This article throws light upon the eleven major reasons agencies lose clients. The reasons are: 1. Poor Performance or Service 2. Poor Communication 3. Unrealistic Demand by the Client 4. Personality Conflicts 5. Personnel Changes 6. Changes in Size of the Client or Agency 7. Conflicts of Interest 8. Changes in the Client’s Marketing Strategy 9. Declining Sales 10. Conflicting Compensation Philosophies 11. Changes in Policies.
Reason # 1. Poor Performance or Service:
The client becomes dissatisfied with the quality of the advertisement or/and the service provided by the agency.
Reason # 2. Poor Communication:
The client and agency personnel fail to develop or maintain the level of communication necessary to sustain a favourable working relationship.
Reason # 3. Unrealistic Demand by the Client:
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The client places demands on the agency that exceed the amount of compensation received and reduce the account’s profitability.
Reason # 4. Personality Conflicts:
Personnel working on the account of the client and agency sides do not have enough rapport to work well together.
Reason # 5. 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 whom they have established this. Agency personnel often take accounts with them when they switch agencies or start their own.
Reason # 6. Changes in Size of the Client or Agency:
The client may out grow the agency or decide to take help of 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.
Reason # 7. Conflicts of Interest:
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A conflict may develop when an agency merges with another agency or when a client is part of an acquisition or merger.
Reason # 8. Changes in the Client’s Marketing Strategy:
A client may change its marketing strategy and think a new agency is needed to carry out the new programme.
Reason # 9. Declining Sales:
When sales of the client’s product or service are stagnant or declining, advertising may be seen as contributing to the problem. A new agency may be sought for a new approach.
Reason # 10. Conflicting Compensation Philosophies:
Disagreement may develop over the level or method of compensation.
Reason # 11. Changes in Policies:
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Policy changes may result when either party reevaluates the importance of the relationship, the agency acquires a new (and larger) client, or either side undergoes a merger or acquisition. If the agency recognizes these warning signs it can try to adopt its programmes and policies to make sure that the client satisfied.
Some of the situations discussed here are unavoidable, and others may be beyond the control of the agency. But to ensure maintenance of the account, those within the agency’s control must be addressed.