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July 21, 2004
Is Long-Term Relationship an Oxymoron?

The client/agency relationship is a complicated one. It is a partnership of buyers and sellers. This is almost unheard of in any other industry or any other facet of life involving more than two people. In order to maintain such a precarious relationship, there are two keys: respect and trust. Each must be earned and awarded. Neither can be taken for granted. Both must survive over time and must be reestablished with every change of the people involved in the relationship.

Until about 15 years ago, the relationship between agency and client was institutionalized. Both sides were fairly stable organizationally. Both companies involved were run by management who had grown up in the culture and were used to "partnering" for many years. The personal relationships between the advertiser and agent were solid, their lives were intertwined. The companies were loyal to each other. It was harder to change agencies than to resolve occasional issues.

The fabric of this corporate loyalty dissolved when the American economy forced companies (on both sides of the relationship) to merge and purge, downscale and reengineer. People moved. The respect and trust client and agency had for the other was gone because they were dealing with strangers. It became often easier for a new client to move to a new agency and establish a new relationship than to maintain the remnants of an old one with old habits and emotional baggage.

And then there was the issue of cost. In the mid-eighties, ad agencies shot themselves in the foot by killing off the commission based compensation structure. Compensation fees based on labor and performance allowed clients to redefine the parameters of both. This, coupled with the rise of the Agency Holding Company, commoditized the relationship.

So, how do you get back to the days when clients and agencies are loyal to each other? You rebuild the respect and trust. How do you do that? You build day by day, person by person, with proof that the respect and trust are earned.

When I speak to clients who are changing agencies, they almost always tell me that their old agency is no longer living up to their expectations. What are their expectations? To be treated as a valued client whose knowledge of his or her business is greater than the agency's and whose opinion is solicited and counts. They expect the agency to be proactive and provocative, but not out of control. They expect their instructions to be followed. They expect their team to be responsive and responsible. They expect to have influence over staffing issues.

They expect enthusiasm. They expect good communication.

They expect that the agency will not find their expectations unreasonable.

Enduring client/agency relationships still exist. The companies involved nurture each other. They orchestrate team building. They formalize and communicate their expectations and their measures of performance. They never take each other for granted. They encourage trust and respect and do not tolerate arrogance. Most importantly, they recognize that this precarious partnership is not an even one. It is the client's money, the client's career and the client's risk, so every decision is always, finally, the client's call.

Keeping a client is more profitable than winning one. Agencies need to invest in their existing relationships. Not with entertainment, but by infiltrating their client's business lives, by becoming part of the operational fabric. They need to understand their expectations and prove that, while they may have different needs, there is only one objective - growing the client's business.

If agencies learn to treat their existing clients the way they treat a perspective client and clients listen with the same open-mindedness they do in a new business pitch, client retention will soar.

Why would I tell you all this when it could put me out of business? Because, it is human nature to get too comfortable and start taking your "partner" for granted. Prove me wrong.

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With client and agency relationships more tenuous than ever, Linda Fidelman is in demand. As founder and CEO and president of ADvice & ADvisors, she helps agencies keep their clients through relationship counseling, compensation plan development and best practices to preserve the relationship.

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