Each issue of Marketing Week features new agency appointments or client advertising account reviews. Neither agency nor client enters into a new relationship believing it’s going to fail, yet business relationships do break down, some alarmingly quickly, leaving both parties questioning what went wrong. The problem seems to be how can agencies manage and service clients so they remain satisfied and their partnership prosper?
AAR, the search and selection consultancy, recently conducted a study among leading decision makers on both the client and agency side to determine what makes a business relationship tick and what can ultimately make it fail. The research, carried out over five months, was based on in-depth interviews with key decision makers from 46 client companies and agencies. The interviews comprised 26 client companies (managing 185 existing agency relationships) and 20 agencies across the advertising, direct marketing, media, digital and PR disciplines. Respondents recalled 77 individual failed client agency relationships and gave insight into how these breakdowns occurred.
The majority of those questioned (88% of clients and 95% of agencies) believe relationship breakdowns can be avoided, while a small minority (8% of clients and 10% of agencies) think relationships were managed very well – sobering news for all concerned.
When asked what, in theory, can sour the relationship, both clients and agencies give similar responses. The most frequently mentioned reason is the failure of one party to listen to the other. The other most commonly cited reason by clients was the quality of agency personnel.
It would also appear that better planning could help prevent relationship breakdown. Over four in every five clients (81%) and three-quarters of agencies (75%) agree with the statement “setting clear expectations and clearly defining roles is the best preventative measure”.
On a personnel level, there was high collective agreement that “excellent senior relationships can suppress recognition of issues at junior levels”, with 77% of clients and 75% of agencies agreeing with this statement.
However, when respondents were asked to recall their own experience of relationship failure, a marked difference in opinion became apparent between the client and agency sides. Clients tended to focus on “declining agency output” while agencies talked about “people and their relationships”.
When asked about the early warning signs indicating that a relationship is in trouble, 83% of clients focus on their growing dissatisfaction with their agency’s output or service. The most commonly cited response is lack of agency delivery (47%), followed by the agency not meeting/getting the brief (34%), and declining quality of work (33%). Only a minority of clients express concern over conflict or poor relations (10%), with 5% claiming they are not happy with the people, and 3% citing a breakdown of communications. The majority of clients (70%) say they are keen to secure the participation of agreed personnel working on their account, while only 30% of agencies rated this as important.
By contrast, only 41% of agencies focus on clients’ dissatisfaction with output or service. However, 51% mention issues centred around people and relationship changes – their most frequently mentioned responses are “conflict/poor relations with the client” (34%), followed by “client not happy with people” (21%) and breakdown of communications (16%).
When asked how they confronted these issues, clients are more likely to take the bull by the horns, with over half (53%) claiming they air grievances in an official appraisal system. However, less than a third (29%) of agencies recall clients raising issues in an official appraisal meeting. The majority of agencies (56%) and nearly half (42%) of clients say concerns are raised as and when they arise, ad hoc. A worrying number of agencies (15%) were given no warning their account may be under review by clients.
Respondents are asked what, in their opinion, has been the ultimate cause of failure in a relationship. For clients, the two most cited factors are poor agency response levels (“we told them what the problem was, but they didn’t respond”) at 33%, and change of agency personnel (for instance, account managers are replaced by another individual whom the client feels is not as good) at 25%. For agencies, over half (54%) of them cite difficult clients, change of client personnel (39%), and change of client strategy (33%). About a third (32%) of agencies do, however, acknowledge that poor agency response may have been a factor.
Perhaps one of the most disappointing findings of the survey is that 62% of clients and 70% of agencies believe that too few relationships have effective resolution systems.
There is little doubt that agencies and clients need to be more aware of the “Venus and Mars” element in relationships. When clients and agencies are asked about their opinion on the factors that make for a good relationship, there is a high level of complementary thinking. But when clients and agencies recall past relationship failures, a different picture emerges, and there is a sense that clients are managing agency outputs and agencies are managing relationships.
There needs to be a more concerted effort to establish how the client and agency are going to work together from the outset. The AAR research indicates that a break-up could be avoided if working practices are agreed and formalised in writing and practice at the start of any relationship, but the reality is that the focus is on establishing commercial arrangements. This type of forward planning could make for more enduring and successful relationships for both parties.
Kerry Glazer, chief executive of the AAR, contributed to this week’s Trends Insight