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Spotting the signs: how to tell when to resign a client
Nev Ridley, managing director at marketing communications agency Manifest, shares his thoughts on how to tell when it’s time to make a break with business, for the business.
As any creative agency will testify, knowing when to resign a client is a tricky subject. On the surface it can seem counterintuitive to commercial instincts to ever consider cutting your client roster; and yet, by taking a more holistic view of the consequences, doing it can be not only beneficial, but also incredibly important to the long-term future of an agency.
Although it is always a major factor, taking the decision to resign clients is not merely a matter of the bottom line. It is about profitability, but profitability in a wider context. It’s about balancing the impacts and consequences, negative or otherwise, of working with a particular client - from the money they pay you, the demands on time and resources, right through to the personal relationships developed between businesses.
Indeed, by taking the time to analyse how the company is compromised (or benefitted) by a client, you create a perspective that can potentially make a difficult decision surprisingly straightforward. Of course, resigning a client is very much a last resort (most issues can be ironed out with a combination of clear lines of communication, graft and steely resolve), but there are occasions when, perhaps due to one or more of the issues that I will expand upon below, making a clean break is the smart option.
This is simply a matter of resource. If you find that a department (be it PR, marketing or creative) is spending an inordinate amount of time on a single client – time that does not reflect the fee being paid – then something has to give. All good agencies over-service clients to a greater or lesser extent (that goes with the territory), but it’s different if the time spent on the client is consistently and significantly greater than planned for. The danger with this scenario is that allocating too much time to one client can have a negative impact on the service given to other clients – not to mention bringing the staff working on the account to the point of premature hernia. Of course, there are lots of caveats to this particular issue, and a few theoretically simple solutions. You can diplomatically re-align the client’s expectations with the financial facts, or, even more diplomatically, re-negotiate the fee. But if no compromise can be sorted, it might be time to take action.
When a client doesn’t know what they want but expects it all the same. On occasion, clients may feel that they need the experience and expertise of an agency to crystallise what they can expect from the service, which is all well and good. Less good however, are scenarios when a client has unrealistic expectations of what can be achieved, or fails to adhere to pre-agreed working targets and strategies. If a client cannot decide what they really want from a service (particularly in terms of PR) it’s incredibly difficult for the agency as a whole to understand what they are working towards. The consequences of such confusion invariably leads to more time, more doubt, less innovation, and diminished outcomes.
Does the client pay up? Do they pay up ridiculously late? The cash flow of any business is a many-legged monster, and if one of those legs wants to run in a different direction, things can get unbalanced extremely quickly. Any growing agency will have growing overheads; so financial imbalance can become a seriously problematic issue. In most cases, a little reminder gets the job done, but if it is all the time, when time is of the essence, it’s a bad situation.
This is more of a difficult one (and to a certain extent subjective) but it essentially concerns making the judgement that a client’s business might create negative implications for your own. To give an extremely crude example, if you discovered that the clothing company that you represent has its garments manufactured by three to six-month-old children for 0.1p an hour, it might be worth ending your company’s association! Even if you somehow managed to ignore the moral challenges of this scenario, you would still have to seriously consider the reputational impact in terms of attracting new business (or even staff!) in the future.
The ill-fit #1.
Closely linked with the previous point, this involves looking at the client in terms of your existing custom. Almost from a conflict-of-interest perspective, how does a client tally in comparison with the others? If, for example, you specialise in health and fitness clients, projecting associated messages into the public sphere, it might be odd to also represent a burger-producing company. Likewise, if you represent an environmental charity, it might be tricky to also have an oil-drilling client on your books. Such clashes are rare, but if/when they occur they do need to be carefully considered.
The ill-fit #2.
This one is more straightforward and (whisper it) probably familiar to most: the good ol’ personality clash. Sometimes this just happens. It need not mean the end of a business relationship (indeed part of the skill of a good agency is the ability to find a productive way to work with ‘challenging’ client personas), but if personalities start to hinder rather than accelerate work, having a client might do more harm to the business than not. Indeed, it is worth bearing in mind the potential impetus in staff morale and productivity if they find themselves freed from a tyrannical client!
In conclusion, it all comes down to balance, and the foresight to see where things might end up a few years down the line. Being a director of an agency is a bit like manipulating a marionette: to do the dance all the strings need to be operating both individually and in tandem. By the same measure, every now and then one needs to be cut. Make no mistake, you need to push and strive for new business, new clients and new opportunities. But the crux is this: sometimes knowing when to resign a client can actually help to do just that.
Main image provided courtesy of Shutterstock
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