do last past the 2 year, mark and 75% do not make it past 4 years.

One reason is that CMO’s have never been under more pressure to produce results in such a limited amount of time. With an average CMO tenure of 18 months right now, most of them know that they have 9-12 months at most to move the needle, or they are out. Sales are mandatory and excuses are seldom acceptable. It’s never been more about results.

I thought it might be helpful to give you two quick checklists. One covering tips on what to do to keep clients longer, and the other listing indications of when you should anticipate being headed for trouble.

Tips to help you keep clients longer:

  • Clarify expectations, deliverables, compensation and measurement at the outset
  • Staff the account with the resources that are both covered by the fee and provide client value at the same time (as determined by the client)
  • Present work that is innovative within boundaries, yet has the best chance of producing results. Support all proposals with actionable insights
  • Continue to be proactive, looking for new ideas to help them succeed. Remember other agencies are approaching them all the time
  • Minimize client service churn, and make sure that you conduct 6 month client/agency reviews
  • Avoid surprises such as cost over runs, agency errors, poor execution etc.
  • Look for co-marketing or partnership opportunities whenever possible. OPM (other people’s money) helps make budgets go further and your agency more valuable

Indications that you are at risk of losing a client:

  • Change in CMO or company leadership. 75% of new CEO’s conduct a review
  • Constant churn in client service and other key agency team members.
  • Product underperforming in the marketplace with poor sales
  • A constant stream of agency errors, arguments over cost estimates, and a client team who tells you that they hate the client
  • Reactivity and no proactivity. An agency of order takers.
  • Little to no senior agency leadership involvement/relationship with client senior management.
  • Another client roster agency kicking butt on the account while your work continues to produce unremarkable results.
  • The coup de grace … the trade press says your work sucks and the client seems to lack direction.
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The work ad agency clients ask for versus the work they buy

April 29, 2009

ad-agency-424Just like the client companies we work for, we too need to make sure that we are growing a profitable and sustainable agency. If we do not ,we will not be around long to service them. A key factor in being successful at this is developing and selling work that the client wants to and will buy.

How often have you heard a client say or read in an agency RFP the sentence…

“We are looking for fresh thinking and bold ideas. We want to shake the category up and stand out as a brand. We want a partner with unusual curiosity and a keen desire to challenge the status quo.”

For my part, I have seldom heard anything different. So, excited by the opportunity, the agency rushes back, tells everyone that this is a no holds barred assignment and that we expect only the best and most innovative work from them.

Usually three to six weeks later (depending on the generosity of the client) the most talented people in the agency descend on the client to unveil their epiphany. Three concepts are presented. The reco is the one that the agency loves and addresses the challenge square on. Concept two is good but not quite as good, and if you are a prudent agency, the third is the responsible one that will do the job but may not generate any fireworks or awards. The client picks the third and the team returns to the agency disillusioned. The CEO returns frustrated by the amount of money spent during the pitch prep searching for that Holy Grail. Sound familiar? I am sure it does and it should not be surprising.

Our clients need for managing risk in order to survive is far greater than that of an agency person.

It is the client that ultimately takes the hit for a failed risky idea and ultimately takes the hit from a career perspective. Yes, it may pay off but what if it does not? Surprised? You shouldn’t be. You have to consider the dynamics/culture in which your client operates.

I am sure that you have heard the statistic that the average tenure of a CMO today is 17 months. In essence that means that if they do not show positive results within 6-12 months of arrival they are doomed.

What you may not know is that in a recent CMO survey conducted by the AAAA’s ,only 21% of CMO’s claimed to have a good relationship with the CEO.

Is this an environment that promotes significant risk I ask you? In my opinion, not very often.

So the next time you are asked for “ground breaking work” I suggest:

  • Assess the client culture and environment for the apparent appetite for risk. Past behavior is often an indication.
  • Right now given the economic environment, everyone is keeping a low profile and avoiding being picked up on the radar screen. This is not likely to change anytime soon.
  • Brief the agency and deploy resources accordingly. You will only lose money chasing work that has little or no chance of seeing the light of day.
  • If you do propose innovative new ideas that require taking a risk, do everything you can to support those ideas with whatever real world proof of concept available to you.
  • Present the solid, get the job done concept first. Get them comfortable in the knowledge you have a good workable solution. Then take them to the higher risk solution supporting with proof of concept along the way.

We agency types often lament the fact that some of our greatest work lies dormant in a job folder somewhere because the client chose the lesser concept. Keep in mind that a significant amount of costly hours (money – your money) also reside in that folder, with no chance of ever being re-couped

So why not produce work that the client can buy and save both of you time and money along the way.