It happens all the time. When clients come to you from another agency, it’s an opportunity to increase your revenue and prove your agency’s abilities.
When they leave your agency to go to another, it’s an opportunity to learn and improve… But why go through the experience of losing a client just to learn what other’s can teach?
Working with agencies, I’ve seen a lot of clients come and go. One trend occurs a surprising amount. While it seems like a reasonable move for business owners to jump between top agencies, I often see clients switching from some of the top agencies in the world and moving to relatively small agencies.
What would possess a business owner to leave a globally acclaimed digital marketing agency with a team of hundreds in favor of a small agency with fewer than 20 employees?
This leads us to the problem at hand.
The People Problem
As a business grows, it’s important to put processes into place. Without proper structure, without replicable systems, balls get dropped and the business can lose revenue and develop a bad reputation, eventually leading to a consistent loss of profit and eventually failure.
This isn’t the problem.
As a business grows and puts more focus on processes and systems, that business can lose sight of the customer experience. Focus shifts from external to internal and fewer balls get dropped with administrative duties, but relationships can suffer.
Relationships are the foundation of business. Without relationships, there’s not trust. Without trust, nobody is going to give you their money. Without money, you don’t have a business.
The problem seems to be that as businesses grow, they focus more on money and less on relationships. Their focus and motivation shifts toward the effect and away from the cause.
People are people, as I’m so fond of saying. People want to be valued. They want to be significant and they want to be loved and accepted. Even the CEO of a multi-billion dollar company is a person. If this CEO is made to feel undervalued, insignificant, disliked, or unaccepted, they will seek to change either their position, or the elements of their environment that lead to these feelings.
What This Means For Your Agency
All things being equal, this is what kills your client retention more than any other factor.
Not mismanaged expectations, not a slip up in process, not even low ROI (although you do need to deliver ROI).
The number one reason clients leave digital marketing agencies is because they feel like the agency doesn’t care about them.
This can manifest in several ways, but the complaints all indicate a feeling of insignificance. Let’s look at some of the ways clients (or ex-clients) describe their feelings.
Clients Leaving Large Agencies
Clients leaving large agencies tend to complain that they felt like a number. Every time they would have a call with their project manager, they felt like the PM hadn’t thought of them since the last call. They felt like the agency representative was “relearning” their business every time they talked.
This can happen for any number of reasons. Some of the bigger causes include:
1. PM is overloaded with too many clients
Payroll is ridiculously expensive. If it’s not your biggest expense, please share your secrets with the rest of us. The bigger your agency, the higher your payroll. Many agencies, attempting to balance profit and loss, load their employees to the max. PMs are given 50-80 clients or more, AMs are given 20-40 clients or more, and of course leadership has to juggle all of the clients AND the employees. With so many clients, PMs are forced to divide their attention significantly and often jump from one call to the next over and over each day. Details can often get jumbled and it’s hard to give each client your full attention, especially if there are fires to put out. It’s no wonder the PM is having to re-familiarize themselves with the accounts and metrics.
2. PM has a mix of large and small clients, and the larger clients get more attention
As we’ve discussed, it’s human nature to want to feel significant. A PM can get a feeling of significance from being trusted with larger (big budget) clients and it’s completely natural to want to give more attention to the large clients. You have to, in fact, give them more attention because there’s more data, often more services, and usually more frequent interaction. If a PM has a handful of large clients, it’s usually a pretty fair split of time, attention, etc. If a PM has several small clients and a large client or two, the little guys are getting hosed. No way around it.
The little guy wants more attention because they’re sacrificing more resources on a relative scale and it’s more risky for them to pay an agency. The big guy is actually paying for the time, though. The small clients don’t always see big wins or consistent ROI, and it’s less fun to talk to them and report on that data. The large clients can pay for their customers, and it’s usually easier to just maintain or optimize their performance because of sheer momentum. It’s way more fun to tell a client that you’re bringing them 1400% ROAS than it is to report on another month of 200% ROAS.
This is a tricky issue to solve, because some PMs will feel undervalued if they’re only given small clients. You really have to find those people who want to help the “underdog” clients. It’s not always a problem to give PMs a mix of large and small clients, but you’ve got to be very selective in the assignments so that you don’t give one PM a couple of smaller, needier clients if they also have to manage large clients that will need a lot of time and attention.
3. PM is not “wired” to be a Project Manager
Being a Project Manager is not a good fit for everyone. I did it for a year and a half before realizing how much stress it was causing. I was having to change dramatically from who I am, my core behavioral style, to do the majority of the work. I would often drop the ball or forget to perform certain tasks on time. I should have been fired many times over, and I was coming home angry, stressed, and mentally exhausted day after day because of my constant inability to perform my job well.
My only saving grace was that my clients loved me, I took the best call notes of anyone in the agency, and I was constantly finding new opportunities for my clients and up-selling them on new services. I would make suggestions to the AMs based on info I found in the reports, and even coach clients on UX and CRO opportunities for their website (something our agency didn’t offer as a service). I’m amazed it took a year and a half to transfer me to sales and strategy, but the eventual switch lead to dramatic results. Within 90 days I was a top strategist at the agency with an impressive close rate. I was performing audits for prospects that made it easy to sell them on services because of the myriad opportunities for growth and my ability to communicate those to the prospects. I even helped to launch new consulting services within the agency to provide more streams of income that were previously untapped.
I’m not saying all of this to brag on myself, but to illustrate what’s possible when you put someone in the right role based on their strengths and behavioral style. When a Project Manager is not a good fit for the role, the client suffers for it. It’s hard to give clients the attention they deserve when you’re just trying to stay afloat.
4. High Turnover
This is often a result of problems “1” and “3”, but there are really a lot of reasons to have high turnover. Either you’re firing bad employees, promoting good employees into other positions, or they’re leaving (for good or bad reasons). High turnover can be detrimental to the customer experience. Regardless of the internal difficulties turnover can cause, the client or clients that get passed around from PM to PM will feel undervalued and will seek significance (and better customer service) elsewhere.
Clients Leaving Smaller Agencies
Just as large agencies can unintentionally make their clients feel like a number, smaller agencies can have plenty of issues as well.
Some of the issues are similar to those of larger agencies. High turnover can be bad in smaller agencies. Small agencies can hire project managers that would be better suited in different roles. More often than not, the issues stem from rapid agency growth with limited employee bandwidth. Too many clients per PM, or some large clients being given to PMs that have smaller clients as well.
At times, clients leave smaller agencies because the business has outgrown the capabilities of the agency. The client wants to spend $15,000 per month, but the agency’s experience is in helping startups begin their digital marketing experience. The client doesn’t see the results they want, so they seek a larger agency. This is not as common as the issues mentioned above, but it can happen.
Generally, clients leave smaller agencies because they were not getting sufficient ROI, they did not understand what was being done for them, or they felt forgotten about. All of these tend to be a result of having the wrong people on your team, having poor processes (or no processes) to ensure consistent behavior, and poor reporting practices.
The Best Client Retention Strategy
There are ways that you can improve your chances of retaining clients. It’s not difficult to avoid all of the issues above if your processes have been constructed in a client-centric fashion. There are 3 primary elements to client retention that, provided you deliver excellent service and reasonable ROI, can make the difference between long term working relationships and lost opportunity. These are the big three:
1. Proactive and consistent communication
Having thorough processes from the start of onboarding to the ongoing management stages of client interaction make this an easy mark that gets missed more than you might think. Clients with a lot of experience with agencies will likely expect regular updates throughout the onboarding process. Clients without previous agency experience will be uncertain of what to expect. The latter is more likely to cause problems in the absence of information, but it’s important to be the first to reach out proactively and explain your agency’s processes regardless of the client and their history.
Being proactive in your communication will serve two purposes. You’ll build invaluable trust with your new client, and begin managing expectations. Trust is the true key to client retention and managing expectations will help establish essential boundaries to prevent wasting time with hand-holding or scope-creep.
Being consistent with communication, even it it’s only once per month, will serve to maintain the trust established at the forefront of your relationship. It doesn’t take much. As long as your client feels that you’re paying attention to them and you care, the trust will not just be maintained, but will be strengthened little by little. This is part of developing a strong working relationship with your clients.
2. Clear and accurate reporting
Reporting is one of the hardest things to get right in the client-agency relationship. A lot of agencies move from one reporting solution to the other, often finding one element or another that comes up short. Some agencies just create their own reporting platform to solve that problem.
Regardless of your reporting methods, accurate data should be your first priority, followed by clarity and user-friendly formatting. Inaccurate data is a surefire way to destroy trust quickly. It’s not the end of the world if there are discrepancies the first couple of reports, provided you’re up front about them with your clients and proactive in explaining what you’re doing to fix them.
Equally important is your ability to clearly deliver the data to your client. If you’re using a reporting dashboard, it may be a good idea to have a call to walk your client through the first report and answer any questions. This can help avoid confusion, miscommunication, misreading results, and can help put to rest any uneasy feelings your client may have about working with you.
In the end, if your client can access and read the results you’re getting them easily and often, you can avoid time wasting questions, develop and maintain trust, and prove how awesome you are.
3. Genuine care for the business your client is running
As dumb as people can be, people are smart. At least, their subconscious is. If people even suspect that you don’t care about them and the success of their business, they’ll dump you faster than a Hollywood wedding vow.
Genuine care is hard to quantify. There are subtle cues that agency employees can give off that indicate how much they care about their client. PMs (or any client facing role) have the largest part to play in this. The above elements of proactive and consistent communication and clear and accurate reporting are strong signals of care. Other signals can include doing your research and being familiar with the client’s products or services, industry terminology, and any personal details they may give away on calls.
Taking good call notes is paramount in showing that you care. “Remembering” details your clients have mentioned can go a long way in showing you care. Do they have any strong concerns about working with an agency? Have they mentioned being married, having kid, pets, etc? Depending on how personal they are on calls, this can be a great way to maintain trust and show that you care about them as a person, in addition to the success of their business.
That’s another big signal. Some business owners or marketing directors are the reserved, professional type. Some are the friendly, best buds type. Matching tone, openness, humor, and other social cues can be the difference between a client’s undying trust and loyalty. The important thing to keep in mind is that you can’t fake this. If you don’t care about the business, it will show. Hire your client-facing employees and accept clients with this understanding and it will make retaining clients much easier.
It’s not too difficult to get new clients. Business owners are leaving agencies left and right, and they’re likely to stumble across yours. The trick is to keep the clients you get. To help them grow, and grow with them. The best opportunities for extra revenue are your current clients, if they trust you enough to take that next step.
Understand how to build and develop that trust, and you’re positioned ahead of 95% of agencies in the world.