I have resigned accounts five times as often as I have been fired, and always for the same reason: the client’s behaviour was eroding the morale of the people working on his account. Erosion of morale does unacceptable damage to an agency.– David Ogilvy
“Over to you guys, and don’t muck it up” could be a typical throwaway remark from a business development team to their operations counterparts after the winning of a large contract. Your new client will have done their homework on what you’re like as a supplier during the bid and pitch phases, but have you really done your homework on them?
Field Marshal Helmuth von Moltke’s quote that “no plan of operations reaches with any certainty beyond the first encounter with the enemy’s main force” has endured for a reason. There’s no way that the delivery of a contract will go according to plan. Sh!t happens and like everyone else you will spend some of your time adapting or adjusting as a result of changing circumstances and priorities. That’s why governance models typically insist on periodical business review meetings. If everything ran smoothly you wouldn’t need them.
With luck most of your business relationships will be cordial and productive – even in the white heat of battle. But sometimes you’ll come across a client who just isn’t right for you. These days it’s easy enough to find out informally about what certain clients are like to work with.
Here are a number of questions to consider. Do they have an unsavoury reputation for squeezing vendors and bullying them? Do they pay on time? How often have they wound up in court in dispute with a supplier?
If you have already started to work with them, how are they behaving? Does a client meeting make you feel as though you’ve spent some time with Hannibal Lecter? Is there an increase in attrition on your team? Is the client ignoring the agreed escalation paths and dragging your senior team into play? Are your margins being eroded through the allocation of extra resource to solve problems? Is the client moving the goalposts and changing targets and SLAs at the drop of the hat?
Food for Thought
It may be tempting to tell them to get stuffed – or otherwise – but there are many things to consider before you call your lawyer.
1. Account Manager
Is your own account manager up to the task? A tough client may be a step too far and too soon for a young manager on their way up. A change at the top with an old sea dog can steady a listing ship.
Is your governance and communications model fit for purpose. Review what you’ve agreed in the contract and insist that the client operates within the terms.
3. Contract Clarity
Do both parties share the same interpretation of the terms and conditions of the contract? Are the terms unfairly tilted in the favour of the client over the supplier? Both these issues guarantee a certain level of conflict and resentment. If possible, try to get back to the table to hammer out something that works in everyone’s favour.
While we’re on the subject of contracts, it’s worth asking if you actually have one. Situations arise at times when a supplier is ejected for non-performance or else gives notice and walks away. In the rush to ensure continuity of service both the client and new supplier may end up operating without a contract. Don’t wind up in this situation. If the supplier was fired or walked, try and find out why. If you don’t like what you hear, stay away. If the business looks good, take the time to ensure that you are covered with a tight and fair agreement.
Sometimes it’s simply not feasible to walk away from a contract due to the reputational damage you could suffer. In this instance find a strong account manager who can “take one for the team” and hold their nose as you all count down the months and weeks to your freedom.
Where does your board stand on the issue? Are they ready for their bottom line to take a hit in order to protect you and your team?
What Happens Now?
If you would like to chat more then click on the link below. You can also fill out this business development scorecard for further insights.