Replacing a good client can cost a public relations agency up to five times more than retaining one.
When a PR agency loses a good client, aka gets fired, it hurts to the quick. All agencies experience client attrition, some more than others, whether for performance (the ugliest way to lose a client), M&A, personnel changes by the client, etc.
And while every agency may have a unique methodology for replacing lost business, one thing many have in common is that they suffer through the same emotional and intellectual phases of loss (or stages of grief).
It goes something like this:
This is the “tell me we just didn’t get fired” stage. ”No, that just did not happen, did it? And everything was going so well, wasn’t it?” Ah, apparently not. But denial is a natural and immediate response to a client termination and helps get the agency to the next stage—one step closer to acceptance.
This takes different forms. Especially in termination for performance, anger inside an agency can quickly spiral out of control:
• Agency principals may be upset with the account director’s inability to defuse client-agency issues before they escalate, as well as with the team’s ability to generate results.
• The account director may get angry with the team for not stepping up its game and for making him or her look bad.
• Conversely, the team may get angry with the account director for not being a strong leader.
• The agency may direct anger at the client: “Why didn’t we at least get a warning?” Well, chances are the client sent multiple warnings. But the agency wasn’t paying close attention. Here are a few warning signs.
“If only we switched up the team a few months ago like we said we were going to do to bring new, fresh ideas to the client. If only we got our CEO in front of the client, like we said we were going to do, to review the program and strengthen the relationship. If only we delivered on our promises.” If…if…if…bargaining.
With a client termination come additional issues. An agency may worry about its reputation after being fired: “What is the client telling others about why they ended the relationship?” There will be staff billing and staff use concerns now that a client is gone. The dash to replace the lost business means less time will be spent on agency marketing, new service offerings, etc. And all too often an agency will replace good business with bad, bringing on new problems.
[RELATED: Learn how the best workplaces maintain incredible retention statistics.]
Sometimes a client will blindside an agency with a termination. This is the most difficult termination and the hardest to accept. But more often than not, good clients signal their dissatisfaction with an agency. For whatever reason an agency is terminated by a client, by the time an agency reaches the acceptance stage it is finally ready to move forward, has conducted a thorough postmortem and is putting plans in place to reduce client attrition.
A version of this story first appeared on the author's blog, What It Takes.