Why Clients Come, Stay, and Leave

David sees a lot of creative agencies making bad assumptions about their client relationships by not making the distinction between the reasons why clients come to them in the first place, why they choose to continue working with them as time passes, and then why they ultimately move on.

Links

"Distinguishing Between Why Clients Come, Stay, and Leave" by David C. Baker for punctuation.com

"The Waterfall of Differentiation" 2Bobs episode

Transcript

Blair Enns: David, today we're talking about the revolving door at the front of your agency, more specifically, distinguishing between why clients come, stay, and leave. Isn't it all the same you're great, or you're shit?

David C. Baker: [chuckles] Well, you think now we can just end this? I don't need to talk?

Blair: [laughs] Yes. We were just talking before we recorded about how we're both trying to write shorter blog posts.

David: Maybe we should say a little more. I don't know. Maybe a little more. Come, stay, and leave. Obviously, there's going to be a little bit of overlap here. I just had this thought before we start, and it's not really in my article. Let me just say this and see if you agree. Whenever you work for a new client, they're almost always coming to you from another agency. The implication is you probably shouldn't be the first agency they work with. How do you feel about that statement?

Blair: We talk about this quite a bit. It's one of the things that you've said many times, and I still wrestle with. I think you're right, but I don't know. I put myself in the shoes of somebody running an agency, and somebody comes to me who's never worked with an agency before. I don't think I'm going to rule them out on that basis. I might need to be extra diligent in the qualifying. I need to make sure I do a great job of taking control of the relationship in the sale, so I can demonstrate to myself that I'll be able to have some control in the engagement. I don't know that I would rule somebody out on that basis, but I see why a larger firm might.

David: Yes, because if somebody hasn't used an agency before, they often are shocked at how long it takes to get results, and they're definitely shocked about the cost. Now, I'm not talking about, let's say, a startup where the decision maker has worked with agencies before somewhere else. That wouldn't bother me at all. When I make that statement, everybody listening is immediately going to the one client that was the first agency experience this client had with them, and it went great. They're forgetting the 10 others that didn't. Obviously, there's exceptions to this. Generally, when somebody comes to work for you, they have left another agency. That's an important point later. Anyway, I just thought that was interesting to think about, provocative.

Blair: I don't know how much this is going to preempt what we're going to talk about. I have quoted you many times on the difference between why clients hire you versus why they fire you. I'll say in the words of David C. Baker, you're not hired for service. You're fired for lack of service. You're hired for your expertise.

David: Yes, that's exactly it. Actually, we could stop right there.

Blair: See, I have been paying attention.

[laughter]

David: That's the crux of everything I'm saying. Here's the main problem that made me write this article. You're an agency, and you have a new client coming to you, and they are leaving another agency. In the process of the conversations you're having with this agency, you ask them why they're leaving. You listen to all these things, and you say, " Ah, so we don't do that." They say, "They're not leading us. They're not listening. They keep changing our--" You say, "Oh, in order to be successful, we need to be the opposite of that. We listen to you. We do strategy at the beginning. We try to not change your contact unnecessarily, yada, yada, yada."

No, flip this around. Now, this client comes to you for whatever reason, and then they leave you because they're always going to leave you at some point. The next agency interviews them, and they're going to ask, "Why did you leave?" They're going to say the same thing. Put these in different categories. The reasons people come to you are different than the reasons they leave you or stay with you.

Blair: We're going to go through each of these. We're going to go through why they come, why they stay, and then why they no longer stay or why they leave. I want to flip this around a little bit. Let's start with why they leave. You've just talked about this a little bit. This is why they're leaving the agency, they're leaving. These are the things that you're hearing that you've just pointed out. It's like, "Oh, yes, we're not going to do that." Is it okay if we start there?

David: Yes, sure.

Blair: Why clients have left the previous agency? You've got a list of reasons here.

David: They're being taken for granted. They're not really earning the relationship. If you think about the beginning when you're trying to win, it's like you're on your best behavior, you dress nicely, you're careful about your jokes, you put all kinds of effort into an unpaid proposal. Shame on you, and so on. It's like then, after the client's there, you're taking them for granted. That's one, or you change their main client contact and don't handle it well. There are good ways to handle that, or there's some breakdown in trust or some reasons that are out of your control, too. There's two big ones. The CMO that your decision maker leaves and the new one wants to bring their own person in, or there's somebody in the finance department or procurement that says, "Hey, we've got 28 agencies here. We need to whittle this down to seven. Let's have a review." Those are the two that aren't in your control, but all the rest of them are around, just basically taking the relationship for granted.

Blair: Taking it for granted, cycling through the contact. I think of my agency business development days. The first piece of business I ever won was I heard that this client that I really wanted, the agency serving that client had just replaced the account manager again. I pursued it and won it without a pitch. That's always a sign for me as somebody who was back in the day trying to pick off my competitors' accounts.

Then, taking the client for granted, not earning a relationship, you can see it the way the client is describing the client-agency relationship. They're starting to get a little exasperated with them. That's pretty common, too. Then you've got the ones where something happens on the personnel side, on the client side. We've talked about this before. I think you've got, if not a policy, a strong suggestion for how agencies should handle that change in CMO position. Do you want to just refresh our memories on that?

David: Yes. There aren't enough people who hate me, so I'll just add to that group with this suggestion.

Blair: Oh, no, I think you're doing just fine.

[laughter]

David: I honestly would do this, and I did it once with my agency when it occurred to me. There's a new contact, and they inherited you. It's like a general manager that's hired, and they inherit the coach that's already on the team. It could work out, but it might not. You just go to this person and say, "Hey, listen, you have no idea how much we'd like to keep your account. In fact, we're very excited about it, but we want this to be your decision. Here's a resignation to make this easier for you.

Tear it up if you want to keep using us. By the way, if you're open to it, we'd like to give you some suggestions about the things that we wanted to do, but we weren't able in the past, if you would be open to some of those ideas. If you decide to go in another direction, we will not drag our feet. We'll do everything we can to make this easier for you." That makes this person truly in charge, and it can work really well.

Let me just add something else, too, about changing contacts. Your clients get attached to your account managers. I have a suggestion about how you manage that, too. It has to change. Sometimes you can't just promise forever. When that happens, involve the client and say, "Hey, Tom has to leave. Lori is our best account person. Would you be willing to meet with her and just give us your feedback about whether or not you think you'd be comfortable working with her?" Sometimes these clients push back on your choice, not because the choice is bad, but because they didn't have any feedback in the choice. Give them that opportunity for feedback.

Blair: The commonality in those two things is giving the client a sense of control. Back to the changing CMO, I think you suggested three things there. I think what's brilliant about that is, if somebody just hears the resignation part, maybe they close down to the rest of it. In combination, that is super powerful. The first one is we're really excited about the account. We really want to keep it. Number one.

Number two, I understand you might want to do things your own way. Here's our resignation. Tear it up if you don't want to work with us, but if you accept it, that's fine. We fully understand. Number three, I'd love to be able to share our perspective on things that could be done differently. That's a great combination no matter what happens. Now, it's harder to do when it's a guerrilla client, isn't it? Which is a different topic.

David: Yes. It's easier for me sitting here at a hotel room on a microphone telling you how to run your business.

Blair: We get to the crux of being an advisor and a podcaster. It's so easy. I don't understand why you're not doing this. That's why clients leave. Now, let's imagine one of these or a combination of these things has just happened at your competitors, and now a client comes to you, and you ask them, "Why did you leave?" Do you think clients are typically honest? I don't mean the opposite of that would be being purposely dishonest, but do you think they appropriately rationalize and understand the real reasons why they're leaving? Do you think when asked, they communicate those clearly and honestly?

David: No. [laughs] They're humans. In fact, there's some things that would be easy for them to talk about, like they made two successive massive mistakes, and we just couldn't recover from that, or something that isn't personal at all, but it was pretty destructive. There's all kinds of things that happen that I just think they're not comfortable talking about like they didn't laugh at my joke, or they embarrassed me. They should have taken the blame for something or whatever. Elliot Aronson, the social psychologist, said, "Human beings aren't rational animals. We're rationalizing animals who want to appear reasonable to ourselves." Then I would add to others as well. You got to read between the lines, and there's some things people just aren't going to talk about.

Blair: Reminds me of the line, I forget who said it first, "People don't want to be right. They want to feel right." Let's talk about why clients come. If somebody just left the agency, they're coming to you, they're in conversation with you, why are they going to hire you?

David: If you would like to dive more into this and you're newer to mine and your content, you might want to look at an article called The Waterfall of Differentiation. That explains that for smaller firms, specialization is the first factor that they'll consider. For a larger firm above 40, 45 people, the first factor, and this slips in here, is that you're big enough. You can be trusted, that there's a deep enough bench that if something goes wrong, I'm sure you're going to be able to fix it. You'll stand behind it.

Then there's what's called category experience instead of specialization. There are all those reasons, and I don't want to argue against myself, but I do think there are lots of other reasons why firms come to you. In some cases, it's just a referral. Somebody that they trust as referral source, and the referral source says, "You should go work with them." Then they just check the boxes, or they have their mind off. There's all kinds of other reasons why they might come to you, like how you staff an account or your pricing methodology, I think, is more important than it used to be.

Maybe you have some unique IP or way of using data that you haven't seen in the other agencies that they interviewed. Could some connection to you, so there's this trust that's already established. Maybe distance, although that is less and less important. Your reputation in the marketplace is probably going to give you a first opportunity, but it's not going to be enough. Those are the big reasons, but always it's specialization. That's why they come to you. There are a couple of exceptions to that, but we just need to remember that it's a complex decision. Humans make decisions in complex ways.

Here's where we have to contrast the reasons why they come and the reasons why they leave, because if you jump in on the reasons why they leave and talk about, our service is great. We're responsive, yada, yada, yada, none of those things can be verified until they're in the relationship. These things, all the things that I've talked about, can be verified by a prospect before they jump ship to you. That's important to keep in mind, too. The reasons they come to you should be things that they can verify before they work with you.

Blair: That's a powerful point. I think there's probably an exception to that. That is, if you have a good referral, let's say you're being referred by one of your best clients, and they can attest to all of those little things that drove that new client crazy with their old agency, you don't do that. This service is great. You guys are polite. You're delightful to work with. That's probably a good use of referrals. I'm reminded of this idea in sales that people don't make a decision to move away from their pain until they can see, they can envision the beautiful world they're moving to.

These two things aren't necessarily directly correlated, the cause of your pain and the cause of your enthusiasm or the source of your enthusiasm in the future that you're getting excited about. I guess that's the gist of this whole post and podcast, that the reasons clients leave another agency to come work for you are not the same reasons why they choose you.

David: Instead, we have websites that are littered with the reasons why clients leave instead of the reasons why clients stay. I think that the reasons clients stay are just sort of table stakes. They ought to be true of every firm. Every client ought to be getting great service. Every client ought to be listened to. Every client ought to have strategy first. It's like a big duh when I read this stuff. "What else are you going to do?" It's like, "Well, we tried listening to clients, and it was interesting for a week, but then it slowed things down. Damn it, we're not listening to clients anymore. If that's what you're looking for--"

Blair: Put it on the website. That'll differentiate us. You've just listed it off, and you cover it in more detail in the post, reasons why clients stay. Are these the value propositions, in air quotes, or even unique propositions that are on agency websites?

David: Yes, I think so.

Blair: You've got here, it's a door to a future topic, and it came up in our last recording. You don't lock them into recurring revenue engagements that are more in your interest than theirs. Do you want to walk through that door now or save it?

David: Oh, I think I've got room for one more arrow in my body. I'll leave that one for later. Here's what I'll say about that in this context. I'm not against recurring revenue engagements entirely. If you are in a recurring revenue arrangement with a client, when it starts to tip in the wrong direction, it's going to tip faster and you are less likely to recover it because there's something psychological about sending a firm a check every month where the person sending the check-- I know it's not a real check but the person sending the check expects a certain amount of stuff from the client and it becomes an entitlement in their mind, and they're more sensitive to when you aren't earning that every month. I'm not saying you shouldn't have recurring revenue arrangements, I'm just saying you should be a lot more careful about the relationship going off the rails than if you didn't have them.

Blair: I think that's one of the arguments against retainers, and I'm not fully against retainers. I think there are right ways and wrong ways to do retainers. We may have even done a podcast on it. I don't remember. It's been so long now. It's been my experience that in a retainer relationship, usually one party feels aggrieved. They're not getting their share, the agency isn't earning enough money for what they're doing, or the client isn't getting enough for what they're paying.

David: When you do have recurring revenue arrangements, I always urge you to rebalance them every quarter and fix that. If you're over-servicing or overpricing, then fix it so that the party isn't aggrieved either one of the parties. We'll talk about that later.

Blair: Do you want to put a bow around all of this and give some final advice to our listeners on how to continue to think about these three different, distinct phases?

David: The most important thing is really to keep leading clients as if you just got them. Just think about it as if you're so grateful that you just landed this client, even though you've had them for 17 years, because you're far less likely to lose them if you don't take that relationship for granted. We just celebrated our 45th wedding anniversary, and this is so true of marriages as well. I think it's a great example of not taking somebody else for granted, even if the period of time is long.

It's easier and easier to do that. Yes, don't take your clients for granted. Keep leading them, and leading means pushing back kindly. It doesn't mean just being a great order taker. It means doing what's in the client's best interest. You and I were on a call this week with somebody, and you really emphasized that. It's like that's the mantra. Tell people what you were talking about there. What's the mantra about doing what's in the client's best interest?

Blair: Somebody had a challenge with a large gorilla client, and your initial advice was you got to keep leading. The big mistake is server responder mode. You may have to keep leading even though you've got this fear of losing the account. I said the hierarchy that I have in mind in these situations is first you do the right thing for the brand or the client organization. That's number one in the priority stack. Number two in the priority stack is your client, this person. Number three in the priority stack is the agency. You don't count in there. If you're in there at all, you're number four, but brand client agency. In this situation, I think what you and I were guarding against with our advice was resist the urge to put the agency's needs above the client's.

David: You can sleep better at night, and in the end, it's just the right thing to do.

Blair: I was going to say, we have a first here on 2Bobs. We've got a caller. Go ahead. Julie Baker, go ahead and respond.

[laughter]

David: I know Julie Baker. She would not call this podcast.

Blair: I know. All right, David. This was awesome. Thank you very much.

David: Thank you, Blair.