It has often been said that great creative work wins new accounts, while poor relationships lose them. The recent loss of the Mars account by D'Arcy is an example of how agencies, which for years have been urging clients to listen to consumers more, are suffering relationship breakdowns because they aren't listening to their consumers - the clients.
Some agencies argue that it is impossible to listen to the client when that client has lost respect for the agency. But have agencies become complicit in this breakdown? Adam Kirby, who has recently joined Diageo as global head of advertising procurement, after 15 years in agencies, thinks maybe they have.
"The quality of the strategic and creative output is often let down by archaic processes, lack of meaningful collaboration and wayward cost management; the result is an obscuring of the enormous contribution that great campaigns make to the bottom line."
But some agencies argue that listening needs to be a two-way street. Gary Duckworth, chairman of Duckworth Finn Grubb Waters, argues that "just as important, it makes sense for our clients to listen to us in return because we have skills and experience that they can harness to their advantage".
For agencies, the costs involved may represent a relatively small investment. Bain, the consultancy group, estimates that a 5 per cent drop in client churn can raise profitability by 20 per cent. The average account tenure is five years, and if that is prolonged by just one year, a significant financial benefit can be had.
Such analysis suggests that while most agencies have new business budgets, it may be worth having a client retention budget. For clients, the benefits of smoother, long-term relationships with agencies may outweigh the costs involved in finding new ones.
It is hardly surprising then, that more clients and agencies are conducting regular assessments of how both parties work together. Some companies bring in third parties to analyse the relationship and make recommendations on how things can be improved.
Cilla Snowball, chief executive of Abbott Mead Vickers BBDO, says: "As well as doing ongoing individual client-by-client audits ourselves, we also have an external audit across all our clients once a year." Clients have reported that the fact that an agency wants to do this says volumes for their commitment to improving the relationship.
One company that has set up in response to this perceived need is Relationship Audits and Management. Carey Evans, of RAM, likens it to being a marriage guidance counsellor. People might listen more attentively through a professional mediator or tell him things that they won't tell each other. Evans' role as "counsellor" is exemplified in the story of the chief of a London agency who, during the pitch process, offered to spend a morning every week with the marketing director. The marketing director declined this apparently generous offer, because the agency man had bad breath.
Blind spots such as this occur because the advertising business is so focussed on the product, the next commercial. There is no formal training on the most critical aspect of effective business management - client relationships.
Obviously, training requires a degree of investment. Most agencies and clients agree that the ideal funding formula for an appraisal of a relationship is to split it 50/50. With a split like this, there is a commitment to making the relationship more productive from both sides. In this way, both parties are open to implement changes.
Max Burt is planning director at ad agency Eighty Twenty.
