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Why do agencies lose clients?

A recent post on Reddit questioned why clients leave their agencies, so Chip and Gini decided to tackle the topic on this episode of the Agency Leadership Podcast.

Usually, agency-client relationships don’t end for one simple reason, but rather an accumulation of factors. Some of those can be traced back to the process of winning the business, while others may develop along the way.

Chip and Gini argue that agency leaders should focus their efforts on addressing the things that they can to improve retention, but accept the fact that sometimes an account will leave for reason’s out of the agency’s control.

Key takeaways

Chip Griffin: “Your job in order to improve the retention of your clients is to do everything you can on your side of the equation so that you can minimize the risks. Produce the best results that you can for the client, and then be aware of those things on their side that may trigger potential issues for you.”

Gini Dietrich: “A massive issue for ad and PR agencies is they bring in the leaders or the salespeople or the really polished people and sell the business and then they bait and switch it so that the junior level people come in and do the work. And it never works.”

Chip Griffin: “Clients are people too. And they’re just like you are as an agency leader, you don’t want to have a difficult conversation with an employee. You don’t want to have a difficult conversation with a client. Clients don’t want to have difficult conversations with you either.”

Gini Dietrich: “I have found that when the team is part of the whole process, sometimes they’re more invested than I am. And they’re excited about working with the client because they’ve been through the whole process and they got to present ideas and they got to talk to the client. And so they’re invested in the success from the beginning.”

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin

Gini Dietrich: and I’m Gini Dietrich.

Chip Griffin: And Gini, I’m afraid that you are going to lose me as a client of this podcast. Does that work? Do we have clients?

Gini Dietrich: That actually works for me. Okay.

Chip Griffin: All right. Okay. Well right after this.

It’s possible. That’s one of the more tortured openings that I’ve had.

Gini Dietrich: Yes, I very much enjoy your segues most of the time, but yeah.

Chip Griffin: I couldn’t really think of a good way to lead into the topic. We are, of course, talking about losing clients and why agencies lose clients, but that didn’t really come across in the open nor was it really all that funny or amusing like that.

So we’re off to a grand old start today. But as we’ll talk about later, that’s one of the reasons you lose clients because you got out of the gate wrong. See, now I brought it right back, I’ve recovered. Gini, I’ve recovered.

Gini Dietrich: You did recover. Yes, you did. You did. Yeah. So on that note, the topic is why does a client decide not to work with your agency?

Or why did they stop working with your agency? I feel like that’s the same question. Asked two different ways, but why does it stop working?

Chip Griffin: Well that makes sense because where did this come from, Gini?

Gini Dietrich: Reddit, my very favorite place on the internet. Yeah. It’s my favorite.

Chip Griffin: There are worse places on the internet.

Gini Dietrich: I don’t think there are. Reddit’s pretty bad.

Chip Griffin: Listeners, please do not send any emails to Gini showing her worse places on the internet.

As easy as that may be to do, please do not do that.

So why do they stop working with your agency, Gini, or any agency? Not your agency. I mean, nobody ever leaves Arment Dietrich. I mean, let’s just, accept that.

Gini Dietrich: That’s not true. I would say for myriad reasons, you know, maybe leadership changes, especially at the marketing level and the new leader, the new chief marketing officer VP of marketing whoever happens to be, wants to bring in their own team. It makes sense. It could be because there is a merger or acquisition, makes sense. It could be because the business has sold or they’ve gone public, usually you’re, you know that that’s coming so you can prepare for it. And then there’s also reasons of non poor performance or not performing, or, you know, the same reason you might be fired from a job.

You can be fired from working with a client as well.

Chip Griffin: Well at the end of the day, and I know I say this a lot when it comes to almost every kind of problem, but it’s usually not just one thing. Right? Right. There’s not just a single cause of the client leaving your agency. It’s usually an accumulation of things on their side, on your side.

And so your job in order to improve the retention of your clients is to do everything you can on your side of the equation so that you can minimize the risks. Produce the best results that you can for the client, and then be aware of those things on their side that may trigger potential issues for you.

And then you have to figure out how to handle them.

Gini Dietrich: Yeah, absolutely. And you know, I mean, there are lots of things that you can put into place to protect yourself. There was a conversation in the Spin Sucks community probably about a week ago, asking for advice on how to handle a client who didn’t want to- who was firing the agency, but didn’t want to abide to the 60 day termination clause.

And so there’s things like that that you should put into place to protect yourself. And I am of the belief that if a client signs a legal document saying that there’s a 60 day termination clause, they should abide by that. And you know, some, some agency owners piped in and said, well, you know, is it worth it for the 60 days transition and blah, blah, blah.

And I’m like, listen, you can pay me. I don’t have to necessarily have to do the work. I can transition everything tomorrow, but you still have to pay out the contract. So I’m kind of a stickler on that one. Yeah.

Chip Griffin: And we’ve had this debate before. It is one of those areas where we have a slight difference of opinion, not a dramatic one, but I, to me, I like having those clauses in for leverage, but I think that that everything should be case by case, but we’re not going to rehash that argument because we’re talking about how we get to that point, not what to do once we’re there.

Gini Dietrich: Yeah. And so my point is that you, you should have things in there to protect yourself, but there are, I mean, usually when you lose a client, you know it’s coming, you may not know it’s coming tomorrow or 30 days from now, but, you know, especially if it’s a change in leadership or the company has been sold or they’ve gone public, or there’s an M & A, or you’ve had conversations where the client’s not happy.

And so, you know, it’s coming, it’s not, it’s usually not a big surprise when it happens. And like I said, there can be lots of different reasons that it will happen.

Chip Griffin: Yeah. And, I think that, you know, it, to me, a lot of it goes back to before they were even your client. And you really have to be mindful of the conversations that you’re having with prospects to make sure that the expectations on both sides are in alignment.

And you have to make sure that there’s some real chemistry, frankly, between the client and the agency. And a lot of times on the agency side, we just want to get that business no matter what, right. And we’re not necessarily going to go out and lie, but we might fib, we might not be, you know, completely open about how little experience we have in the particular thing they’re looking for or how we think maybe their strategy isn’t really the right one because we just want to win. Right. We want that money. And so you have to be really mindful of that because a lot of times, if you go look at a client that’s been lost, a lot of the issues end up tracing back to before they were a client, as well as during the onboarding process, because those are two opportunities right up front to set the expectations and make sure there’s a true meeting of the minds.

Gini Dietrich: Yes, I agree with that. And you know, we’ve talked about this before, but I’ve gone. I’ve just gone through an agency search process with a client and it has been a painful experience. Um, but also we have asked each – each agency that has, that we have talked to that we’ve interviewed, we’ve asked them if we can meet the team that we would work with because every single one of them sent in a very polished salesperson who said the right things and was willing to go the extra mile and all those kinds of things.

But we know that that person is not, who’s going to work with us day to day. And every single agency pushed back and said, no, you don’t get to meet the team. You can’t meet the team until you sign a contract. You can’t meet the team until you sign a contract. I finally said to every one of them, we are not going to sign a contract until we get to meet the team that we will work with, because these are the people we work with every day.

And so much of what this is is can they do the job? And is there enough chemistry to be able to, to excel and do what we need to do? And if we don’t get to meet the team, I can’t make that decision. And it’s become very clear. The reason we don’t get to meet the team is because they’re not polished and they’re not ready.

And so all of that to say that you’re right. It’s, it’s in the expectation setting and it’s in the, the reason that the things that we do because we want to win, but also you have to prepare your team to be able to have conversations with a prospect and to be able to showcase their expertise in the new business process.

Because if you do that bait and switch after it’s sold, that is one thing that is one reason. And that’s a massive issue for ad and PR agencies is they bring in the leaders or the salespeople or the really polished people and sell the business and then they bait and switch it so that the junior level people come in and do the work and it never works.

It never works. Right. You have to put the team that would be working with the client in front of them. And that, I think that is a must have so that you don’t risk losing them six months from now.

Chip Griffin: Well and it’s, it’s particularly important for small agencies where the owner is doing all or most of the pitch and then plans not to be involved day to day.

Right. And, so you, you cannot go in a reasonable way from being the only face of the agency during the pitch process to un-involved a month later after they’ve come on. Right. That simply doesn’t work. And I know I talked to a lot of agency owners who say, well, you know, I’m just going to help onboard them.

And then I’ll transition out. I mean, that’s even worse, right? Because now you sold them. They’ve seen you in meetings and now you’re trying to pull yourself back. So you’re much better. I mean, they’re obviously in a small agency, sometimes there’s a necessity to do these things. In those cases, you just need to be absolutely crystal clear with clients upfront.

This is what’s happening. I’m helping you on board because we had to move quickly or whatever, whatever be honest. Even then it’s still difficult because clients hear what they want to hear. I’ve said before our clients are kind of like children, right. And so they hear, oh, you’re going to be there.

Cool. You said for a month? I’m sorry. I heard a quarter. I heard a year.

Gini Dietrich: I didn’t even hear that.

Chip Griffin: Oh, I didn’t. There was a time limit – news to me. I thought you said you’d do everything I asked without asking for more money. Yeah. Okay. Anyway, so really make sure that they are seeing that team. And it’s okay to say, you know, this is the team if you were to come on board today, this is the team. If you wait six months to say yes, it could be different. Right. They should get that. But if you want to say that, if that because, sometimes I’ve seen agency owners say, I want to hold back because I don’t know when they’re going to say yes and who’s going to be available.

Fine. So, so explain if it happens soon. This is the team that it will be. I can’t guarantee you that this would be the team in three or six months because you know, we’re in demand, we’re picking up clients regularly.

Gini Dietrich: I think that’s totally fair, but you know, I came from the big agency world and they always sent out partners or the VPs to win the business.

And then they handed it off to us kids. And I’m telling you not one single client was happy about that arrangement ever. So it’s not just in small agencies it’s in big agencies too, where they trot in the really polished, experienced people to win the business. And then they hand it off and go onto the next and not one client is ever happy about that. Ever.

Chip Griffin: No. And it’s, I mean, in fairness, this is not always a bait and switch. I mean, sometimes it is, right. Some, there are some agencies that are bad actors that go out there and they’re intentionally maybe not trying to deceive, but they’re intentionally, they’re willfully misleading. Let’s put it that way. But in some cases, it’s just, you know, the agency owner or the VP or the partner says, I don’t want to waste my team’s time on the business development.

I want them to be servicing clients. It’s my job to be out there being the Rainmaker. And so they view it as them taking one for the team, by being the one out there. That’s wrong. But it also, it stunts the development of your team, because you should be helping them to grow. And business development is a great way for team members to grow because it forces them to think differently.

It forces them to communicate effectively. There’s so many benefits to having all the members of your team involved in business development that you absolutely should do it. And it will absolutely 100% help with retention. If the same team that’s involved with the pitch is continuing to work with the client. Once they’re a client.

Gini Dietrich: And I would add that at this is, this was a big lesson for me as an agency owner is I would go, I would have conversations. I would, I would talk about the things that we could do. I’d put together a proposal, I’d win the business and then I’d hand it over to my team to do the work and my team would be like yeah, I’m just not excited about this. And I’m like, no, you have to be excited. Like this is cool. And they just didn’t have the same level of passion or investment in the client just because they hadn’t been along for the ride. So they hadn’t heard the stories yet. And they hadn’t seen the product yet, and they hadn’t seen the process yet.

And they were just being told to do the work. My team was like, I mean, yeah, I’ll do the work, but it’s not exciting and I’m not excited about it. And I have, I have found that when they’re part of the whole process, sometimes they’re more invested than I am. And they’re excited about working with the client because they’ve seen, they’ve been through the whole process and they got to present ideas and they got to talk to the client and they got to do all of those things.

And so they’re invested in the success from the beginning.

Chip Griffin: Well, and it can also help you put together a better proposal with better pricing. More accurate pricing because here’s the thing. If you’re an agency leader who is doing a good job of delegating and getting your team involved in things so that you’re not micromanaging everything, there’s going to be a lot of the work that’s being done for a client that you don’t really know the details of.

And you don’t know exactly how long it took, you know, how long it took you three or four years ago to do it. You don’t know what it’s taking your current team today to do it, given all of their existing realities. And so that means that you need to have them involved to help you figure out how many hours, what kind of timeline is reasonable, all the things that you’re putting into your proposal to win the business.

That will be more accurate. If you’ve got more team members involved and the more accurate it is, the happier the client’s going to be, the better your bottom line is going to be.

Gini Dietrich: And the happier team too. They’re happier, too.

Chip Griffin: Absolutely, yes. Right. Because, because when you’re unhappy with the bottom line or when the client is unhappy with the timeline or the work product, they’re going to be yelling at your team first and you second.

Right? So you, you really want to set them up for success. You know, a lot of this also leads to one of the biggest things that I hear clients say when it’s not because, you know, we have a new leader or something like that, or it’s not a budget thing, or, you know, we just got sold. But when, when a client comes to an agency and just says, it’s time for us to move on this, isn’t really working for us.

One of the key things that I’ve typically heard myself or from the agencies that I advise is we just felt you weren’t being proactive enough. And, and I think that they’re often correct, but that’s really a symptom and not the cause. When I hear a client say to an agency, you know, I’m not happy because you’re not being proactive enough.

What it usually to me means is that for some reason, the agency is turtling. And they either realize that the work that they’re not doing is, is not up to par. And so they don’t want to do anything that, that raises their profile. Right? Cause if you’re going to be proactive, it means asking for a meeting with a client to suggest something new, which most agencies then view as an opportunity for the client to say, but hold on a second, we don’t like A, B and C that you’re already doing.

Why would we say yes to that? So that’s reason number one. Reason number two is, is because of over-servicing right? And so we often hold back ideas from clients that we’re already over-servicing because we’re afraid we’re just going to end up getting more without getting more money. And so to me, when you hear that you really need to be thoughtful about it, but you do need to be spending time as an agency, as a team thinking proactively for your clients, because that will help with retention.

And if you’re really being strategic in your proactivity, you can not only make a good impression on the client. Sometimes you can use that to redirect your work so you can get rid of some of the stuff that’s out of scope or reduce the total amount of work that you’re doing by saying, Hey, you know, we’ve added these three things.

They’re much more important than these other things. Why don’t we stop doing those? Right. I know we’ve been doing them for three or four years now, but we don’t need to do them anymore. It’s not the best use of our time. And so often these can be opportunities, not only to show that you’re being smart and effective on their behalf, but also to clean up some of that scope problem that makes you frustrated to work with the client.

Gini Dietrich: Yeah, I agree. Um, there’s…you’re right, it’s usually not one thing and it’s usually…it’s usually compounded by several things. In my experience I’ve learned, I’ve learned that when a client says, you know, when we worked with you a year ago, when we started this relationship, you said you were going to do A, B and C and none of that’s been done.

So that tells me a couple of things. Number one, that I haven’t done a good job of redefining a scope, because maybe we said we were going to do A, B and C at the beginning and then got into the business and realized, we can’t do any of those things yet because the business isn’t ready for it or whatever it happens to be, right?

Chip Griffin: Or you tried to do A, B and C and the client said, well fine, but first we need to do D, E and F that I just thought of, right. I mean, that’s one of the other problems is a lot of times we take orders from the client. And so now we’re not doing what we promised, not from our own will, but because they’ve redirected us. And so we need to make sure that we’re being clear about that change in scope.

Gini Dietrich: Or we’ve said we’re going to do A, B and C and the client didn’t want to participate in A, B and C even though they signed off on it. And yeah, so, but I have found that the real reason they do that is because your contract is coming due or somebody is whispering in their ear or the board’s getting on them about something or, you know, there’s a reason for it.

And it’s usually not because you didn’t do A, B and C. And you did D E F G H I J K L all the way through, like you did all this other stuff, but you didn’t do A, B and C. It’s not usually because of that. It’s because there’s something else going on usually. Or, you know, they’ve got, the CEO has gotten an email from one of the PR firms out there that says I can get you on the New York Times and guaranteed placement for free.

You’re like, sigh.

Chip Griffin: Right. Yeah. I mean, look, the thing is, clients are people too, right? And so they’re just like you are as an agency leader, you don’t want to have a difficult conversation with an employee. You don’t want to have a difficult conversation with a client. Clients don’t want to have difficult conversations with you either.

So they put them off, they avoid them. And when they do have them, they often communicate something different from reality, because it’s just easier. Right? It’s like when a prospect tells you, well, we just, you know, we don’t have the budget. Maybe they do, maybe they don’t, it’s just an easy blow off. Right.

They don’t have to say, you know, well, you know, we looked at your work and we didn’t really like it. Right. Nobody wants to tell you that they would much rather just say, I don’t really have the budget for this, or we’ve decided to wait, you know, something bland and not necessarily accurate because it’s a more comfortable conversation than, you know, we thought you were a bunch of clowns and we didn’t like the fact that you wouldn’t let us see the team that was gonna work with us.

Gini Dietrich: Right, right, right. Yeah. So I think the, the end of this, the moral of the story is that there are lots of reasons a client will leave. There are lots of reasons an agency should fire a client as well. And many of those reasons can be avoided. Some of them can’t, but some of them can just by setting the correct expectations, making sure that you’re not over-servicing, being clear about statement of work changes and expectations that have changed.

Okay. You know, being as transparent and honest as you can.

Chip Griffin: Yeah. And you can mitigate some of the ones that even aren’t in your direct control. Right. So, you know, we talk about if there’s a change in leadership at the organization, that’s often a cause of the end of the relationship.

It doesn’t always have to be though. I mean, you know, part of it is that we need to be doing a better job of making sure that we’re getting our tentacles into that organization and building relationships with more than just one person. And, a lot of times the agency ends up with a really strong relationship with whoever they’re dealing with on a day to day basis and maybe their immediate boss, but you need to take the time to build out other relationships so that if there is a change in control of the marketing department or the PR department or whatever.

You have a, you have a better chance because there are more advocates there than the person who just left. Yeah, 100%.

Gini Dietrich: There’s lots of things you can do. There are lots of things that you should not avoid.

Chip Griffin: But at the end of the day, sometimes they’re just going to go away. I mean, sometimes it’s going to happen and it’s not always a bad thing.

In fact, frequently, it’s a good thing because it allows you to take something that for whatever reason, whether it was your fault or the client’s fault, wasn’t a good fit and you can replace them with a better fit client. That’s hopefully priced better and therefore more profitable and more enjoyable to service.

Gini Dietrich: Absolutely. 100%.

Chip Griffin: And that will bring us to an end of today’s episode of the Agency Leadership Podcast, which I think was priced correctly for everybody. It was free.

Gini Dietrich: It’s free!

Chip Griffin: So you can go ahead and fire us. I guess you can click that unsubscribe button, but why would you want to, if you’ve made it this far, you made it this far, you clearly want to stick with us and we appreciate it.

We always like our listeners. So with that, I’m Chip Griffin

Gini Dietrich: And I’m Gini Dietrich

Chip Griffin: And it depends.

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The Hosts

Chip Griffin is the founder of the Small Agency Growth Alliance (SAGA) where he helps PR & marketing agency owners build the businesses that they want to own. He brings more than two decades of experience as an agency executive and entrepreneur to share the wisdom of his success and lessons of his failures. Follow him on Twitter at @ChipGriffin.


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, the lead blogger at Spin Sucks, and the host of Spin Sucks the podcast. She also is co-author of Marketing in the Round and co-host of Inside PR. Follow her on Twitter at @GiniDietrich.

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