Why do Clients Fire Marketing Agencies?
The agency selection process is comparable to the dating process. Many suitors (the agencies) present their charm (expertise) in hopes of winning the heart (the business) of the client. But just because the business is won, does not mean that the work is over.
When a client hires an agency, they expect the agency to act as a trusted partner - an extension of the team that helps drive the brand’s marketing strategy forward. As a partner, the agency is required to support, communicate, provide results, and deliver on promises made. Any move outside of what is expected could cause the client to question the entire partnership.
Related: Why do Brands and Marketing Agencies Breakup?
Why do clients fire their marketing agency?
Reason #1 - Lack of Communication
A lack of communication at the very beginning of the relationship can be a warning sign for trouble throughout the partnership.
When an agency fails to communicate…it can lead to the misinterpretation of their core capabilities and assuming the agency can handle projects out of their scope.
Classic pitches and the request for proposal (RFP) process are not always the most best route for finding the most suitable agency partner. This is because agencies become focused on winning the business and may exaggerate their capabilities. The agency is then put in a position where they need to learn skills for the project on the client’s dime.
When a client fails to communicate… it can lead to the agency performing outside of the expected timeline, scope, or budget.
Lastly, unresponsive and/or dismissive dialogue from either party could lead to frustrations and ultimately, the demise of the partnership.
Reason #2 - Misaligned Objectives
Sometimes clients fire agencies because they have different visions for success. For example, if a client hires an agency for help with lead generation and, after three months, the agency comes back to the client with a report detailing an increase in social media followers, the client will be disappointed. Followers do not equal leads. When objectives lack clarity or alignment, disappointment and miscommunication ensue.
Aligning expectations about the brand strategy goes hand-in-hand with communicating effectively and consistently. Every relationship depends on a foundation of trust… and building trust means setting clear expectations and aligned objectives from the beginning. Agencies need to trust that the client has the experience to know their business and industry better than anyone. Clients need to trust that the agency has devoted their time to become tactical experts in their craft and assessing the customer journey.
Reason #3 - Order Taking
Some client-side marketers leverage agencies for the sole purpose of executing a part of their larger marketing strategy. However, many marketers expect more from their agencies. Brands often want agencies to proactively bring new ideas to the table. In order to establish that dynamic, clients need to give their agencies the room to challenge.
Related - Clients and Agencies Should Embrace the “Challenger Sale”
Reason #4 - Staleness
When an agency works on the same account over a long period of time, the relationship can become stale. That staleness often leads to complacency, and complacency can lead to the end of the relationship.
“Clients fire their agencies for many reasons—both founded and unfounded. The saddest reason, and one that typically can be overcome, is when the agency or client becomes too comfortable. Everyone falls into a pattern of crank turning and rote creation—in a way that feels familiar, but may no longer move the sales and marketing needle. If no one is uncomfortable, innovation may not be happening. One of our key accounts has always made it a point to stay on the edge. They may push us and we certainly push them. If that makes the team uncomfortable, we remind them why we’re shaking things up.”
Moira vetter | CEO, Modo Modo Agency
Reason #5 - Agencies Fail to Demonstrate ROI
Agencies have been known to provide “vanity metrics” - metrics that do not showcase the value they provide for the client. It is both the agency and client’s responsibility to establish clear and attainable performance metrics / key performance indicators (KPIs) at the beginning of the relationship. If there is a mutual agreement of what “success” looks like, agencies are better equipped to show the return on investment (ROI) of their marketing campaigns through concrete analytics and detailed reporting.
Reason #6 - Outdated Compensation Models
There are many variations on how agencies can be compensated:
Project Based
Time & Materials
Retainer
Performance
Media Spend Commission
“One of the biggest reasons for breakups is that the pricing models are Industrial Age versus Wisdom Age focused. Hours for dollars (billable time pressures) and RFPs are the bane of the industry.”
Cmo Advisor
How a brand chooses to compensate an agency can greatly impact their expectations. For example, if a brand chooses to put an agency on a retainer, they may expect their agency to regularly bring them innovative ideas. Conversely, if a brand chooses a time and materials compensation model, they may become frustrated when they feel like they're being billed for too many hours. Compensation can rely on a multitude of factors - staffing, budget, scope, timeline, capabilities, and project.
Since choosing the wrong compensation model can impact a partnership significantly, it’s important for brands to think through the expectations they have of their agency. Depending on the situation, a hybrid compensation model is necessary. Whichever compensation model a brand goes with, the goal is to return the best results for the client.
Reason #7 - Feedback
An agency’s performance heavily depends on the feedback they receive from their clients. On the other hand, if a brand makes consistent efforts to give feedback to its marketing firm and no effort to improve is made, then it may be time to cut ties with that partner.
Sometimes a breakup is necessary. However, ending a relationship prematurely could be time-consuming and expensive. Try to salvage your current agency relationship to avoid the costs of onboarding an entirely new agency partner. Sometimes, the prospect of losing a big client can force an agency to learn how to be a better partner. It’s worth the conversation.
If you’re looking to evaluate your current agency to give them the feedback they need to save your relationship, download our free Agency Scorecard. Having trouble selecting a new agency? Check out our Guide to Finding a Marketing Agency.
The average agency-client relationship lasts less than three years. Agency “breakups” generally happen when an advertising agency fails to communicate, respond, or provide results to their clients. However, sometimes clients stay with an underperforming agency. This is because hiring a new agency is a labor-intensive (and sometimes costly) process that involves countless pitches, endless planning, and tedious RFPs.
How can marketing leaders most effectively navigate evaluating their agency partners?