Client turnover means clients changing their advertising agencies. It means clients close their accounts with the existing agencies and switch over to other agencies. Client turnover has negative effect on the agency as it adversely affects its image and also its revenue.
The reasons for such client turnover are:
1. Dissatisfaction with Creative Efforts
Creativity is the essence of advertising. One of the important factors in contracting with a particular advertising agency is creative services offered by it. However, if the client is not satisfied with the creative efforts taken by the agency, he may terminate the contract.
2. Conflict on Payment
If the client feels that the agency is charging higher fees, higher service charges, not passing cash discount received from media, recommending media just for the sake of higher commission, etc. It may result in client leaving the existing agency.
3. Handling the Competitor’s Account
The agency may start handling a competitor’s account. This may force the client to shift to some other agency.
4. Personal Conflicts
Sometimes the client and the top executives of the ad agency have conflict regarding any decision of advertising campaign such as copywriting, copy designing, selection of medium, media scheduling, etc. Such conflicts lead to ego problems among them. It may result with the client leaving the agency.
5. Personnel Changes in the Staff
A client sometimes switches over to new agency when the creative team or key employees oft the existing agency moves out to another agency. Even personnel changes in top executive of client may result in shift to another agency. The new top executive of client may have established ties with some other agency and they may shift to such agency.
6. Unsuccessful Advertising Campaigns
If the advertising campaign launched fails to bring in the desired results (increase in sales/brand awareness etc) the client may contract with another agency for the next advertising campaign.
7. Lack of Coordination and Communication
Poor communication & coordination between the client & the agency staff fails to develop trust & confidence in each other. In such a case the client may leave the agency.
8. Inadequate Services
At times, the client may require additional services & facilities if the agency is not equipped to provide the same the client may shift to some other agency.
9. Insufficient Network of the Agency
The client may plan to enter an entirely new market may be rural or international market. The agency may not have a branch or the capacity to handle this new market. Hence, the client may enter into a contract with another agency.
10. Change of location
A change in the location of agency’s office or the client’s office to another city may also lead to client turnover.
11. New Advertising Agency
When a new agency, comprising of highly creative personnel interest enters the advertising scene, the client may contract with the new agency.
12. Human Tendency to Change
Some clients prefer not to contract with the same agency again & again. They change the agency just for the sake of changing & not due to some genuine cause.
13. Withdrawal of Product from Market
The client may withdraw the product from the market thereby closing the account with the concerned advertising agency.
14. Lack of Accreditation
The agency especially if it a small one might not be accredited by Doordarshan and the INS. Hence, the client may prefer to move to bigger agencies which are accredited.