The Vulnerability of Digital Agencies to Economic Stagnation
How can we arm ourselves against the departure of lots of clients?
I love this question so let’s answer it in two halves.
Question 1: What is the vulnerability of digital agencies to economic stagnation?
Answer: This is either a huge opportunity or a huge threat: is the glass half-full or is it half-empty?
Economic stagnation seems to loom on the horizon. All the doom and gloom merchants are peddling their wares: economic cycles, property cycles, stock exchange cycles, banking cycles, oil cycles, demographic cycles all point to another recession in 2020-2. Add to this the other factors:
Political: the collapse of authority, the growth of global brands’ power
Social: communication far more effective and cheaper than ever before
Technological: faster and more transparent access to everything
Legislative: law makers failing to put the citizen first
Environmental: real concerns about sustainability of almost everything
2020-2022 looks bleak.
All businesses will be vulnerable. Unless they smell the coffee and respond to the changes in the outside world.
Question 2: How to arm ourselves against departing clients?
This may not be quite the right question but let’s try and answer it from several angles.
Why do clients leave you?
On the whole, they leave because they feel they are getting a rubbish service. Either they feel they are not getting value for money or they feel that they are getting poor customer service. At its simplest, all the stats for all professional service firms suggest that most clients leave because they feel unloved!!!! So, get closer to your clients. Offer awesome value…offer awesome added value… but frame this all from their point of view.
Why would clients leave you in a recession?
In a recession there is more pressure on clients to save money, to cut costs. But you shouldn’t be costing money for your clients. You should be making them money. If they see you as a cost, then you have failed. Either you have failed to deliver a you have failed in how you present your offer. You job for your clients is to attract customers at a decent cost. If you can’t do that then why should clients buy from you?
What can you do to make them stay?
People will stay if they think they are getting great value for money. If they think you are better than the competition. If they think you are looking after them properly. So, do you demonstrate why you are better than the competition? Do you show them more love than the others? Do you deliver overt business benefits and a real reason to believe that you can deliver?
A large part of my answer is that you might be coming from the wrong angle when asking the question although I can understand your concerns.
Coming from the wrong angle?
We are back to the basic question, “Why should people bother to buy from you?”. If you are the same as the competition, then I can’t think of a single reason.
You need to get into the heads of your target customers. What are their problems? What are their hurts, needs and wants? Why do they buy your service? What do they want your service to be able to do for them? And how will that help them to get what they really want? Until you understand the psychology of the customer then your marketing will be the same as everyone else…
So, I would ask, “Who is in my tribe and why do they want to work with me and what can I do to help them solve their problems?” I would engage with them and their problems. I would avoid being a supplier and become a trusted advisor.
Is this all intellectual claptrap? I don’t think so. You need to craft your offering around the worldview of your clients. Otherwise you will be competing on price. And they will leave if someone with a cheaper offer comes along.
In a recession, you will lose clients who are battening down the hatches etc. They may be the wrong clients for you and you would probably lose them in any case. For me the issue is about getting your marketing and position sorted out. So that you are the people the clients turn to when times get tough. So that you are known for delivering awesome added value. So that you are part of the solution to every client’s question, “How can my business survive this recession?”