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Are vampire clients sucking the profitability out of your agency?

Chris Merrington, author of “why do smart people make stupid mistakes? Speaks at the latest BMC agency meeting!

The Business Marketing Club held their latest agency meeting to listen to the expertise of Chris Merrington, on the issue’s that agencies often face with regards to agency to client relationships and getting paid properly.

Chris explained how agencies struggle to do things differently. It’s far too easy to stay in your comfort zone, not challenging the client or brief. As agencies, we want to say yes and please our clients, but we really need to work smarter, step back and think. Break those poor habits and don’t let clients give you poor briefs!

Change is hard, it’s easy to do what you did yesterday!

Agencies blame the client for a lot of issues but it can be the agency itself that’s their own worst enemy. We need to learn to say no! Attendees argued that it really does depend on where you are in your growth to whether you turn down clients. In the begins of your business, you want to build your client base and it’s often too much of an opportunity to say no to a huge pitch and the possibility of winning a shiny new client! But, there’s one thing worse than losing a new business pitch – and that’s winning a new business pitch that’s unprofitable. ALWAYS be selective on what you go for, stick to your niche and NEVER under-price.

So what happens if you take this advice and lose a client? Well actually, according to Chris, his research and even a few attendees on the day, this isn’t necessarily a bad thing. Chris spoke with several agencies and found that when they reduced their number of clients they actually saw an increase in profitability. When Agency heads started to challenge both client and brief, they actually felt more respected. After all, it isn’t just about clients loving you, it’s about them respecting you, right?

If you do lose a good client, then maybe that’s the perfect time to rethink your business. In order to have that 10% growth it’s really about taking action and deciding on what action that is.

We know what we need to do – so do it!

A real eye opener can be when you bring in fresh talent. It can be exactly what your agency needs. Allow them to challenge your way of doing things and allow change. Over half the agencies that Chris has spoken to had turned their businesses around because they had hired a new set of eyeballs, recruit for the agency you want to be.

It’s about getting the right people, recruiting them and retaining them!

Common Agency problems you may resonate with, are finding that after starting that initial conversation with a potential new client, it can quickly change in terms of a reduction in budget. They also admit to seeing scope creed and the challenges that then occur with that extra work, altered budgets and uncontrolled projects.

It was also a growing concern that it can become incredibly hard to speak with decision makers. Chris explained that you’ll find you’ll likely be past to who you sell like. If you articulate some great stuff, you’ll continue to deal with senior staff. Over time you can find you shift down the  hierarchy of staff, when people change it’s difficult to keep those relationships with clients and this can affect decision making.

How do we deal with these problems when they occur?

Be BraveDon’t just say it-do itPush for better briefsYour people have to see what you’re doingLet your senior members of staff set the exampleBe brilliant at a few things not average at 10%Listen and talk to clients, ask them why they love working with you to understand what you as an agency are good at-play to your strengths.

Try changing members of teams currently working for long term clients, to create fresh ideas.Avoid client over dependenceInstigate contractual terms with clientsIf you have under-priced the trick is to now focus on getting new clients at your higher tariff.

Some of our biggest mistakes are our best lessons and understanding how to put a value on your expertise is key. What really resonated from this session is the importance of change and not allowing the process of complacency take effect, so go on – try something new!

Claire Sherriff | Freelance Social Media Marketer

BMC Marketer and Member

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