Churn baby, churn

December 17 - trump-youre-fired Having been burned one too many times by one too many prospects/clients who hire us to just turn around and fire us, we've buttoned up our new business screening process. I won't bore you with the details, but it's based on Six Sigma and actually produces a score telling us whether to proceed with the search.

One of the key criteria is 'agency churn.' We ask the prospect how many agencies she's retained in the last three years. If the number exceeds two, we politely decline.

Clients who churn agencies are toxic, and we've had more than our share. For example:

– The technology company CEO who loved our big idea so much that he offered to buy it in the middle of the pitch. He changed his mind, hired us instead, spent a month having us create the infrastructure necessary to implement the idea, and then fired us. Sayonara, Sam.
– The I.T. company marketing executive who hired us in the morning and fired us in the afternoon after learning he didn't have the budget he thought he'd had. Although it happened nearly a decade ago, the account still holds the agency record for 'briefest relationship.'
– The Fortune 500 company PR director who said he was looking for a true strategic partner, turned us into order takers for 15 months and then fired us because 'we were great with ideas, but weak on execution.' It turned out we were his third agency in three years.

Back in the early 1990s, I worked for the now defunct Earle Palmer Brown. We were desperately seeking business at the time and accepted an invitation to pitch Weight Watchers, a company that put the 'C' in churn. We won the business and, sure enough, were fired six months later (that was a matter of making a pact with the devil. We knew WW had a terrible reputation).

Walking away from new business is always difficult, especially in this economy. But, one of our key New Year's resolutions is to make sure the prospect is buying what we're selling. And, if they're notorious for repeatedly blowing up agency relationships, we'll walk away.

One would hope the image and reputations of these churn and burn clients would go up in smoke, but somehow they survive and keep on baiting the latest, unsuspecting agency. I'd love to see the Council of PR Firms survey its membership and publish a top 10 list of the most egregious churners. Talk about providing a value add. Kathy/Matt: how about it?

7 thoughts on “Churn baby, churn

  1. This seems to be a common tale (companies giving and taking, hiring and firing). It sounds like you guys have come up with a good system from limiting them to do the damage. I love the turn churners…

  2. Valid points, Michael. We do factor alongside seven or eight other variables in determining whether to move forward with a prospect.

  3. The examples you cited are egregious and warrant a close examination of new client due diligence. That said, an automatic rule of declining if there were more than 2 agencies in 3 years? Sure, where there’s smoke there’s likely fire. But…maybe the client had bad luck. Or maybe she inherited a faulty team, faulty relationship or a faulty product line. Or maybe she needed to cut her teeth on agency relationship management, she’s now up for the challenge, has an exciting project, and wants to grow with a new agency partner. I’m not saying agency churn should be discounted. But perhaps it should be weighted alongside all the other variables we look at with a requirement to uncover reasons behind seemlingly troublesome data. There’s always a possibility of finding a diamond in the rough.

  4. Thanks, Julie. The bigger mystery to me is how these ‘churners’ hold onto their jobs. One would think their image and reputation would be tarnished as they churn through one agency after another.

  5. Wow…a very enlightening blog, Steve. What this says to me is that these “churners” are lacking in real corporate leadership and management, and don’t understand the first thing about the role of a PR firm.
    Why do these geniuses repeatedly hire firms for their expertise and counsel, only to reject it and turn them into order takers? Would they direct a surgeon on how to operate on them?
    Such a waste of time, money and talent.

  6. We strongly encourage transparency and fairness in the new business process; agencies invest too much (money and manpower) to be engaged too casually. While I don’t necessarily agree that “naming names” is the way to foster good behavior, we strongly support the screening approach you suggest prior to taking on a new business assignment. The Council created “Fit to Win” a few years ago to help firms ask themselves tough questions before pursuing a new business lead. We also recently launched RFP Builder to help clients prepare comprehensive but reasonable requests for information or proposals. (see Let’s keep encouraging a process that’s respectful of the PR firms and productive for the clients.