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Why You'll Never Keep All Your Inbound Marketing Agency Clients - And What To Do About It!

Posted by Mike Lieberman on Jun 21, 2018 7:38:00 AM

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No Matter How Good A Job Your Doing Clients Are Going To Transition Out

Inbound Marketing Agency Client Retention StrategiesGrowing your inbound marketing agency is harder than you thought right? After all, almost everyone tells you; follow this playbook, buy this software, sign up for this training and attend this conference and you’ll grow up big and strong.

Now you know it’s not nearly as easy as that and if it was all the agencies would be $10 million by now. If fact, its exponentially harder than almost everyone tells you and one of the reasons its so hard is that clients don’t stay with their agencies forever—so you’re constantly working to fill up the leak in the bottom of your client bucket.

Since clients are always leaving, you have to have a new business effort that outpaces the inherent retention challenge.

Let’s look at this situation in more detail and let’s look at some mitigation strategies.

The History of Client Retention In The Agency Industry

You might have forgotten already but before you started charging retainers and providing ongoing services, you lived project to project.

Retention was something you hardly thought about and only if you were lucky did your clients transition from project to project, without missing a month. Most worked with you, took a break and maybe they came back. You had to rebuild your pipeline month by month.

Now it’s better, but what made you think clients were going to be with you forever?

Karl Sakas says that if you have a retention rate of greater than 80% you’re doing ok. At Square 2, we work on a 90% target retention rate and we’re pretty close to that month over month.  But traditional agencies typically see lower retention rates and if you do more projects you could be looking at retention rates pushing 50%.

It’s not just your challenge, it’s a challenge for all of us and its not going to go away, it’s a business condition you have to learn how to deal with, instead of trying to solve.

Clients are NEVER going to stay with you, paying you month over month for 20 years.  

Why Clients Leave

Clients leave for a lot of reasons and most of them have nothing to do with you. Let’s break them down and look at what you might be able to do to limit the exodus as much as possible.

They’re taking it in-house – Clients don’t want to have to pay you $10,000 or even $5,000, month after month forever. They view marketing and sales enablement, even more, as work that gets down, gets set up, gets rolling and then they can run it themselves.

They want to hear during the sales process that they’ll be able to run their marketing machine on their own. Honestly, I want them to be able to take it inhouse and run it on their own. We find it very fulfilling and part of our mission to help clients learn inbound, learn the new buyer journey, set up their lead generation machine and then take it in-house.

So, if we do our job, clients are going to leave and that’s something we’ve accepted.

However, there are some strategies to mitigate this just a little. First, make your engagements flexible enough to downshift into strategic coaching as they start taking tactics in-house.

Next, leave the engagement with the understanding that if they need help, you’re available and very happy to get back involved.

Finally, stay in touch with old clients. As they work internally, they may need some reminders that you’re available to help. Emails, regular check ins and invitations to client events, even if they’re not actual paying clients anymore.

In fact, if you think about past clients as current clients you might find more coming back and more asking for help.

They hired a new Director/Manager – When the economy is good, clients like to hire. Right now they’re hiring marketing directors and marketing managers to take over your program. They think its cheaper, they think its more controllable, and they think they might bet better results. We’ve seen the opposite occurs more frequently, to learn more check out this infographic.

Regardless of the reality, once they bring someone new in a lot can change. The new person might be threatened by your team, the new person might want to put their stamp on the program, they new person might have their own agency relationships.

All this means keeping the client after they bring on a new manager more and more unlikely.

What you can do to mitigate this situation is to help clients hire their new marketing person. We typically help our clients (for a fee) find and hire their new marketing leader. In some cases, we participate on the hiring team and in other cases we might provide resumes left over from our own hiring process.

Another tactic that works well involves how you onboard the new marketing manager. Just like you onboard your own team members, consider onboarding your client’s new hire the same way. Let them know what you’re doing, why you’re doing it, how you’re doing it. Train them on all the methods, processes, systems and playbooks your agency users.

By doing this you might endear yourself to the new marketing director, get her up to speed faster, help her look better at her new company and have her feel comfortable working with you, not against you and having you around longer.

The program isn’t working as well as expected – This might sound like you deserve to get fired, but its not always so clear and rarely is it 100% your fault, regardless you have a challenge to overcome in this case.

First, you might have set some unrealistic expectations during the sales process. Next, they might have not followed your advice or delayed rollout of key tactics. Regardless you have an underperforming program.

One of the best mitigation tactics here is to get out in front of it. Meaning that you have to tell them its underperforming before they tell you. And in some cases, you might want to consider proactively ending the underperforming engagement before your client does.

There are a number of agencies I know who tell clients, before they sign, “we’ll work with you for a few months and if things start to work, we’ll keep going, but if they don’t, we’ll just agree to go our separate ways.” Not a bad upfront contract and agreement.

Remember, in most cases the reason the program isn’t performing is because of the client, not because of you. Are their behaviors really going to change? Probably not.

They want to cut the marketing budget – We all know the first line to get cut when the business goes bad is marketing. It’s the wrong line, but it’s the line everyone goes to anyway.

Even if you’re getting them results, cutting the budget might be their only action to save money.

One way to mitigate this scenario is to create flexible retainers. This means clients are NOT locked into paying you the same amount for 12 months, but the monthly retainer can move up or down depending on their business conditions or depending on the results you generate.

We’ve been using the flexible retainer model for the past two years and clients actually raise their monthly spend 25% of the time and only decrease it 5% of the time. Not only does this hold the client when times get tough, but it gives you a vehicle for them to increase spend when they see better results.

You’re getting them leads, but they’re not converting them to new revenue – This is the most common at Square 2. It’s been symptomatic of the state of business since we started the agency and why we’ve provided sales enablement services for the past 10 years. It’s also why you need to provide sales enablement services too.

Clients are as bad turning leads into revenue as they are generating leads in the first place. To limit this reason for leaving, pay special attention to ALL the leads you generate for clients.

Make sure you get copied on every notification, follow up with sales on every lead, ask the client for updates, check their CRM for status, review each lead generated in detail every month and most importantly—remind them as much as possible that you can help them do a better job working those leads through your sales process so they close faster, close more frequently, close for higher dollars and keep spending money with you month over month.

They want to try something different – This is actually one of the most common reasons for clients leaving and this is one of the most common reason clients leave big agencies too. You might be doing a great job and you might have been doing a great job for the past three years, but the grass is always greener, and they want to see what it’s like to work with another agency.

To some extent, I don’t even fault them for wanting to try another firm. It makes sense in my head. They can always come back and they might be missing something by not trying out another agency.

One of my favorite TV shows is Mad Men, and one of my favorite scenes is when they get their first car company (a big deal for ad agencies) and Roger Sterling turns to Don Draper and says, “you know, we’re just one day closer to losing them (the new car company account).” It’s really true, clients leave for some very mundane reasons, like simply wanting to try another agency.

There is very little you can do to prevent this. When this does happen, be gracious, be supportive and used some of the tactics we discussed above to stay in touch with them in the case they do decide to come back. 

You really do suck and you get fired – Not to be blunt here, but having coaching hundreds of agencies, I now you’re getting fired because you’re still not very good at inbound, lead gen or ongoing marketing execution. Unfortunately, there’s not much I can do about that except encourage you to put the time and energy into getting better and getting better fast.

There might be a couple of other scenarios, but this makes up 90% of what we’ve heard over the years. You can see that only one is directly related to a service failure. Now you could argue that a few of the others might be related to a service failure too but typically those scenarios are the result of a shared failure on the part of you and your client.

In fact, most of the failed engagements have fault on both sides but that’s rarely relevant to the client.

You should be proactive about retention. You should know your retention rate and your average tenure of a client in months. These should be KPIs that you’re actively working to improve month over month.

Part of this planning definitely includes knowing you won’t keep all your clients forever. Which means start planning to lose 30% of your clients and the associated revenue each year and make sure your new business plan accounts for this and replaces that revenue plus your growth dollars require to hit your revenue goals.

Next, start implementing as many of these retention strategies as possible and make sure you’re honing your own lead generation and revenue generation skills, so when it comes to review time, your client is thinking, “we’re doing so well, we couldn’t’ possible consider letting Square 2 go, we need them to get to our revenue goals next year.”

An Agency Cohort is launching this month. If youv'e been waiting to be a part of it, now is the time to join. We have seats in the Masterming Group available too. If you want to be part of a member driven group. click here for more info on both options. Click the box below for the Agency Cohort. 

GET INTO A COHORT TODAYStart Today Tip – This conversation starts with setting realistic expectations and then delivering results. There are no two ways around it. Deliver impressive results and your retention rate will go down. But regardless of your results, you’ll still have clients who want to leave. Make sure they leave in a structured, elegant, proactive and friendly manner. Make sure that if they do leave, they know they can come back and make sure that if they leave, you stay in contact with them. This will produce a steady stream of returning clients and ongoing, long term paid relationships with people even if they don’t work with you on a monthly basis.

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Topics: client retention

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