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Should you resign a client if they’re not paying enough?

Typically, there are three ways of evaluating whether a client is good or bad for your business: fun, fame and fortune. And if a client ticks at least one of these boxes then that is probably enough to mean a ‘no’ to resigning them.

What I mean by fun are things like: do the staff really enjoy working on that piece of business? Is it a client that is trying to do something good for society and make a difference in the world? Does it give you a buzz to do the work?

In terms of fame: does working on that piece of business give some kudos to the agency? Is it good for your agency PR? Can you do more creative stuff with that client that means you might be more likely to win awards?

And in terms of fortune, looking at things in pure revenue terms is probably not the only lens to look through. You need to analyse profitability and make sure that you’ve got the right measures in place to do that accurately (and by that, I don’t mean just relying on timesheets). You often get cases where a client paying a smaller fee is actually much more profitable than a big one.

You’ve also got to evaluate the short-term versus long-term. Could that client be one you can grow with because it has potential? Does it offer a foot in the door to other brands that could perhaps be sources of new business? Are there important personal connections that you could make through working with that client that money can’t buy?

Additionally, I think that it’s never a good look for an agency to resign a client. An agency with a reputation for that can make a client nervous as they shouldn’t have taken on the business in the first place really.

I can count on the fingers of one hand the amount of times I’ve resigned a client over the years. It was never about money. They were only in cases where the client turned out to be incredibly rude to my staff or bullied or harassed them. There was another case where a client started to act completely unethically. In all these cases it was a straight red every time.

Written by Graham Goodkind who is a Dutch Uncle – a new type of non-exec business adviser – to several agencies in the marketing services sector, in addition to being founder and chairman of Frank.

If you have got a question for our agony (Dutch) uncle regarding any issue relating to the running, operations, business or financial aspect of a PR agency, either as an owner, manager or executive, then email and your question may be featured in a coming issue.

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