Why Clients Fire Their Agencies – Mike Drexler

I’m not so presumptuous to think that I know every reason agencies get fired. But having been in the agency business for more than four decades and another five years conducting agency reviews, I have observed several very pertinent things about the client/agency relationship. More importantly, I have been directly involved with several of theses dislocations and privy to some of the thinking behind them.

The client/agency relationship has been a subject of discussion for many years. But instead of getting better, it’s gotten noticeably worse. The latest statistics indicate that the client/agency relationship has been in steady decline and now stands at a low three-year tenure. That’s a serious problem for clients and even more so for agencies when you consider the disruption, distraction, personnel shifts and added costs associated with the divorce and attempts to find a better partner relationship.

In my opinion there are commonly five primary reasons for clients firing their agencies and several more secondary ones. I’ll try to offer them here:

1. The client hires a new CMO (or CEO) and puts the current agency into review. This is often assumed to be part of his or her responsibility to assure that the client is getting the “best” work or the best value (whatever that means). Sometimes, and let’s be honest here, the CMO has worked with another agency in the past and really likes them. There’s nothing inherently wrong with either of these reasons, except that the current agency may not be fairly evaluated -- and, perhaps, unfairly indicted for something that has nothing to do with performance. (Yes, I’ve been there.)

2. The client fires the agency because their work or service has not been good enough. That’s fair -- and absolutely justified. The only question to be answered is whether the client goals and benchmarks for the agency have been properly set, regularly monitored and communicated so that both parties know what needs to be accomplished and in what period of time.

3. The client requires additional capabilities that the agency either does not have or has not been able to add quickly enough to guide or lead the client into new communication environments. This is also justified if it has been reasonably explored and the cost of additional capabilities and service is an issue that cannot be resolved.

4. The agency has not shown enough innovation and produced enough big ideas. This may often be a subjective consideration unless clearly defined and the client is able to express the specific reasons for their dissatisfaction. It is usually a good idea to provide some guidance in advance before the hatchet comes down.

5. The agency fee is too high. This one oftentimes can be the worst decision for letting the agency go for several reasons. First, there is always room for negotiation unless neither side is willing to budge. Second, the agency and client should always sign off on an agreed compensation plan (with specific dates for measurable deliverables) and a periodic evaluation (audit) of costs. Third, lets be truthful. Sometimes a client is just window shopping for a lower price (that’s not real value). There will always be an agency around that will accept a lower margin. But what about the staff and quality of the work. Is it really better? The cost of the staff can be effectuated with lower level people or the agency can use an initial compensation proposal to get in the door and make it up later as the relationship builds. Either way the level of quality or resources can be compromised along the way.

6. The client wants to consolidate (or integrate) various marketing and media functions into a cohesive, holistic strategy and also save money by doing so. No argument. In today’s world, too many agency functions are disparate and integrated communication does not flow easily. No doubt some agencies have to modify and improve their reporting structure (and P&L) to cohesively bring all necessary participants together for the tasks at hand.

Those are the more common concerns I’ve heard over the years and continue to hear even more so today. Let’s face it, we live in a much more complex and increasingly competitive marketing environment and the media world is not only splintered it’s fractured. And continuously shifting at great neck speed. It’s not only getting more difficult to anticipate future digital developments but keeping up with them and investing significant amounts of money in the deployment of their application is difficult to manage. (Even though the pundits all have opinions, their timeline cannot be predicted.) Agencies are expected to lead, to have whatever resources are necessary to handle the client’s requirements (that includes both soft and hard data resources ready to put into action.) There are also several other reasons for instituting client/agency divorce proceedings such as personality issues, execution mistakes, disagreements over strategy or creative work, personnel support, teamwork and perhaps even a larger issue of insufficient trust and comfort between the senior parties to bring issues into the open as soon as they arise.

The days of an account guy leaving an agency and taking a client along is uncommon today (although it can occasionally happen). Most important, however, is that many of the things I’ve outlined here can often be resolved if both the agency and client believe in the marriage (or at least are willing to try). Picking another agency may not always be the solution if there isn’t some real attention by the client to change certain aspects of the process that may have gone wrong before. Simply using another supplier or resource and doing the same things will not work. And finally, the client has to really consider how the agency is treated. I know that agencies have always expressed the desire for “partnership” and to not be considered a vendor. The reality is that genuine partnership does work better, but it takes the right attitude by both parties to create an atmosphere of cooperation that precedes their mutual interests. That’s a necessary ingredient to real partnership.

Mike Drexler is Co-Founder and Managing Partner of DrexlerFajenPartners, a media consultingand agency review firm. He can be reached at mike@drexlerfajen.com

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