Client retention at agencies across the country is dropping like a stone.
Clients are leaving agencies in record numbers.
A few years ago agencies could count on keeping clients for four years or more. Now this retention rate is moving towards two years. Or less. This means half your clients are at risk of leaving in any one year. Agencies must become new business machines. This means agencies need to step up their new business activities substantially and treat new business similar to other parts of the marketing communication industry that work on a project basis and deal in episodic relationships. It’s not good news but it’s true news. For most agencies a whole new way of looking at new business is needed.
One Bad Year Can Put You Out of Business
In the past, agencies found it easy to recover from a bad year in new business. In the grim realities of this economic environment, with clients changing agencies faster and faster, a bad year in new business could put your agency out of business. Add in the effects of the slowdown in client spending, and the situation becomes worse. For many firms, this changing situation means new business efforts must be doubled just to stay even.
The Changing Face of New Business Math
Client satisfaction has dropped significantly over the past ten years. And some are expecting clients are going to change agencies at an all time rate this year. Tired of having to fight with their marketing partners, hiring new marketing managers and looking for new ideas the new business wars are going to heat up more as the economy slowly recovers.
The Solution
Look around. Ask questions. Call your peers, your friends and family, business owners and leaders in growth. And most importantly find some experts in new business. The best thing to do now is understand how the game is changing. Many of the old tactics no longer work. Some very old tactics are working better then ever. And there is a whole slew of new tactics that may or may not be effective for your firm. Find out how other firms your size and condition handle new business and what results your can expect. Then assemble your management team for a one-day new business mapping session. Refer to it as an 180 meeting because the purpose is to change the directions of your agency’s growth pattern. Usually in a direction 180 different from where it has been. If you can have an outside mediator that comes with a 80 page training manual designed to review 12 key new business skills and probe your firm for any weakness. Work with your team to make decisions on which direction to go, determine the priority for a wide variety of growth tasks, choose who will be responsible, and allocate the resources needed to change your agency’s new business trajectory. We call the session DayOne. You’ll call it a miracle because you won’t believe the breadth and depth of the planning accomplished in so short a time.
A recent note from one agency president:
Our company is on a new track. The first few months were tough for us, items I felt were in good health, weren’t. But, we’re all committed players now because we’re seeing positive results. If we had stayed where we were 18 months ago, I doubt that we’d be in business 18 months from now. The Sanders Consulting team deserves a lot of credit for their assistance.
It’s your job to ensure your agency’s future. Start by scheduling one day to review how best to grow. The day you decide to fix new business forever.
Photo by lucidrean
