Gaining and Losing Clients

Last Updated on Wed, 08 Nov 2023 | Marketing Communications

The evaluation process described above provides valuable feedback to both the agency and the client, such as indicating changes that need to be made by the agency and/or the client to improve performance and make the relationship more productive. Many agencies have had very long-lasting relationships with their clients. For example, General Electric has been with the BBDO Worldwide agency for over 80 years. Other well-known companies or brands that have had long-lasting relationships include Marlboro/Leo Burnett (50 years), McDonald's/DDB Needham Worldwide (34 years), and PepsiCo/BBDO (44 years). Exhibit 3-8 shows an ad run by Dr Pepper/Seven Up Inc. celebrating its long-term relationship with the Young & Rubicam agency.

While many successful client-agency relationships go on for a number of years, long-term relationships are becoming less common. A survey conducted a few years ago by the American Association of Advertising Agencies found that the average tenure of client-agency relationships declined from 7.2 years in 1984 to 5.3 years in the late 90s.25 In recent years a number of long-standing client-agency relationships were terminated. Levi Strauss & Co. terminated its 68-year relationship with Foote, Cone & Belding, of San Francisco, in 1998 when it transferred its U.S. jeans account to TBWA/Chiat/Day. However, just three years later the company moved the account to Bartle Bogle Hegarty, the agency that handles its advertising in Europe.26 In 2002 Saturn Corp. ended its long relationship with Hal Riney & Partners, the agency that had been with the automaker since its debut in 1990, and moved to Goodby Silverstein & Partners, San Francisco.27 IMC Perspective 3-3 discusses how Gateway has changed agencies four times in the past 10 years.

There are a number of reasons clients switch agencies. Understanding these potential problems can help the agency avoid them.28 In addition, it is important to understand the process agencies go through in trying to win new clients.

Why Agencies Lose Clients lose clients follow:

Some of the more common reasons agencies

• Poor performance or service. The client becomes dissatisfied with the quality of the advertising and/or the service provided by the agency.

• Poor communication. The client and agency personnel fail to develop or maintain the level of communication necessary to sustain a favorable working relationship.

• Unrealistic demands by the client. The client places demands on the agency that exceed the amount of compensation received and reduce the account's profitability.

• Personality conflicts. People working on the account on the client and agency sides do not have enough rapport to work well together.

• Personnel changes. A change in personnel at either the agency or the advertiser can create problems. New managers may wish to use an agency with which they have established ties. Agency personnel often take accounts with them when they switch agencies or start their own.

• Changes in size of the client or agency. The client may outgrow the agency or decide it needs a larger agency to handle its business. If the agency gets too large, the client may represent too small a percentage of its business to command attention.

• Conflicts of interest. A conflict may develop when an agency merges with another agency or when a client is part of an acquisition or merger. In the United States, an agency cannot handle two accounts that are in direct competition with each other. In some cases, even indirect competition will not be tolerated.

• Changes in the client's corporate and/or marketing strategy. A client may change its marketing strategy and decide that a new agency is needed to carry out the new program. As more companies adapt an integrated marketing communications

© The McGraw-Hill Companies, 2003

Continue reading here: Gateway Searches for the Right Ad Agency

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Readers' Questions

  • christian
    Why ad agencies gain gain accounts?
    1 year ago
    • Ad agencies gain accounts because they provide services that can help businesses reach their marketing and advertising goals. They provide expertise in areas such as brand identity and recognition, campaign planning and execution, media buying and placement, and creative design. Ad agencies also help businesses understand their audiences and target their messaging more effectively. Ultimately, ad agencies enable businesses to reach a larger audience and to more effectively promote their offering.
    • genet tewelde
      How do agencies gain and lose client?
      1 year ago
      • Agencies gain clients by offering a higher quality of service, developing a positive reputation in the industry, having strong connections within the profession, and providing competitive prices. They can also gain clients through promotional activities such as advertising, PR campaigns, and social media. Agencies lose clients when they fail to provide a satisfactory service, have poor communication with their clients, or when a client decides to switch to another agency. Poor customer service, a lack of innovative approaches to problem-solving, and simply not meeting the client’s expectations can lead to a client switching to another agency.
      • eustorgio
        How advertising gain and lose client?
        1 year ago
        • Advertising can gain clients by increasing brand visibility and recall, as well as by creating a positive image and positioning in the minds of potential customers. Furthermore, targeted advertising can create a stronger connection with their desired demographics, leading to increased sales. On the other hand, advertising can lose clients by creating a negative perception of the company, by not targeting the right audience, or by not adequately communicating the brand message. Poorly executed advertising campaigns can lead to a lack of customer engagement and trust, as well as a reduced desire to purchase the product or service. Additionally, too much advertising can often lead to consumer fatigue and a sense of boredom.
        • richard
          How do advertising agencies gain and lose clients?
          1 year ago
          • Advertising agencies gain clients by providing successful marketing campaigns that result in increased sales, brand recognition, and overall customer satisfaction. Agencies can also gain clients through referrals and networking. Advertising agencies may lose clients when their campaigns are not effective, when their services are too expensive, or when the client's needs are not met. Additionally, agencies can lose clients if they are unable to keep up with the changing trends in the market.
          • Arto
            How advertising agencies lose clients?
            1 year ago
            1. Poor Communication: Poor communication between the agency and the client can lead to miscommunication, deadlines being missed or other general issues.
            2. Unmet Expectations: If the client’s expectations aren’t met due to a failure in the agency’s work, the client may decide to take their business elsewhere.
            3. Poor Budget Management: Poor budget management on the part of the agency can lead to the client feeling as if their money is being wasted.
            4. Lack of Transparency: The lack of transparency in an agency’s processes can make the client feel out of the loop and that their input isn’t valued.
            5. Inadequate Results: If the agency’s work is not producing the desired results, the client may decide to look elsewhere for a more effective solution.