7 Reasons You’re Not Winning Your Endgame – Bad Client Relationships
Manchester City fans may well remember the on-pitch brawl between Mario Balotelli and Roberto Mancini in January 2013 as the public beginning of the famed coach’s undoing. It wasn’t especially surprising that Balotelli was let go within a few weeks, as his antics were already notorious, and it was Mancini himself who’d given the striker a chance to redeem himself at Man City.
What some may not have expected was, despite having the fourth-best win percentage and leading the club to their first league title after a four decade drought, Mancini was fired some months later. Though football clubs are notoriously fickle, many pointed to Mancini’s increasingly poor relationships, particularly with players, as too big a risk to endure and suggested it was causing the entire team to fall far short of their potential.
It could very well be that Mancini’s preoccupation on securing star talent to win more silverware cost him his reputation and ultimately his career with the club.
It’s even more likely that your fixation on racking up a star client list may be damaging your agency.
Saying goodbye to poor client relationships is one of the surest ways to start winning your endgame, and yet, for many agencies, the hardest thing to actually do. Because, who wants to watch money walk out the door?
You should - anytime the potential costs are far higher than the possible returns. And that may be more often than you’re comfortable admitting right now if you’re feeling squeezed by the pressure of hitting revenue goals.
Here’s a smack of reality - bad client relationships diminish your ability to attract and win good ones. They drive up your recruitment and retainment costs (because, seriously, there’s just not enough masochistic creatives to power all the agencies). And they threaten your long-term profitability by robbing you of time, energy, and inspired thinking for the right projects with the right clients.
Now, let’s free you from those dangerous liaisons by covering how to break your bad relationship habits.
Get those values aligned
Have you justified taking on a new client whose requirements were outside your established forte or continuing with a problematic client by saying “well, the money’s good?”
Both these are signs that you haven’t ingrained your company values deeply enough into your organisation and processes. If you can’t clearly articulate what those values are in the first place, it’s worth revisiting our conversation on why your agency exists.
Can you name an agency that was built to greatness based firstly on the revenues they generated?
You can’t, because that's not a thing. Why? Because choosing clients based on the income they generate for the agency is motivated by fear. And great agencies don’t operate from a place of panic. They operate from a place of purpose. They have values and they stand up for them.
The best way to make sure your roster is clear of bad relationships is to avoid taking on clients who don’t share your culture in the first place. Before you accept any brief, you should hold a BS-free discussion to clearly line out who you are, who they are, and what you both expect.
“Clients admire shops with clear cultures. Having a dialog from the outset about cultural differences between client and agency sets expectations, creates alignment and helps to avoid problems down the road.”
If there’s misalignment on any of your core beliefs and work methods, STOP.
Good relationships are dependent on having both the right chemistry and capabilities. That whole plenty of fish in the sea thing? It’s true.
Waiting for the right fit will pay dividends tenfold over any short-term billings from a client you’re not ideally suited to serve.
Say what you’re thinking
Perhaps you have a well-defined culture and are only swiping right on your dream clients. But, you’ve got one or two relationships that have gone off the tracks a bit.
Should you cut your losses and send the client a Dear John letter?
Not so fast.
One of the biggest relationship issues cited by both clients and agencies is poor communication.The road to repairing the situation begins with implementing a communication system that mandates a consistent and transparent dialogue between everyone on your agency team and everyone on the client-side.
You may have noticed I said the system should include ‘everyone.’ It’s important for the system to be open to all, but you also need to ensure ownership of tasks and milestones is clearly defined. An effective system should have structure, timeframes and enforceable consequences for not using it.
Once you’ve got everyone on-board with the system and thoroughly trained on the tools you use to facilitate it, your job isn’t finished.
Making a Slack channel and a few Trello boards is not a substitute for creating an environment where you and the client are genuinely comfortable and encouraged to say what you mean.
This ties back to your agency ethos and the agreed upon values. Periodically reviewing them with clients will keep you in alignment.
And if you didn’t have your purpose set in stone before, you have absolute permission to present it once you do. Don’t be surprised if your clients decide to give you more work when you do.
Find time for retrospectives
So, you’ve got your day-to-day communication engine running like a McLaren F1. What about bigger picture conversations?
There are two types of retrospectives key to keeping the pulse of your client relationships and correcting course before you find yourself in a sinking ship too far from the shore to swim back.
Firstly, the Advance Retrospective, as prescribed by Karl Sakas, is a powerful tool that helps you “begin with the end in mind,” achieving shared understanding and laying the groundwork to reach goals.
Secondly, run a more traditional agile-style retrospective at set intervals, e.g. every few weeks or after major milestones. Even if you only do it at the end of the project, there’s still loads of value in reviewing what worked well, what didn’t, and fixing those processes for future projects.
I know what you’re saying.
“But, we’re too busy to sit in a review meeting.”
Well, guess what? Not doing retrospectives means you’re going to stay busy fire fighting and battling with clients about trivial things that don’t move their or your business forward.
Don’t you think it’s worth periodically devoting 45 minutes of your and your client’s teams time to a discussion that will lead to better, happier, more impactful work in the long-term?
You’ve got to stop looking at this as a cost and understand there are real tangible benefits to be reaped from making it an uncompromisable standard practice.
Agency owner and strategist, Lee Odden lines out the upside:
“For clients, sharing and capturing feedback fuels business growth, better creative, strategy and service from the agency.
For agencies, a relationship check can contribute to business growth, referrals, references, profitability, and reduced churn.”
Rethink your revenue model
The last tip we’ll cover in breaking bad client relationship habits does go back to the topic of revenue. Specifically, your pricing strategy.
While I hope you’re already well aware of how you can benefit from optimising your retainer services, you may still be rationalising that hourly rates are the only way you can compete with cheap creative marketplaces and DIY services.
Strategist Tim Williams argues this may have even greater negative impact on agency/client relationships than lack of transparent communication.
“By deciding to sell their inputs (hours) instead of outputs or outcomes, agencies instituted a system that incentivizes clients to deconstruct agency costs.
In place of conversations about effectiveness and marketplace results, marketers insist on detailed discussions about efficiency and costs, often imposing their own calculation of agency overhead and dictating “allowable” profit margins, much like the governing bodies who approve the rates and profits of regulated public utilities.”
The solution to overcome this bad habit is simple (though it might sting initially). Quit, cold turkey.
That means a frank conversation with any client currently working with you on an hourly basis about why that pricing structure doesn’t allow for you to deliver the best outcome for them. They may walk.
And you need to see that as the best answer, because it means you can dedicate resources to the type of clients that see the world as you do. The kind of clients you can grow with long into the future.
If you need some help identifying which client relationships are troubled, Karl Sakas also has a handy little tool for ranking your roster.
Tune in next time as we tackle a decidedly unsexy but hugely influential topic that is a game changer for agencies looking to win their long game.
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This post is the sixth in our series examining the 7 reasons creative agencies are not winning the long game and what they can do to overcome those obstacles.
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