Is There Really a Client Lifecycle?

Wiki states that the average person remains at their job for 13 years. Sounds good, right? I mean 13 years. True, it’s an unlucky number for some, but better to be employed for any time in this economy. Heck, states that the average US marriage only lasts 8 years.

So, maybe it’s the advertising industry that is averaging down the 30-year gold watch anniversaries. A Spencer Stuart Blue Paper cites that: “It’s jarring to note that the average tenure for CMOs at the top 100 branded companies is just 22.9 months. Based on our data, only 14 percent of CMOs for the world’s top brands have been with their companies for more than three years — and nearly half are new to the job over the last 12 months.”

Just as in the lifecycle of a marketing manager, I often hear about the “lifecycle of a client” with an ad agency. I took an informal poll with some peers, and most stated that they expect to work with a client for about 4-5 years and then poof – the client goes off to perceived greener pastures. In fact, a client of ours stated that 4 years for an agency/client relationship is long, (pause for reflective swallow, as we’re in year 3).

So, does a client have a lifecycle and why? OK, this is where the stats stop and theories start, so jump off the bus now or open your mind…

Let’s say your contact at your favorite client makes it past the 22.9 months and actually wants to make a career out of it. That doesn’t mean that everyone else there does and he or she probably reports to a COO or CEO who may in fact report to a Board or Shareholders. Results have to keep coming. Here is why they may not be…

I hear things like, “the creative just wasn’t exciting anymore” or “no new ideas” or “just time for something different”. Yes, often, the creative goes stale, but it is not, in my opinion for a lack of creativity. Sounds weird huh? I’ll explain. By year three, the creative should be more on target and yielding much better results. I mean, you’ve been doing your unaided and aided branding research studies every year right? What client doesn’t want to pay for research? Never heard of such a thing…but, I digress. We’ll post about that later.

Here is my theory…The creative is there, the account is known better than ever and results should be increasing. But, you are now working in fear. What fear you say? The fear of losing the client.

When agencies go after a new client, one of my most and least favorite parts of being an agency principal, most go all out – balls to the wall – creative juices flying everywhere. We do. Why? Because they’re really not invested financially in the account. The revenue they could earn is “hope to get” money. “Hope to get” money is fun. It’s like a lottery ticket before you check the numbers.

But when an agency lands a client, it needs to staff up appropriately, buy needed research studies/tools, join relevant associations, upgrade some software, spend some time meeting with some new subcontractors – it’s time and money. So, the new “hope to get” money gets spent quick. You start servicing the client with all these tools, are in the new-relationship love affair with the client and integrating the new tools or new people into your team.

After a year, you’ve produced some results, the client is loving you, but you’re also loving the new tools, team members etc. Now, the money is still there, but it’s no longer “hope to get” money, it’s “need to have” money. It’s need “need to have” money because you’ve made all the commitments to service the client and it’s not like you were out there going after more “hope to get” money because you’ve been busy trying to get your new relationship off to a good start, and your team was already running thin anyway in this economy and you may not have the manpower to win new business and win over your new client at the same time. You made a choice.

In your second or third year with a client, you’ve now gotten accustom to running your shop with the new tools/resources etc. and have forged personal relationships with your new team members. They are really part of the team now – your family. You’ve met their families, understand their hopes, dreams and really care for them. Now, you’re afraid. You’re afraid of letting them down. You’ve put yourself in a position where the “need to have” money is “gotta have” money. You know that if you lose the client, you’ll lose the revenue and ultimately may have to lose some of your team members.

So, you as a manager may stifle the great ideas that are on the edge in favor of more conservative ideas that are “mainstream.” You don’t push the client anymore. You agree too much. You say you think “their ideas” are good whether they are or not. All, because you’re afraid to lose the client and by doing so, you do just that. You lose the client. No client wants a “yes man.” They want new exciting invigorating ideas. That is why they came to you at first, right? Are you afraid to give them what you feel they may not want? Are you afraid to push the envelope?

Like most things, it revolves around money. I hate that part of the industry. Really, I do. Most people who think they know me, think I’m all about the money, but the people who really know me, know I’m not. I’m about family, first, second and last, and my team at the office is part of my family.

Do I think there is a client lifecycle? Yes, for some clients, for some agencies. But, I believe it is not because of the talented team of people in your agency. It comes from fear and we, as leaders, need to be stronger, bolder, more willing to take risks – even in today’s economy, especially in today’s economy.