The “Client Lifecycle” Reality or Urban Myth

Wiki states that the average person remains at their job for 13 years.
Sounds good, right? I mean 13 years. True, it’s an unlucky number for some, but
better to be employed for any time in this economy. Heck, Uclue.com states that
the average US marriage only lasts 8 years.

So, maybe it’s the advertising industry that is averaging down the 30-year
gold watch anniversaries. A Spencer Stuart Blue Paper cites that: “It’s jarring
to note that the average tenure for CMOs at the top 100 branded companies is just
22.9 months. Based on our data, only 14 percent of CMOs for the world’s top
brands have been with their companies for more than three years — and nearly
half are new to the job over the last 12 months.”

Just as in the lifecycle of a marketing manager, I often hear about the “lifecycle of a client” with an ad agency. I took an informal poll with some peers, and most stated that they expect to work with a client for about 4-5 years and then poof – the client goes off to perceived greener pastures. In fact, a client of ours stated that 4 years for an agency / client relationship is long, (pause for reflective swallow, as we’re in year 3).

So, does a client have a lifecycle and why? OK, this is where the stats stop
and theories start, so jump off the bus now or open your mind…

Let’s say your contact at your favorite client makes it past the 22.9 months
and actually wants to make a career out of it. That doesn’t mean that everyone
else there does and he or she probably reports to a COO or CEO who may in fact report
to a Board or Shareholders. Results have to keep coming. Here is why they may
not be…

I hear things like, “the creative just wasn’t exciting anymore” or “no new
ideas” or “just time for something different”. Yes, often, the creative goes
stale, but it is not, in my opinion for a lack of creativity. Sounds weird huh?
I’ll explain. By year three, the creative should be more on target and yielding
much better results. I mean, you’ve been doing your unaided and aided branding
research studies every year right? What client doesn’t want to pay for
research? Never heard of such a thing…but, I digress. We’ll post about that
later.

Here is my theory…The creative is there, the account is known better than
ever and results should be increasing. But, you are now working in fear. What
fear you say? The fear of losing the client.

When agencies go after a new client, one of my most and least favorite parts
of being an agency principal, most go all out – balls to the wall – creative
juices flying everywhere. We do. Why? Because they’re really not invested
financially in the account. The revenue they could earn is “hope to get” money.
“Hope to get” money is fun. It’s like a lottery ticket before you check the
numbers.

But when an agency lands a client, it needs to staff up appropriately, buy
needed research studies/tools, join relevant associations, upgrade some
software, spend some time meeting with some new subcontractors – it’s time and
money. So, the new “hope to get” money gets spent quick. You start servicing
the client with all these tools, are in the new-relationship love affair with
the client and integrating the new tools or new people into your team.

After a year, you’ve produced some results, the client is loving you, but
you’re also loving the new tools, team members etc. Now, the money is still
there, but it’s no longer “hope to get” money, it’s “need to have” money. It’s
need “need to have” money because you’ve made all the commitments to service
the client and it’s not like you were out there going after more “hope to get”
money because you’ve been busy trying to get your new relationship off to a
good start, and your team was already running thin anyway in this economy and
you may not have the manpower to win new business and win over your new client
at the same time. You made a choice.

In your second or third year with a client, you’ve now gotten accustom to
running your shop with the new tools / resources etc. and have forged personal
relationships with your new team members. They are really part of the team now
– your family. You’ve met their families, understand their hopes, dreams and
really care for them. Now, you’re afraid. You’re afraid of letting them down.
You’ve put yourself in a position where the “need to have” money is “gotta
have” money. You know that if you lose the client, you’ll lose the revenue and
ultimately may have to lose some of your team members.

So, you as a manager may stifle the great ideas that are on the edge in
favor of more conservative ideas that are “mainstream.” You don’t push the
client anymore. You agree too much. You say you think “their ideas” are good
whether they are or not. All, because you’re afraid to lose the client and by
doing so, you do just that. You lose the client. No client wants a “yes man”.
They want new exciting invigorating ideas. That is why they came to you at
first, right? Are you afraid to give them what you feel they may not want? Are
you afraid to push the envelope?

Like most things, it revolves around money. I hate that part of the
industry. Really, I do. Most people who think they know me, think I’m all about
the money, but the people who really know me, know I’m not. I’m about family,
first, second and last, and my team at the office is part of my family.

Do I think there is a client lifecycle? Yes, for some clients, for some
agencies. But, I believe it is not because of the talented team of people in
your agency. It comes from fear and we, as leaders, need to be stronger,
bolder, more willing to take risks – even in today’s economy, especially in today’s
economy.

www.apexdm.net

By Larry Meador

Advertisements
  1. No trackbacks yet.

What Do You Think? Comments Welcome.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: