There’s a new trend on the horizon that is punching agencies right where it hurts. If you have a gorilla client — beware. They seem to be willing to sever ties in a blink these days.
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Hey everybody, Drew McLellan here from Agency Management Institute. This week I'm coming to you from Minneapolis, Minnesota, home of the Twins and also we are hunkered down waiting for 10 inches of snow. So, while we are staying warm and staying inside, one of the conversations that I've been having with some agency owners that I'm with this week is the whole idea of the gorilla client and the challenges that having a gorilla client presents to agencies of all sizes but in particular small to mid-sized privately held agencies and the truth of the matter is, when we have a gorilla client and my definition of a gorilla client is when you have a client that is worth more than probably 30% of your adjusted gross income, it changes the way you run your business. Now all of a sudden you're making decisions, hiring decisions, tool decisions, location decisions, whatever it may be, you're making decisions around that gorilla client and pretty soon you find yourself and it sort of sneaks up on you, you find yourself running your business as though you are only in service of that gorilla client. And it's easy to say don't let the gorilla be a gorilla, go out and get new clients, go out and balance that gorilla so you have a bunch of monkeys instead but the truth is when you have a client that's 50/60/70/80% of your adjusted gross income, it's really hard to break away from servicing that client because typically they know they're your gorilla and they're pretty demanding and because you are beholden to them for so much of your monthly income, you don't really have much choice but to jump when they say jump and so, for many agencies, the idea of servicing the gorilla and also going out and being aggressive with new biz stuff and having the staff time and energy to devote to chasing after other clients of that size, it's a very difficult balance. But one of the things that I've been noticing over the last six months is this trend where gorilla clients in particular are getting very calculated and very cold about pulling the plug on agencies. So, normally you'd have a contract or a service agreement that says you have a 60-day out or a 90-day out but lately what I'm seeing are clients who are basically just sending an email or picking up the phone and saying you know what? As of today, we're done. Maybe you're getting to the end of the month but not much more than that. And so, when you are in that position, when somebody pulls the rug out from under you and 50% of you AGI goes away, you know what that means, that's severe downsizing, it's cutting all expenses and none of that sets you up to be successful in earning new clients. So, I guess my message is to you, if you have a gorilla client, if you have a client that's worth 30% or more for your AGI, you have to carve out the time, you, the owner, have to carve out the time to chase after other clients that are going to help balance that out. They're going to reduce your risk and also allow you to run your agency the way you want to run your agency rather than the way your client wants to run your agency. So, my message to you is if you've got a gorilla, you've got to strategize with your team on how to reduce the influence of that gorilla and the best way to do that is other clients that are sort of relative to their size. I know, it's a lot easier for me to say than for us to do. But if you don't have a plan, and you don't start working on the plan, it's never going to happen. And this new trend is making me very worried for all of us that clients who have, who know that they are the lion's share of our business are not really treating us with the respect that we have earned with them. So, be careful, protect yourself and try and balance out that gorilla. I'll talk to you next week.
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