All agencies used to love to cite long term relationships.
Why Not. Proctor & Gamble, Unilever and GM have relationships that began in the 19020’s. But Cinderella is gone.
Advertising agencies relationships are getting shorter in tenure these days. A clear trend in client-agency relationships is to terminate those that under-perform.
In 1984, the average client-agency relationship tenure was 7.2 years. By 1997 (13 years later), that number declined by 25% to 5.3 years. Today the average client-agency tenure is thought to be less than three years according to the Bedford Group.
In 1984 when I was transferred from JWT Toronto to JWT Chicago there were a lot of long term relationships in that office. The relationships with clients could be decades long and people worked at agencies for decades. I know that is true as I was trained by gray hairs and their tenures were decades long.
That is not so true these days. I wonder if there is a correlation between the longevity of client relationships and agency employee tenures. Could it be as simple as that? Often when agencies are going into a review to defend a client they reach out to me. I have gray hair. I have also conducted a number of agency reviews for clients. None of the agencies that had the business retained the account but that is because they had lost the client long before I got into the picture.
I have been in situations where a lot of money was spent to defend the business but it was too little too late. It wasn’t a nice experience. I have read that only a small fraction of agencies retain business that goes into review.
When it does happen many of those reviews are mandated and the client doesn’t want a change but needs to put the account into review because of fiduciary guidelines or protocols or politics. Clients will tell me that it is not their choice but something that is mandated.
Agencies that rush in to participate in the review tell me the review is fixed. It reminds me of a song where the lyrics say fools rush in where wise men never go. Finding out that your client is going to implement agency review has a lot of emotional stages.
First come the pain. This is wrong the agency says. Then can come the acrimony. We have done a lot for them. They were nothing before we met them. This is followed by the impact on your employees. This sucks. Will I lose my job? Probably.
In the New Normal only a few agencies can afford to carry people sitting on the sidelines. Since agencies are creative folks, emotional rationale can run high but then again emotions are why agencies are creative.
So do you defend and go to the party pretending all is good or do you pass?
A very tough decision. The finance people send you Excel charts with the revenue implications and the staffing implications, the creative people are squawking and the suits are defensive, worried and trying to be rationale. The media people are fielding calls from their media friends. So if you are an agency principal here is some advice from somebody that has seen and experienced your pain but isn’t living yours today.
First, remember that pitching a current piece of business will be more expensive in the end than you think. Think of it as similar to a coin toss where your chances are less than 50/50 or worst.
They are about 20%. Not really a good bet. If you do defend you need to change the total face of your agency. That may cost you more than you think. I have chased a lot of rejection in my life.
Few of those efforts have had a positive outcome. I have learned that starting new relationships that flourish is the best revenge.
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