There are many challenges to achieving a client’s goals. Often these challenges can be worked through by the agency and client. Identifying possible roadblocks prior to signing a contract will help ease the navigation through the initial months of the relationship. One sign of possible difficulty is a history of successive agencies for the client.
The issue of Successive Agencies
Sometimes, it is simply a difference in culture or way of working. To avoid this, we dive into how the client likes to work internally as well as with vendors. If these align with our own culture and method, it may be a good fit. If not, we will walk away from the opportunity.
When the succession of agencies is attributed to a “lack of performance,” red flags are raised.
While some agencies may struggle for results, most are decent. Sometimes the lack of results comes from the different working styles; this is fixable. More often, it results from an inaccurate assessment of the market, the client’s unrealistic view of their position, or restrictions the agency chooses to ignore in order to obtain the business. An agency can’t fix this set of issues, and ignoring them hurts the client.
Ignoring the realities
Both clients and agencies may wear rose-colored glasses. They tend to believe their own hype, ignoring their competition’s strength, the market’s complexity, or barriers to their goals.
On the client side, we may hear things like:
“We are well known in the market.” Too often, particularly in fragmented markets, clients overestimate their brand awareness.
“We have special relationships with the manufacturer.” Very infrequently, a retailer’s pull with a manufacturer will be greater than that of other retailers. As a result, clients may believe things like “we get the best pricing,” “we get access to more inventory,” or “we have access to more SKUs.” They believe they have an advantage that should naturally generate better sales. After working with the client and gaining experience in the vertical, it is apparent that the client does not have the advantages they believe they have.
On the agency side, the responses involve overconfidence in overcoming (or ignoring) what blocked prior agencies. The agency will take it if the client is willing to shift the business. While this will boost the agency revenue, it is a disservice to the client. Agencies selling to clients should highlight the issues even at the risk of not ‘winning’ the sale.
Avoiding the churn
The responsibility of making a good partnership rests with the client and the agency alike. It starts with reciprocal honesty.
What can agencies do, and what should clients expect?
Set realistic expectations.
One of our first steps in working with a prospective client is developing a model for conversion based on expected costs, impressions, CTRs, and conversion rates. This provides an average cost for leads or sales (with est revenue depending on the client.) Are these numbers acceptable to the client? If so, what is necessary to achieve them?
The first filter (are the numbers acceptable?) is a quick way to understand the client’s expectations. It is possible that prior agencies achieved these numbers, but the clients wanted lower costs per lead or sale. Sometimes, you get vague directions just to have a lower cost. Either way, having this ironed out before an engagement avoids issues later.
If the numbers are unacceptable, it is better to be open about it.
The second filter is critical in understanding how far the client will let you go to achieve results. It is often only after making recommendations that clients may object to the agency’s directions. Inquiring about the activities and recommendations of past agencies provides a sense of what will be acceptable. We will also provide broad recommendations to see if our strategy is acceptable. When there are too many unaccepted recommendations, it is difficult to achieve the goals.
For instance, we had a prospect that wanted an SEO program (and were paying an agency for SEO) who would not allow any changes to their website. The site needs many changes to be even remotely ready for a decent SEO program. While we could have continued to try to get the business, we would have done no better than the current agency. We informed the prospect of the barrier, were thanked for our candor and went our separate ways.
What can prospective clients do?
Be candid with expectations, history, and unknowns. Agencies rely on the information to make recommendations. Some information comes from research, and much comes from clients. If a skewed view shades the information from the client, then the agency recommendations will be off the mark.
A review of past agency interactions can be helpful if a company has seen a succession of unsuccessful agency partnerships. How many recommendations were made but unaccepted? Has performance been consistent over the agencies (though below desired targets)? Were there consistent meetings? These are generally easy questions.
Was the information provided to the agency accurate? This may be more difficult to determine because it requires companies to question their own stories. Challenging preconceived notions about the market position, product quality, and vendor relationships is hard when the company leaders are the source of information.
Long-term partnerships
Longer-term client/agency relationships are rewarding for both. Well-performing digital marketing performance for the client and steady revenue for the agency are, of course, important. But good relationships go beyond the monetary aspects. Ensuring the cultures mesh, communication is strong, and that there is mutual respect helps the relationship through the inevitable ups and downs encountered in business. These things start with open and honest conversations.