The current state of agency-client relationships is not good, and it's affecting your new business efforts.
I touched on agency-client relationships a while ago in the context of agencies being “ghosted” by clients. One of the things I addressed was the importance of building processes that support positive agency-client relationships across the client lifecycle. That extends beyond the domain of agency new business, which is what I generally focus on, but that’s where it starts.
After the business has been won and the new client has been onboarded, the quality of the client-agency relationship continues to have an impact on agency new business in a number of ways, including:
- Negative agency-client relationships can damage future new business prospects by word-of-mouth reputation.
- Positive agency-client relationships can create opportunities for recommendations, case studies, data sharing, and testimonials, all of which are valuable assets for future new business efforts.
- Poorly managed agency-client relationships create additional pressure on the new business team for their efforts to yield results quickly, even from less-than-ideal opportunities.
- Successful agency-client relationships generate greater opportunities for mutual “wins,” potentially giving agencies better performance metrics, awards, and media attention, all of which are important from a new business perspective.
The declining health of the client-agency relationship
In the ‘80s, the average client-agency relationship tenure was 7.2 years. In the ‘90s, it was 5.3 years (Bedford Group). By 2017, the average client-agency relationship tenure was 3.2 years (R3, in The Drum). For small to mid-size agencies, it is almost certainly shorter.
Not only is the duration of the agency-client relationship shrinking, but its perceived quality has suffered as well. In 2015, 70% of agencies reported improvements in the client-agency relationship, but by 2016, that number had dropped to 53% (Forrester/SoDA Report). There are many reasons for the damaged client-agency relationship, but a common theme is the lack of trust between clients and agencies.
To address the lack of trust, here are two key areas agencies can prioritize to improve their client relationships:
This starts by clearly outlining expectations upfront for goals, success metrics, responsibilities, reporting schedules, response times, preferred communication channels, and appropriate contact parties. It extends throughout the relationship, requiring accessibility, clarity, and the ability to openly share and accept honest feedback (in both directions) without having to worry about jeopardizing the relationship. When there is no safe space to engage in an exchange of ideas and direct, constructive feedback, the work suffers, as does the relationship.
It’s imperative that both parties are able to be honest with each other — about work, about deadlines and budgets, or whatever it may be. If you need to embed a team onsite to facilitate better communication, then figure that out, because if you can’t nail the communication the account is as good as gone.
It’s easy for agencies to become complacent after a certain amount of time with a client. Sometimes they learn that their extra efforts won’t be well-received, or they may be scared to rock the boat, so they withhold their honest professional opinions to avoid conflict. Other times, they may get a little lazy and take the account for granted, so they stop putting their best work forth. Agencies must be vigilant against this.
It's not just about effort and quality of work. For a healthy ongoing client relationship, the agency must constantly be focused on demonstrating value. That means not just focusing on the work itself, or even the strategy behind the work, but always having an eye on the work’s value and bottom-line business impact.
How can you nurture healthier agency-client relationships across the client lifecycle?
It is possible to create an environment that is more conducive to client-agency alignment and longevity. Prioritizing healthy client relationships starts with agency leadership. When it is prioritized at the top, and repeatable processes are put into place, healthy client relationships are more likely to flourish.
Here are some practices you can implement to strengthen relationships with your agency’s clients:
- Disqualify prospects that aren’t ready to invest equally in the relationship
- Improve your onboarding process by setting clear expectations for ongoing communication, the relationship, and success metrics
- Measure client satisfaction on an ongoing basis
- Address problems as they arise; don’t wait
- Set a higher bar for account management and invest in relationship-building
- Include clients in agency social functions and planning events throughout the year
- Work to minimize employee turnover (nurture agency culture and build loyalty within your team)
- Stay up-to-date on client challenges and continue delivering business solutions for them
- Communicate your gratitude and appreciation for your client’s business
- Invest in building your team’s listening and communication skills
How can you select client partners who are more likely to invest in the relationship?
During the qualification process, work to disqualify prospects who:
- Have a reputation of being undesirable clients
- Have a history of short-term engagements and a fickle approach to agency relationships
- Are misaligned with your agency’s culture and people
- Who give you an indication they won’t be equally invested in building a successful relationship
- Who are looking for a vendor, not a partner
- Who don’t prioritize open, honest communication
Certainly, there are limits to what an agency can do to support its client-agency relationships. A relationship is a two-way street and requires equal investment from both parties. One of the biggest obstacles to healthy client-agency relationships is the low tolerance for any imperfection or friction on the part of clients. That’s even more of a problem considering the best possible agency-client relationships by definition require conflict. Conflict, push-back, and the freedom to give honest opinions and push the boundaries all lead to disagreements and frustration — but they also lead to the very best work (as Anselo Ramos observed in his discussion of the four types of agency-client relationships).
That aside, it makes sense to have the processes in place to be ready for those clients who share your commitment to building a lasting relationship. And with good qualification practices upfront in the new business process, you can focus your agency’s resources on clients that are more likely to fit that description.