People buy based on emotions, not rational thought.
You know this to be true when it comes to “consumer audiences,” but somehow, it fails to apply in client situations.
Consider this: A client expresses his frustration about missed deadlines and miscommunication. Your response is to point out how the client missed approval timelines. You reference emails and phones call where the client made more revisions and asked for more time. You don't blame the client, but you make it clear why the deadline was missed.
That should convince them of your ability to deliver on time, right?
“An agency is really only as good as their client's perception of their work,” said Dory Ford, cofounder of Hallway Talk.
In the service industry, the client’s perception is the only thing that really matters, which is why Ford and Penny Jo Welsch founded client retention consultancy Hallway Talk in late 2014. They perform reviews to reveal how a client actually feels about an agency and help address the breaking points in the partnership.
"You would never want to create a campaign for one of your clients where you didn't have insights into the buyer's behavior," Ford said.
Why Client Reviews Are Important
Client retention is a growing issue, and Welsch and Ford believe it should be as important as new business for a few different reasons.
The average tenure of a client relationship has decreased.
It’s difficult to get accurate data on this number, but The Bedford Group has an often cited calculation: “In 1984, the average client-agency relationship tenure was 7.2 years. By 1997 (13 years later), that number declined by 25% to 5.3 years. Today, the average client-agency tenure is thought to be less than three years.”
This is especially troublesome when you consider the next point.
The cost of pitching is becoming more prohibitive.
“Agencies have failed to focus on retention because there was always another account you could get,” Welsch said.
Now, agencies are more concerned with how much they are spending to land a new account.
Welsch cited one agency executive who said they would spend more than $500,000 on a pitch. Others cite numbers closer to $200,000 or $100,000. Even if you only calculate the agency’s cost to create a proposal, the agency is putting in at least $3,000 (30 hours X $100 per hour) -- at a minimum.
These investments don’t guarantee a new client -- obviously -- and it means that agencies can lose an account before it's even profitable for the firm.
Talent retention is a top concern.
Agencies are facing competition for high-level creatives from the tech industry, which has been able to compete on flexibility and salaries in a client-free environment. If you have a high retention number you can tout to potential and current employees, people will be more likely to make a longer term commitment if they aren’t concerned that their job will be cut with the next account review.
Communication is more complex.
Email. Text. Messenger. Collaboration software. Social media. There are just more ways to communicate, and most of this is through writing -- a form void of inflection, tone of voice, body language, and other cues that communicate emotion and meaning.
In addition, the things we are talking about have also grown in complexity. Discussing mobile strategies, programmatic, native formats, conversion tactics, user experience, and other technical terms are difficult, and when you rush off a quick email, it's easy to make a mistake.
5 Key Areas to Cover in a Client Review of Your Agency
It’s not that agencies don’t ask tough questions. It’s hard for anyone to provide honest, constructive feedback directly to a partner.
“People don't like confrontation,” Ford said. “They want to be liked, and they want to be perceived as team players, and they don't want to get someone in trouble by criticizing them.”
Hallway Talk’s client review could be considered a type of therapy for brand marketers who manage too many relationships. Ford and Welsch provide an outlet for everyone from the CMO to entry-level marketers to voice both the good and the bad about their partners. But just as important is the fact that Ford and Welsch listen and really hear the concerns of the brand-side employees.
To uncover the underlying feelings about the agency, they discuss five main areas when conducting a client review:
How do people speak about your agency in the halls? What is the tone or themes of conversation concerning your agency? This is about reputation, not reciting what was written in a formal feedback form.
This is an easy way for Welsch and Ford to start off the client review. People are more forthcoming about what other people are say.
This will also tell you the opinion of people who don't work directly with your firm. Do people in finance think you are overpriced? Have people heard that you are ineffective, lack knowledge, or are unorganized? Are you creative? Do people love working with your people?
In this area, it is also important to gauge not only what the sentiment is now but also how is has changed. What was the tone six months ago? Why do people think the attitude has deteriorated or improved?
The results are about the product and process of delivering. What results did the client see? Did your work increase leads, sales, or engagement? Did the project meet the client’s goals? Was there issues with timelines and delivery? Did the client like the process for feedback and revisions?
Asking questions around this area is about understanding the client’s view of the value of your agency and the experience of working with your firm.
As important as understanding how your agency is doing now is gaining insight into the future. Going through this part of the review provides the team with a crystal ball said Ford.
It helps management to understand if the agency is structured to grow with the client, which is oftentimes a reason for churn.
Ask questions such as: Do you expect the agency to be an expert in other areas? Do you have confidence in the agency’s capabilities? What projects or other areas of your marketing do you wish the agency could handle? What types of services do you project you will need in the next 12 to 18 months?
You know that client chemistry is the key to winning new business, but this intangible will also determine the length and health of your relationships.
How does the client feel about your people?
“We cover this in-depth, giving the client every opportunity to point out areas for improvement or agency members who should be recognized for how valuable they are,” Ford said.
Ford said that while there are situations where personnel issues are brought up, just as often, unsung favorites -- an account manager or coordinator who is holding the relationship together -- are revealed. They ask about every single team member, so even if the client doesn’t mention someone, Ford and Welsch still prompt for a review of the person.
“It's helping people with long-term careers within the agencies because now it's been pointed out where their training could be supplemented and where they can do a better job,” Welsch said. “The client's happier, and the agency's happier, and the person actually has a better career path and growth because of it.”
The question is a simple one: How happy are you?
The answers are what makes things complicated. If the client is unhappy, that's obviously a "stop everything" problem. If the client states that he is happy, you still need to figure out why and what is resulting in this feeling -- perhaps you could replicate it with other clients.
Sometimes, during this questioning, Ford and Welsch discover that the client will have to change agencies: This could be due to mandates from higher ups or because of a change in focus. If this information is brought out into the open, there can be benefits for the relationship, including determining an exit plan and putting processes in place to make the transition more smooth.
A Chance to Understand
A client review should serve as a starting point for actions, not be seen as source of negative feedback. If the relationship is broken, the feedback will provide a roadmap for reconstruction. If the relationship is healthy, you can gain a sense of assurance and highlight to your clients that you value open communication and feedback.
However, a focus on client retention -- with frequent check-ins, ongoing dialogue, and a fixation on loyalty -- requires a change from the entire agency. This starts with the leadership team, who need to operate as though retention is as imporant as the shiny new client. This should be reflected in yearly or quarterly company goals and wins in loyalty should be celebrated, just like new accounts.
Retention is about changing the culture of the business to value not just accounts, but people, including their opinions about the type of relationship they want with an agency and their perception of your firm.
"It all comes down to the fact that clients are people and agency people are people," Ford said.
And sometimes, people just need someone to ask the right questions and actually listen to their response.
Originally published Aug 24, 2015 9:00:00 AM, updated July 28 2017