I’ve been thinking about client-agency loyalty lately. And the importance of the relationship in the life cycle. The advertising agency business is a lot about marketing know-how, communications planning and creativity. But let’s face it – this is a people business. And the agency-client relationship can be quite complex. It requires genuine collaboration and effective communication from both parties to make it work over the long haul.
The client life cycle begins the moment an agency wins an account. That’s when the relationship clock starts ticking. According to a survey conducted by the American Association of Advertising Agencies, in 1984 the average client-agency relationship tenure was 7.2 years. By 1997, that number declined by 25% to 5.3 years. Today the average client-agency tenure is thought to be less than three years
Clients cite a variety of reasons for terminating their relationship with their agency, but they are fairly consistent and predictable. Most of the time, these issues could get resolved if they were acknowledged and addressed along the way.
- Turnover and/or new management on one or both sides
- The agency’s lack of understanding of the client’s business
- Inadequate strategic thinking
- Client “outgrows” the agency
- Understaffing and inexperienced personnel on the agency team
- Creative inflexibility and/or arrogance
- Budget constraints
Bottom line, agencies need to make sure they deliver the goods and that the client feels the love. In a world where demands on everyone are higher and information travels at warp speed, patience becomes thinner and loyalty somewhat weaker. Agencies need to build partnerships that are based on trust, confidence, understanding and open communication. And bring their A-game each and every day.