Every client your digital marketing agency wins is cause for celebration. Hearts and high-five emojis are exchanged. Monthly all-hands meetings get thumbs up as team members report onboarding a great new brand. There is a feeling of hope and positivity in the air…
But then you come to that figure nobody likes: client churn. Agency leadership stops smiling and the whole team looks with worry at graphs representing valued customers slipping away. It’s such a common feature of company reporting that churn takes on the appearance of acceptable loss, even while client managers are constantly being tasked with decreasing it. Even keeping a single important customer for a few months more can have a significant impact on agency stability.
And that’s why I’m excited to be sharing with you some original research from Promethean and GatherUp today which could help you retain clients for an additional 12 months if acted upon by your brand. Get the full report here, based on a proprietary survey of 90+ digital marketing brands, or read on for some salient points first.
Why your agency should be less accepting of churn
When I was running a small digital marketing agency back in the early years of SEO, the victories of onboarding a new client were truly sweet, and the clients we managed to keep happy stayed with us for years. Any loss was a serious threat to our bottom line, and so we continuously went above-and-beyond for our customers, taking calls at any hour of the day or night, doing extra work unpaid, and befriending as many business owners as we could as allies in their own personal professional stories. It was all very hands-on, and as manual as digital marketing can be. Many of my colleagues then were running their agencies along similar lines.
The rise of automation and self-serve marketing products has provided convenience and the possibilities of scale, but it’s also created an attitudinal change about churn. Volume can make us less concerned about client “stickiness,” based on the belief that there are always more prospects out there to replace the ones that slip away. While there’s truth in this, writing off churn as an acceptable business loss needs rethinking because of its impact on:
- Profitability – It’s far less expensive to keep existing clients satisfied than to have to replace them with new sign-ups. When you think of the money, time, and effort that goes into winning each new customer in the form of advertising, SEO, content development, product development, salesforce activities, and so much more, churn is very costly.
- Reputation and referrals – It’s hard to build an industry-leading reputation when churn is high. Brand reputation is largely made up of customer experiences and 55% of consumers trust what their peers say about businesses over what businesses say about themselves. Even a massive marketing budget can’t paper over all complaints from local business owners about agencies that haven’t satisfied them.
Meanwhile, dissatisfied customers represent a loss of valuable word-of-mouth referrals. Small-to-medium business owners frequently belong to local or industry business associations to pool knowledge about the products and services that are working for them. A high degree of churn almost certainly results in a loss of leads.
- Brand morale – No agency, product, or service is perfect, and your team quickly becomes expert at customer pain points with your offering because they are regularly hearing the complaints from clients that eventually lead to cancellation. Healthy brands view problems as opportunities and arrive at solutions that boost retention in a timely manner. Conversely, digital marketing practices on the downward slope ignore problems and fall back on the risky belief that a high churn rate represents a standard and acceptable loss.
In the latter scenario, little by little, every member of your agency’s team comes to understand that your brand doesn’t care about its customers enough to solve their needs, and how can anyone feel excited or motivated working in this situation day-after-day? I’ve begun to think there’s a connection between attitudes about both staff and client churn that is quietly undermining the outlook of the digital marketing industry.
Some degree of client churn is inevitable. Brands misunderstand the capabilities of services they sign up for, or they grow beyond the scope of what particular products provide, or their own business ideas don’t succeed and their budgets disappear. But, at the very least, your agency can minimize the very high costs of churn by offering low-risk managed client services that research shows improve retention rates.
By the numbers: the stickiness of managed reputation services
The intangibility of some digital marketing services can make it hard to define attribution and prove value. Reputation management stands apart because nearly all local brands, both large and small, immediately understand the importance of improving metrics like average star rating, review velocity and recency, review responsiveness, and consumer sentiment. Where marketing budgets exist, reputation management is one of the easiest sells.
But it may not be currently part of your agency’s menu of offerings. This is where managed client services come to the rescue, enabling your brand to appeal to more clients via a partnership with a trusted reputation management solution provider. The impact on retention can be eye-opening.
Promethean finds that clients using agency-managed reputation management services are retained an average of 12 months longer than baseline retention rates. They also generate up to $400 more in monthly cross-sold services due to tangible proofs of reputation improvement for the client, significantly increasing client lifetime value.
Promethean’s base scenario assumes a media retention lift (+12 months), while an upside scenario can assume a greater tenure impact (+24 months), and a downside scenario can be much more conservative (+6 months).
Data suggests that adding managed client reputation services can have a dramatic stabilizing effect on your digital marketing agency due to increased customer satisfaction. Partnering with a trusted brand like GatherUp delivers a client-retention mechanism and a cross-sell enabler that can give your agency the ability to focus on client satisfaction instead of chasing replacements for lost accounts.
Added benefit: re-engaging churned accounts
Poaching is a reality of the digital marketing sphere. The local business owners in your current client roster are constantly being contacted by your competitors, trying to woo them away with better-seeming offers.
If your agency has lost clients in the past due to limitations of your offerings, adding new services via new partnerships creates a golden opportunity to re-engage cancelled accounts in a we-meet-again moment in which your brand has something of real value to communicate.
A past client who was happy with your Google Business Profile management, content marketing approach, or on-page SEO services but who left for seemingly greener pastures because you couldn’t meet their reputation management needs may now be finding themselves missing the quality of your customer service because their new agency is dropping the ball.
Imagine re-engaging such customers with a personal outreach, explaining how much you miss working with them and that you took their complaints to heart and have now expanded your menus with a professional reputation management solution you think they’ll love. What an ice-breaker!
Pro tip: If your agency isn’t currently tracking the causes of churn, implement this practice as quickly as possible. Try not to let clients leave before they’ve explained why they’re cancelling. This data is vital to creating a customizable path to re-engagement at a later date when you have something new to offer old clients.
Real-world tips for minimizing churn
Because GatherUp specializes in reputation management, we have a unique level of access to real-world data about consumer retention and loss. Why not take a page from our book on how local business owners win back unhappy customers when it comes to strategizing how your agency might re-engage some of its lost accounts?
GatherUp surveyed 1000+ US consumers about how they are impacted when, after leaving a negative review for a local business, its owner responds with a solution to their complaints. It turns out that:
- Nearly 7/10 consumers are willing to give a brand a second try once their dissatisfaction has been resolved
- Nearly 5/10 consumers find that they have such an improved opinion of the brand, once their complaint has been addressed, that they are willing to update their negative review to reflect a better subsequent experience
- More than 3/10 consumers are willing to recommend a brand to their peers because of how well it handled their negative feedback
While digital marketing agencies and local businesses occupy slightly different industry spheres, these takeaways on customer satisfaction via complaint resolution are highly relevant. As mentioned, two of the risky costs of high churn rates are a loss of good reputation and a loss of referrals.
GatherUp’s recent consumer behavior survey suggests that clients being lost due to limitations of your current service menu could be won back if:
- You add new solutions via internal development or new agency-managed service partnerships
- You take the time to outreach to cancelled account holders with an eagerness to share the news of your expanded menu, based on having attended to their complaints
Not only this, but the clients you’ve re-engaged may then be happy to refer your agency to their local and industry peers.
Further reading
Promethean’s research not only suggests that agency-managed reputation services provide a powerful vehicle for minimizing churn, but also that they can deliver a 37% increase in profits in the first year of onboarding. These benefits are just the beginning of our findings on strategic methodologies for agency wins. Why not download Promethean’s full report and bring it to your next all-hands meeting?
