Ad agencies are under pressure to search for new sources of business
As most leaders know, one of the reasons agencies continually have to fill their new business pipeline is because current clients can choose to take their business elsewhere at any point.
To add to the uncertainty, not all agencies can rely on long term retainer-based agreements as many clients prefer a more flexible and shorter term project-based approach to their agency partnerships. This means that there is even more pressure on agencies to search for new sources of business.
Clients buy in to individuals
Clients can become dissatisfied with their agencies for a multitude of reasons but it’s not always about poor customer service. One of the key reasons is the turnover of agency staff.
People do business with people. Clients build strong relationships with individual agency team members, usually from the account management team, and if one or more of these key people decide to leave the agency, the client doesn’t feel as tied to the agency and could end up putting the business up for pitch.
Agencies need to address high staff turnover
According to the 2011 agency consensus published every year by the UK’s Institute of Practitioners in Advertising, total staff turnover in member agencies, excluding redundancies was 26.1%. The UK’s average staff turnover is 15%.
So agencies need to work hard to ensure they reduce turnover to reduce the risk of losing clients. If you are running an agency and concerned that your staff turnover is too high and threatening your client retention, here are 5 actions you can take right now to address this issue:
1. Spread the relationship risk
Ensure that no client relationship is ‘owned’ by one individual in the account management team but that several people spend quality time building and managing the client relationship. This will look different for different agencies depending on the suitability, level and availability of individuals. The key point is to spread the relationship among several individuals and not have all your relationship eggs in one basket.
Start by analysing all your clients and identifying who the key point of contact at the agency has been, the strength of that relationship and whether there needs to be others introduced to the relationship to spread the risk. You can start involving more people at key meetings or on a social level.
2. Audit client relationships regularly
The quickest and easiest way to find out who the client sees as their key agency people is to ask them! The most effective way to do this is to choose an independent company to interview your clients which takes out any bias and allows the client to talk very freely.
Companies such as Relationship Audits & Management are a highly trained international firm of consultants who specialise in auditing client/supplier relationships. They can literally uncover a gold mine of information for you.
Clients are usually impressed that you have made the investment in such a firm to find out what your clients really think and you’ll be amazed what clients will reveal when thoroughly questioned for 40 minutes about you, the agency and your relationship.
This is an ideal opportunity for you to ask what they are looking for from you as their agency partner, who they see as the your agency’s ‘stars’ and what they’d do if those stars left. This type of audit can often reveal new business opportunities for you too that you didn’t even know existed!
3. Pay attention to staff training, development and salaries
Don’t make the mistake of neglecting to review the salary levels of your top performers. You can be sure that they know exactly what the industry standard is and will be able to tell you, to the month, when their last pay review was. Check that you’re paying them what they deserve.
Salary reviews should be linked with performance reviews so make sure you have a good, thorough performance review process in place which is carried out religiously every 6 months and is centred around the goals and aspirations of your staff.
Invest in regular training to meet your team’s specific performance requirements and ensure everyone feels like they are learning and growing with the company.
4. Empower your team
The book Drive is a must read for any agency leader as it talks about how we have moved from the industrial age to the information age and how it’s essential that staff are given autonomy and feel empowered to control their work.
Gone are the days of ‘command and control’ style company management that stifles your team’s creativity and desire to take ownership and control of their work. There is nothing more off-putting than being micro-managed.
The more empowered and free your team feel to control their work, less likely they are to want to leave.
You may find that a complete re-think of agency management and leadership structure is called for.
According to a report by the Ignition Consulting Group called “How Clients Define Value in the Agency-Client relationship”, clients want “an agency that is versatile enough in its structure, systems and business practices to be able to emulate an in-house department of the client”.
The report suggests what is needed is a new look at how agencies are structured citing things like “small teams that are empowered to make decisions about the project”, “constant collaboration and daily scrums” and “iterative development/work constantly improved based on customer feedback” as key changes to agency practices. This may mean restructuring your management team.
5. Acknowledge and get to know your team
In an agency’s highly pressurised and busy environment it’s easy to overlook individuals and fail to recognise their need for you to acknowledge them. As an agency leader you are looked to for your guidance and leadership but also it means a lot when you engage with individuals and recognise their work efforts.
Get to know your team personally, find out what’s important to them, how they like to work, what they’re good at and acknowledge them both individually by giving them positive feedback on a one-on-one basis for good work as well as publicly in front of the agency.
By keeping the lines of communication open, your team feel more connected with you and the agency which encourages a feeling of belonging. Examples include:
– Take time to chat to people before you start your day
– Hold monthly agency meetings where you share objectives, targets, progress as well as acknowledge individuals for outstanding work
– Organise team socials on a regular basis
– Involve yourself in key project meetings to stay in touch with work progress and team performance
– Always make the effort to speak to every agency team member and remember the conversation when you engage next time
– Ensure your formal performance appraisal process is in place every 6 months
What other ways do you think are important to reduce your team turnover?
