Most people agree that retention carries more weight in a digital agency than any other key performance indicator. In fact if you are one of the individuals persuaded of this you are in good company. Forbes actually claimed that client retention rules, or as contributor Jerry Joa titled his article, “Customer Retention is King.”
If client retention is king then the arch nemesis of the corresponding kingdom must be none other than attrition. And who is the chief knight of this royal adversary? Enter Sir Improper Expectations. Any digital marketing agency seeking to increase their dominion in the great realm of retention must deploy a strategy for setting proper expectations.
What follows are some tips on how to unsheathe your sword, look attrition in the eyes and say, “On guard!” Or, if you don’t like the fact that I just blurred the lines between the Middle Ages and the Renaissance, just imagine yourself jousting.
Setting Proper Expectations Begins in Sales
Leaving medieval times, let’s fast forward to the industrial age and imagine being able to run attrition through a distillation process. Actually, before we do that, I’ll need to disrupt your now distracted mind that is embarking on daydreams about your favorite beer to clarify that I am referring to distilled water. I know… not as exciting but easier to draw parallels from.
If the above logic is true (about attrition, not beer) it is likely that most of the impurities that would be found during vaporization could be traced back to misaligned expectations. The initial countermeasure for remediating this “bacteria” then would be to set proper expectations right out of the gate. Where better to do this than the initial sales call?
What this really boils down to (no pun intended) is asking the right questions during sales calls in order to influence the essence and reasonableness of a prospect’s expectations.
What Are Your Prospect’s Expectations?
Any business developer or sales executive who does not know what their prospect’s expectations are by the end of their initial discovery call has not served their prospect or organization well. After all, the ultimate yellow brick road to closing any deal is going to be best paved by answers to prospect questions that are designed to uncover their needs and hopes. Any ensuing paid invoices established outside of this critical step are nothing short of sheer luck and likely to exacerbate your attrition.
Let’s face it, unless you are well versed in extrasensory perception you simply cannot assess the viability of a prospect’s expectations if you don’t even know what they are. You’d be about as likely to succeed here as someone playing pin the tail on the donkey with no target. In that case the only real question becomes, “Will the real Jack please stand?”
Are Your Prospect’s Expectations Reasonable?
Equally important to understanding what your prospect’s expectations are is being able to discern whether or not they are realistic. In its most basic form, a realistic expectation is simply one that the agency under consideration has the capacity to meet.
If the expectations are unable to be satisfied this is typically due to a lack of knowledge on behalf of the prospect or a lack of resources on the part of the agency. If the latter is true, then the only reasonable next step is to encourage your prospect to continue their searchーa suggestion that may just win you referral business given how grateful people are for transparency and acts of deference.
I’ve been thanked many times for being willing to turn potential business away that I did not believe was going to be a good fit for our agency. My employees would probably thank me as well if they knew what manner of grief they were being spared from!
If the expectation disparity has more to due with a lack of understanding on the part of the prospect then the next logical step is to roll your eyes and verbally encourage the prospect to quit kidding themselves. No please don’t… we’ve all been in need of some readjusting at some point in our lives.
What you really want to do is engage in some consultative education in hopes of being able to align the prospects expectations with reality.
In its most basic form, a realistic expectation is simply one that the agency under consideration has the capacity to meet.
Can The Prospect’s Expectations be Influenced?
In my experience working at digital agenciesーincluding my ownーI have seen many would-be clients come to the discovery table with unreasonable expectations.
Now, I’ve never been asked to juggle while reviewing conversion stats; however, there have been some legitimate, misguided hopes. From someone with a $500/mo budget who wants to get on a call every week, to another treating paid media like a genie that will give them an instant fix to their lack of revenue, there is no end to prospects who simply don’t understand digital marketing.
This is no time for cynicism, mind you, because our prospects’ ignorance equals job security for digital marketers. In these situations we may have to educate them on the role that statistical relevance plays in strategy calls or the necessity of data-driven decisions that are contingent on the patience-requiring process of populating data. In some cases we may need to revisit fundamental mathematics to demonstrate how one simply can’t expect to generate 40 leads a month when the average CPL (cost per lead) is $75 and they have a $1500/mo budget.
These are worthwhile conversations that will keep your knowledge sharp, enable you to showcase your expertise, provide value and hopefully enable you to meet their revised expectations as well as retain their continued business. We’ll be further elaborating on the benefits of qualifying your prospects in a future article.
Win-Win or No Deal
Stephen Covey, author of one of the most famous books on leadership, 7 Habits of Highly Effective People explained it well: if a mutually beneficial situation can’t be reached, then both parties “agree to disagree” and both walk away with no hard feelings.
A point of no small significance in his treatise on this concept is how this is more probable at the beginning of a relationship. You have to be willing to walk away when it becomes apparent that a relationship between your company and your prospect will not be a win-win. Unless you have a personal vendetta against a cruel employer or are looking for a creative way to go out of business then it is not going to be worth pursuing.
As enticing as another paid invoice may be, you are much better off with a no deal and reallocating the resources of your organization to clients that are less likely to result in brand defamation (think one-star reviews), anxiety, frustration, refunds, and less referrals.
You have to be willing to walk away when it becomes apparent that a relationship between your company and your prospect will not be a win-win.
Make Sure You Are Asking More Questions Than Your Prospect
One of the main takeaways here is that you need to be the one asking the most questions. As you do you’ll actually start to feel like you are the one interviewing them, when it is technically supposed to be the other way around.
Consider a prospect who is interested in online advertising. You will need to ask questions that uncover the current state of their business to make sure they are not looking for a miracle to save them from some pending doom. Paid media may feel instant in comparison to search engine optimization but it still takes some time.
One of the most important questions you’ll want to answer is whether or not you are going to be able to generate a meaningful ROI for their business. This is where collecting stats about average lifetime values and closing rates come in. What about their intake process and bandwidth? If you drive qualified leads to them are they going to be able to hold up their end of the deal by answering calls and following up with them professionally? Do they even have the capacity to handle a surge in business?
While this is by no means an exhaustive treatment of what questions you want to ask, the hope is that it drives home the point that you need to be asking the most questions and they need to be doing the most talking. As you can see, you’ve got your work cut out for you here, but it will be well worth it.
Setting Proper Expectations
Believe it or not, it is possible to have month-over-month, record-breaking sales while consistently ending quarters in the red. This happens when you have low retention, and results in you running in a resource-sucking giant hamster wheel that does not yield profitability or morale. If you thought that simply closing deals was the most important role of your sales team, I hope this breakdown has encouraged you to reevaluate that goal.
I believe that particularly inadequate sales model can be completely overhauled with one word, right. You want to make sure you are closing the right deals, which are won from prospects with expectations that can actually be met by your agency.
If not, then you must pull out your “no deal” stamp, cut your losses and move on. Worst case scenario, you spare your agency from less than optimal profitability and potential grief. Best case scenario, you win a client who will stick around for a long time and turn into a brand ambassador worth tens of thousands of dollars in retainers and referrals.