When you ask seasoned agency executives why they lose clients, you hear a multitude of reasons. The agency's client changed and the new client came in and cleaned house; the agency paid poor attention to budgets and timelines, or their strategic ideas, creative, and execution fell below client standards; the client feels they have "outgrown" the agency and they need a new agency with fresh ideas. Alternately, the client left because of the agency's arrogance and intransigence. And so on...
Though all these are potential reasons, the overarching foundational reason agencies lose clients is that they do not adequately satisfy the clients' basic human needs. Their basic human needs for food, safety and love -- yes, you read it right -- and their basic needs for esteem and self-fulfillment.
Understanding that all clients' needs at their core are basic human needs and passionately fulfilling those needs is the key to keeping most clients an agency would have lost. You must repurpose your agency's strategy, people, operation and processes to meet those basic needs to enjoy increased client retention.
In our client-agency relationship and process improvement work with interactive, direct marketing, branding, promotions, advertising and PR companies we have identified what clients need from agencies [see list in figure below]. If you compare those needs to the Maslow's hierarchy of needs, you find that "excellent ideas and delivery," "value for money," and "meet my goals," map to the clients physiological need for food. The "responsiveness" and "develop fast solutions" requirements map to the client's safety needs. Continuing, the "good to work with" and "understand my business" requirements map to the client's desire to fulfill their need to belong.
You may not agree with the specifics in this example, and may want to build a Clients Need Map that best reflects your clients' specific requirements. The key insight is that your clients, at a deep psychological level, want to satisfy their basic human needs.
We have found in our client-agency relationship and process improvement work that agencies with a laser-beam focus on delivering those needs well tend to keep their clients a lot longer than those that do not. The secret reason your agency is losing clients unnecessarily is that there is not enough leadership focus and emphasis on this concept and its execution, and that your agency's strategy, personal, operation, and processes are not yet geared towards achieving this goal. Let's take a look at how to remedy the problem.
Building a solid foundation
First, you must understand your client's lower and higher order needs. For example, think back and remember your favorite pizza or ice cream place. You always go back there because of the taste of the product. You may even drive past several of their competitors to get to your preferred vendor. They are meeting your lower order needs. For some people, the key need could be taste, good service, ambience, or belongingness (a key attractor for Starbucks customers). For others it could be "value for money."
In the ad/marketing services world, a key lower order need might be "fast execution" or "be very responsive." Therefore, you must start by identifying the client's priorities for these most basic needs, and put a plan in place to meet them in a consistent manner, right from the start. No matter how well a company is doing in delivering the clients higher order needs, if they fail to meet consistently the lower order needs, they will lose the client.
Can you imagine an airline meeting your esteem needs, by giving you free champagne on the flight, but takes you to the wrong airport? They met your higher order esteem need, but failed to meet your basic lower level "timely arrival at desired destination" need. Will you fly them again?
In the same vein, if the agency wins all sorts of industry awards that the client is genuinely proud of (higher order "esteem' need met) but fails to drive volume or awareness (lower order needs not met) will the client keep using them?
Finding the lower order needs
The clients lower order needs are those that fundamentally must be met. They are the results that the client wants from you and why they hired your agency in the first place. If the agency continues to perform poorly in meeting those lower order needs, the client will definitely fire the agency.
There are two types of lower order needs. The first are the types of needs that are no big deal when you meet them, which I call the "no big deal if met" client needs. The second are the types of needs that the client is happier the more of them they get, which I call the "get more the better" client needs.
The "no big deal if met" client needs. The "no big deal if met" client needs are those that the client expects you to meet without them necessarily requesting that they be met. They are customary and normal needs that must be met in a relationship. For example, the client expects you to give them a bill or invoice for the services you provided, or a statement of account telling them how their budget was spent. Just like when you stay in a hotel or go out to dinner, you get a bill. It should not be a big deal for the business to give you a bill, an invoice, or a statement of account. It is an expected, customary, and normal part of the day-to-day engagement.
You get no kudos for meeting the "no big deal if met" client needs. However, you will get a lot of grief if they are poorly met. Have you ever stayed in a hotel and while checking out you found that your bill was wrong? Did you feel they were doing you a favor when they corrected it? No. They just wasted your time for something that should have been correct in the first place. They won't get any kudos for billing you correctly, but chances are you'll remember if they messed up on something as simple as this. Similarly, no matter how creative or strategic an agency might be, a client will eventually fire an agency if they continue to perform poorly on meeting these basic expectations.
The "get more the better" client needs. The "get more the better" is another form of basic client needs normally agreed upon in the day-to-day working relationship with an agency. For example, in a client agency briefing, if an agency committed to providing three concepts and not only delivered these on time but shared two additional ideas for looking at the marketing challenge, they are meeting a "get more the better" need. The more of it the client gets, the more satisfied they become -- to a reasonable limit, of course.
For the same budget, by giving the clients more concepts than they expected, you are leveraging the "get more the better" concept. Delivering what was promised earlier than promised or for much less than the agreed upon budget are other examples of "get more the better" client needs. By understanding your client's "get more the better" needs and strategically giving them more than expected, where appropriate, you can significantly deepen your relationship with the client.
Just as with the "no big deal if met" client needs, you get no kudos for just meeting the "get more the better" client needs. However, by going beyond what is expected, the client will likely appreciate your thoughtfulness, your creativity, and see you as a proactive partner who is working harder to make them more successful. It does not necessarily cost you more to deliver additional "get more the better" needs.
Determining higher order needs
Determining the higher order needs -- esteem and self-actualization -- may be a little more complicated. For example, a client that relies on your agency for "strategic counsel" and for "creative that makes their brand famous" is looking to meet a higher order needs with your services.
Please note that a lower order need for a client working with an agency may be a higher order need with another agency. For example, the "strategic counsel" need may be a lower order when the client works with a large, top-of-the-line ad agency. However, the same client working with a promotions company may classify this as a higher order need since they already have a primary agency to do the strategic counseling.
Mapping client needs
To determine your clients' lower and higher order needs, try building your own Client Needs Map for each one. When doing this, remember that higher order needs contain numerous esteem and self-fulfillment needs and, in some cases, they can become very personal. It may be helpful to split the higher order needs to "formal" and "informal" needs. A "formal" higher order need is mostly a client's company need; while an "informal" higher order need is very personal to the client you work with directly.
An esteem need, such as, "drives my volumes and brand awareness while winning agency awards," or "creative that makes our brand famous," which can be shared with appropriate persons within the client's organization, is an example of a "formal" need.
On the other hand, an "informal" higher order self-fulfillment need, could be something like, "the agency's work must help me get promoted." I hope you would agree that it is best to keep such very personal needs confidential. For example, one of my clients, a director of a large consumer packaged goods company, was promoted to VP because of the high-impact improvement work we completed. We recognized that the self-fulfillment need of "to be promoted as a result of the improvement work" is an informal client need.
Meeting higher order needs to reinforce your relationship
Naturally, you should focus on meeting the lower order needs first, and use meeting the higher order needs as "icing on the cake." No matter how well a company is doing in meeting the higher order needs, if they fail in delivering the lower order needs well, they will, over time, be fired by the client.
The 7-step process
Losing a client is particularly painful at this time of economic hardship, so ad/marketing services companies and interactive agency leaders can use this model to plug those avoidable client losses, now.
In a nutshell, start the process by auditing your current joint client-agency relationship and processes to identify what is working well and what is not. Next, map what your clients need from your agency, and the hierarchy of those needs. Then identify the gaps in meeting those needs and develop solutions and strategies to close the gaps. After that, roll out agreed solutions after proper testing. Finally, use performance tracking and effective client-agency change management to sustain the client retention strategies you implemented.
Now, take a look at how to execute those steps in more detail.
Step 1: Conduct relationship and process audit
Determine your clients' lower and higher order needs and how they map to the hierarchy of needs.
- Is your company's operation set up primarily for business "hunting" or "farming"? It is best to balance the two; for example, a business model geared towards farming that spends significant agency resources on acquisition may not have the bandwidth and good supportive processes for keeping clients they acquire for a very long time.
- How strong is the chemistry between the agency teams and the client teams? How can you tell the chemistry is working?
- Are your work practices and processes geared to delivering the client's basic needs, and doing them very well, such that the client never entertains leaving the agency? What are the sources and causes of client dissatisfaction in your work processes and practices?
- Are your practices good at meeting the clients' budget and timeline requirements? Are they good for executing flawlessly?
- How would your clients score you on caring and being very responsive to their needs? How well would you score on whether they would recommend you to a colleague?
Step 2: Prepare a client needs map
Through the relationship and process audits, you discovered the low and higher order needs of each of your clients, which could vary significantly among them. However, most clients will expect you to meet their goals, provide excellent ideas and delivery, understand their business, be responsive to their needs, develop solutions fast, and give them value for their money.
With this information in mind, prepare the lower and higher order maps for each of your clients.
Step 3: Close gaps in lower order needs
To be effective, you must focus on the most important lower order needs first. A transformative understanding and appreciation of basic human needs, and how to meet those needs effectively, is critical to retaining your clients.
When an agency fundamentally understands the client's basic needs, from the top down, the whole agency operation, strategy and processes become repurposed around understanding, identifying, delivering and tracking how well those basic needs are met. This type of agency is equipped to consistently meet these needs, and will likely start enjoying significant increases in client retention and win-backs.
Step 4: Uncover and deliver higher order needs
The very first step in meeting the higher order needs is to be sure the agency is already meeting the clients' lower order needs consistently.
Next, develop a strategy for delighting the client through meeting their higher order needs. Revisit the higher order needs you previously identified in the relationship and process audit, and then develop strategies for delivering them.
Step 5: Test solutions and strategies
Though cast in a hierarchical form, all client requirements must be delivered simultaneously to keep the client happy. To test solutions and strategies, start with the lower order needs and make sure they are being met. Then progress to higher order needs.
Key questions to ask as you do your testing:
- How often does the agency fail to meet the timelines promised?
- How well expected campaigns results are achieved (increased brand awareness, increased sales, etc)?
- Does the client feel they are spending all this money with the agency but not executing enough campaigns or driving required results, no matter the reasons?
- To what degree does the client see value in their working with your agency?
Step 6: Training and rollout
Train key employees and account leaders on the solutions and strategies you have developed. Then, train key stakeholders on how to manage the client relationship so they can progressively improve the economic performance of the agency and the client.
The training should cover:
- How your account teams can turn problems into opportunities
- How to understand and fulfill all basic client requirements (lower and higher order needs, formal and informal needs)
- How to execute your client work fast and flawlessly
- How to measure performance and drive changes in behaviors, with client and agency organizations, required to improve results
- Ultimately, how to focus on giving the client more with less
Step 7: Track and take corrective action
Track and take corrective action on how well the agency is meeting all identified needs. As you do this, recognize that your agency must be passionate about being strategically aligned with the client. Be clear about what this entails and how to live it credibly by passing decisions through that screen.
In addition, the agency must be an enthusiastic brand steward for the client. Know the brand so well that you become the source of knowledge about the brand for any of your clients' new and transferred marketing managers.
Strategically use the data and information you collected through this step to proactively cultivate champions in your client's organization. Help them become "stars" within their organizations by using the performance data to show the great results they are producing for their companies. In turn, they will be loyal advocates of your services.