In this comprehensive guide, we'll delve into the common mistakes that can undermine marketing agency client retention efforts and uncover expert tips to overcome these challenges. From communication breakdowns to strategic misalignments, we'll explore the factors that can erode client trust and satisfaction, as well as practical strategies to strengthen agency-client relationships and drive long-term success.
The importance of client retention
Apart from more obvious reasons such as profitability and cost-efficiency — retaining existing clients often costs less than acquiring new ones — there are a couple of good reasons why marketing agencies should strive to improve client retention.
- Revenue stability: Retaining existing clients ensures a stable revenue stream for the agency. By maintaining long-term relationships with clients, agencies can reduce reliance on new business acquisitions and fluctuations in revenue associated with client turnover.
- Predictable workload: Retaining clients provides a more predictable workload for the agency's team, allowing for better resource planning, staffing decisions, and project management. This stability can improve productivity, efficiency, and overall client satisfaction.
- Opportunities for growth: Long-term client relationships offer opportunities for upselling, cross-selling, and expanding the scope of services provided. Agencies can capitalize on these opportunities by demonstrating value and building trust over time to drive incremental revenue and business growth.
What are the common mistakes that lead to poor client retention?
Before we offer actionable tips on how to improve client retention, let’s identify the most common mistakes that lead to negative client experience and churn.
Failure to demonstrate value
The key is to balance delivering realistic results, but also taking the time to ‘wow’ clients every once in a while to show the agency knows exactly what they’re doing, and why clients should stick with their services over others.
Gareth Bull - Founder of Bulldog Digital Media
Not effectively demonstrating the value of their services and the impact on clients' business outcomes can make agencies seem expendable. This situation can breed several long-impacting issues:
- Clients may question ROI: Clients invest in marketing services with the expectation of receiving a return on their investment (ROI). If the agency fails to demonstrate tangible results or communicate the impact of its efforts on the client's business objectives, the client may perceive their investment as wasted or not delivering sufficient value.
- Become reluctant to invest more: Clients may start questioning the value of continuing to invest in the agency's services if they do not see clear evidence of the benefits and impact on their business. Without tangible results or evidence of effectiveness, clients may become hesitant to allocate budget to ongoing marketing efforts.
- May start exploring alternatives: If a client feels that their current agency is not delivering value or meeting their expectations, they may explore alternative options and consider switching to a different agency that offers a better value proposition and ROI.
- Lose interest in additional services: If clients are not convinced of the value provided by the agency's core services, they are less likely to invest in additional services or expand the scope of work. This limits the agency's ability to grow revenue and maximize client lifetime value.
Prioritizing short term-targets
A client who stays for the long term is bought into everything you do, not just the ads. At Megaphone we take the time to understand our clients' priorities and long term goals so that we can lead their strategy as marketing experts and strategic business partners.
Sarah Tikfesis - CEO & Head of Operations @ Megaphone
Prioritizing short-term targets over long-term growth can have detrimental effects on client retention in a marketing agency and, with time lead to:
- Lack of strategic planning: Concentrating on quick wins and immediate results at the expense of long-term strategic planning can lead to a lack of alignment between agency activities and client objectives, resulting in ad-hoc tactics that fail to deliver sustainable value or drive meaningful outcomes for clients.
- Inconsistent performance: Short-term thinking can lead to inconsistent performance as agencies chase after short-term gains without considering the broader implications for client relationships.
- Missed opportunities for value creation: By focusing solely on immediate needs and quick wins, agencies may fail to invest in strategic initiatives or creative solutions that could set them apart from competitors and add long-term value to client engagements.
Poor communication
Having poor SOPs and communication can often lead to missing deadlines or not responding to clients in a timely manner which isn’t good for a long successful relationship with clients.
Matt Pyke - Founder @ Fly High Media
Failing to maintain open and transparent communication with clients can lead to misunderstandings, missed expectations, and dissatisfaction. In more concrete terms:
- Clients might have unrealistic expectations: When there is a lack of communication, clients may have unrealistic expectations about the scope of work, timelines, deliverables, and results. Misaligned expectations can lead to disappointment, frustration, and dissatisfaction, ultimately impacting client retention.
- Deadlines and deliverables missed: Clients rely on timely delivery of marketing campaigns, reports, and other assets to support their business objectives. When deadlines are missed or deliverables are delayed due to poor communication, it can erode trust and confidence in the agency's ability to deliver results, leading to dissatisfaction and potential attrition.
- Lack of strategic collaboration: When there is a lack of communication, it's difficult to engage clients in strategic discussions, brainstorming sessions, and planning meetings. This can result in missed opportunities for innovation, creativity, and strategic alignment, hindering the agency's ability to add value and drive business growth for the client.
Overpromising and underdelivering
The first mistake I see marketing agencies usually make is overpromising and underdelivering, it has to be the opposite, or else you lose the trust of your client. Setting the right expectations from the start is vital to client retention!
Dylan Hey - CEO @ Hey Digital
Making unrealistic promises or guarantees about results can set unrealistic expectations and lead to disappointment if those expectations are not met. The problems that can arise from this situation include:
- Loss of trust in agency’s competence: Clients rely on their agency partners to provide accurate assessments of what can be achieved within the scope of work and timeline. When an agency overpromises and fails to deliver on its commitments, it undermines the trust and credibility that clients have in the agency's capabilities.
- Unrealistic expectations: Overpromising can set unrealistic expectations for clients, leading them to expect results or outcomes that are not feasible or achievable within the constraints of the project or campaign. When the agency fails to deliver on these unrealistic expectations, it can lead to disillusionment and a sense of betrayal on the part of the client.
Lack of strategic alignment
Identify what really drives their business and be a strategic partner in making those dreams a reality. Build trust by managing their marketing effectively, so they can focus on what they love—running their business and creating amazing products.
Josh Gazelka - Director of Account Management @ Thrive
Failing to align marketing strategies and tactics with clients' business goals and objectives can lead to ineffective campaigns and wasted resources. The resulting issues may develop as:
- Disconnection from the client objectives: When there is a lack of alignment, clients may feel that the agency is not fully invested in helping them achieve their business objectives. This disconnect can lead to frustration, dissatisfaction, and ultimately, a breakdown in the client-agency relationship.
- Ineffective campaigns and tactics: Without strategic alignment, agencies may develop marketing campaigns and tactics that are not well-aligned with the client's target audience, brand identity, or business goals. This can result in ineffective campaigns that fail to resonate with the target audience or drive meaningful results for the client.
Not being proactive and innovative
The biggest mistake in our industry is made by agencies that forget their role as proactive contributors. Agencies that strictly follow the client's brief will ultimately disappoint, unlike those that push boundaries and offer ideas beyond the initial scope.
Pierre-Baptiste Borges - Head of Business Development @ Odace
Failing to adapt to changing market conditions, trends, or client needs can make agencies seem outdated or irrelevant. As a result, agencies risk:
- Missing on opportunities to offer innovative solutions: Adaptability and innovation enable agencies to identify and capitalize on emerging trends, new technologies, and untapped markets that could drive business growth for their clients.
- Failure to meet evolving client needs: Agencies that fail to adapt to these changes risk falling out of step with their clients and failing to meet their evolving needs. Clients expect their agency partners to be flexible, responsive, and adaptable to changing circumstances, and failure to do so can lead to dissatisfaction and attrition.
- Weak differentiation and value proposition: A lack of adaptability and innovation can make agencies seem indistinguishable from competitors, leading to commoditization and price competition. Clients may perceive little differentiation between agencies and be more inclined to switch to competitors who offer more innovative and differentiated solutions.
Poor client onboarding
First thing is not setting the expectations with a client and poor overall onboarding process. Many agencies bring the best people during the pitch and then assign other people to the project which often leads to frustration on the client side.
Vedran Karaman - Founder @ KARAMAN Digital
Inadequate onboarding processes can lead to confusion, misunderstandings, and dissatisfaction early in the client relationship. The risks that stem from this situation include:
- Misaligned expectations: Effective client onboarding sets the stage for a successful partnership by establishing clear expectations, goals, and deliverables. When client onboarding is poor, clients may have unrealistic expectations about the scope of work, timeline, and outcomes.
- Lack of clarity and direction: Client onboarding provides an opportunity for the agency to communicate its processes, workflows, and project management procedures to the client. When onboarding is poor, clients may feel confused or uncertain about the agency's approach, leading to a lack of clarity and direction in the partnership.
- Underutilization of agency services: When onboarding is weak, clients may not fully understand or appreciate the value of the agency's services, leading to underutilization of resources and missed opportunities for growth.
Not building strong relationships
Provide value beyond contracts - offer insights, additional services and expertise that goes beyond contract. Don't just be a service provider but build a personal relation with clients. Understand their industry and business culture and be integrated with their in-house team
Vedran Karaman - Founder @ KARAMAN Digital
Neglecting to build strong, personal relationships with clients can make agencies seem transactional and disposable. Building rapport, trust, and mutual respect with clients can foster long-term partnerships and increase client loyalty and retention. Otherwise, agencies may experience:
- Limited client loyalty: When agencies fail to prioritize building strong client relationships, clients may feel less invested in the partnership and more inclined to explore other options. This lack of trust and confidence can lead to dissatisfaction as clients seek out partners they feel they can rely on and trust to deliver results.
- Difficulty resolving issues: Strong client relationships provide a foundation for effective communication and collaboration, making it easier to resolve issues and address client concerns. When agencies fail to build strong client relationships, communication breakdowns and misunderstandings may arise, making it more difficult to resolve issues and meet client needs effectively.
- Missed opportunities for upselling & cross-selling: When agencies fail to build strong client relationships, they may miss out on opportunities to expand the scope of work and increase revenue from existing clients. This can result in stagnation and missed growth opportunities for the agency, ultimately impacting its long-term success and viability.
8 Expert tips for improving client retention
Let’s now explore proven techniques to improve client retention by expanding on expert quotes provided by experts from marketing agencies like yours.
1. Proactively demonstrate value
Reporting. Clearly and transparently display the results from your campaigns, in addition, ensure that you include the work undertaken with commentary, and future work to be done. A bonus is to include any industry updates in reports to explain how things may impact them and how you are navigating them, such as new Google algorithm updates.
Matt Pyke - Founder @ Fly High Media
To improve client retention, agencies must prioritize value demonstration by measuring and communicating the impact of their services on clients' business objectives, showcasing ROI, and consistently delivering results that exceed client expectations.
- Highlight key accomplishments, successes, and milestones achieved.
- Providing regular reports and performance metrics that showcase the impact of the agency's efforts on client goals and objectives can help reinforce the value of the partnership. Use time-saving marketing reporting software that automates most of the process.
- Always seek opportunities to go above and beyond client expectations by offering strategic insights, recommendations, and innovative solutions that drive tangible results.
2. Establish clear communication channels
A lot of agencies tend to forget that communication is key in the collaboration between agency and client. Being pro-active, being honest and being good in communication are really important besides the results that are being accomplished.
Lars Maat - Owner @ Maatwerk
To improve client retention, marketing agencies must prioritize clear, transparent, and proactive communication with clients, ensuring alignment of expectations, timely delivery of work, responsiveness to client concerns, and strategic collaboration.
- Establishing clear communication channels is the first step in fostering transparency, trust, and collaboration between the agency and its clients.
- Ensure that clients have access to multiple communication channels, including email, phone, and project management platforms, to address concerns, provide updates, and ask questions.
- Regularly scheduled check-ins and status updates can help keep clients informed and engaged throughout the duration of the project or campaign.
3. Set realistic expectations
To meet client expectations, agencies must ensure mutual understanding of what success would look like to the client. This can be done by setting clear, realistic goals and communicating effectively.
Dylan Hey - CEO @ Hey Digital
Overpromising and underdelivering can have serious consequences for client retention, agency reputation, and business success. To mitigate these risks, marketing agencies must set realistic expectations, accurately assess capabilities and resources, communicate transparently with clients, and consistently deliver on their promises to build trust, credibility, and long-term client relationships.
- Always be transparent about what can realistically be achieved within the scope of work, timeline, and budget, and avoid overpromising results that cannot be delivered.
- Clear communication and ongoing dialogue with clients about project progress, challenges, and adjustments to the plan can help manage expectations and minimize surprises.
4. Deliver consistent performance and results
Constantly work hard for a client even when it's the 'same old same old' - the client usually still has a good business. An agency gets paid to deliver great results constantly.
John Ring - Managing Director @ Tinderpoint
- Strive for excellence in every aspect of their work, from strategy development and creative execution to campaign performance and results analysis.
- Regularly monitor and optimize campaign performance. Identifying areas for improvement, and adapting strategies as needed can help ensure consistent delivery of results that meet or exceed client expectations.
- Using flexible marketing dashboards allows you to stay on top of your client’s marketing data and quickly identify the areas for improvement.
5. Provide strategic guidance aligned with client objectives
Strategy - fully understand the client's business, objectives, and KPIs. Strong focus on consultation and strategy before you start marketing anything.
Brian Maher - Director @ Adaptive
- Take a consultative approach to client relationships, seeking to understand their business goals, target audience, and competitive landscape.
- Regularly review and reassess client strategies and tactics to ensure alignment with evolving market conditions, industry trends, and client needs.
- Position the agency as a trusted advisor and strategic partner to clients, offering valuable insights, industry expertise, and actionable recommendations.
- Conduct regular strategy sessions with clients to explore new opportunities, address challenges, and develop innovative solutions to drive business growth.
6. Embrace adaptability and innovation
Educate clients on the latest innovations and changes happening in the industry, demonstrate what your agency is doing to navigate and guide clients through these challenges
Brian Maher - Director @ Adaptive
- Agencies should continuously monitor industry trends, technological advancements, and emerging best practices to identify opportunities for innovation and differentiation.
- Experimenting with new strategies, tactics, and technologies, and being willing to take calculated risks can help agencies stand out from competitors and deliver innovative solutions that meet evolving client needs.
7. Develop an effective client onboarding process
We tend to start the client-relationship with a couple of sessions in which we try to determine the goals of the client. We try to break them down in realistic and ambitious targets with a roadmap. Within our Whatagraph dashboard, those targets are the first thing that pops up. So both us as the client are constantly being reminded on what we are trying to achieve together and how we are doing on that.
Lars Maat - Owner @ Maatwerk
- Agencies should have structured onboarding processes in place that include clearly defined roles and responsibilities, project timelines, and communication protocols.
- Providing comprehensive onboarding materials, orientation sessions, and regular check-ins with key stakeholders can help ensure that clients feel supported and informed from the outset of the relationship.
8. Prioritize relationship building
It is essential to understand the 'Why.' Why does the client engage us? What is their goal? Why can’t they do it themselves? Etc. A deep understanding of the foundation of the relationship is necessary for it to be healthy and achieve both explicit and implicit objectives.
Pierre-Baptiste Borges - Head of Business Development @ Odace
- Agencies should invest time and effort in getting to know their clients on a personal level, understanding their business goals, challenges, and preferences.
- Building strong relationships with clients involves proactive engagement, active listening, empathy, and a genuine commitment to their success.
- Regularly checking in with clients, celebrating successes together, and showing appreciation for their business can help strengthen the bond between the agency and its clients.
Conclusion
In this comprehensive guide, we’ve explored the common mistakes that can undermine agency client retention efforts and uncovered expert client retention tips to overcome these challenges.
From providing exceptional service and delivering tangible results to communicating them clearly, each tip offers valuable insights and guidance for marketing agencies looking to drive sustainable growth.
Implemented in your agency setting, each tip can become an acorn that propagates more client retention ideas closely related to your agency’s internal processes.
Find more client retention strategies, expert guides, and resources on our Agency Hub page.
