For a small to midsize agency, one of this business' most dangerous situations is having a large account. We define a large account—a “gorilla”—as one that controls more than 30 percent of an agency’s AGI. Most accounts become gorillas with smaller agencies because the agencies do well and the clients keep growing. “If that’s true, why do they leave?” you may ask. Well, believe it or not, many of them leave their current agency because they have grown to such a size that they feel a bigger agency can best navigate the very difficult marketplace they must confront each and every day.
Yes, it’s true. Big accounts generally don’t leave because their smaller, more efficient agencies have let them down. They don’t even leave because they are sold, merged or hire a new marketing director with other agency contacts, although all of those things happen to one extent or another. Big clients leave your agency mostly because they want increased status.
Gorillas Offer Leverage
The loss of a gorilla is always traumatic to the agency that loses the account. Sometimes it puts them out of business. At the very least, it causes them to list heavily to one side for a year or so, until they can replace the business.
What to do?
“Don’t take gorilla accounts; they are too dangerous,” you suggest. We disagree. Gorilla accounts can be very important to an agency’s growth and maturation. They permit them to do work we would have never been able to do for smaller accounts with smaller budgets. Following is some advice about gorilla accounts.
Never stop your new business process regardless of how busy you might be working for your larger accounts. Remember these words and paste them on your wall. All gorilla accounts leave. It may be next month or next year, but take my word for it, they move on. A very powerful new business program is the only thing that will protect you when they decide it is time to move on to greener pastures.
Along the same lines, always stay in loose contact with all of your gorilla’s competitors. This is a smart move for two reasons. First, they may be your next big account; and second, they may be your leverage with your current gorilla. No company wants to have their information, procedures, marketing strategies and other important information in the hands of competitors. If a client terminates your agency, in many cases you could take what you know to the nearest competitor. Not that you would, but you could. This, perhaps, is a deterrent to your gorilla client dismissing your agency too quickly.
The most important advice we can give you about a gorilla account is to use it to get yourself another gorilla account. “Yikes!” you say. “We have trouble enough with one; how could our agency handle two?” Well, that’s just what one member agency did last year. They had been concerned that their largest account, a manufacturer of paints and stains, was too big for them. They began working with this account when they billed less than a million dollars and five years later the billings were $4.5 million—39 percent of the agency’s AGI. They were unable, naturally, to get another paint manufacturer, but they worked hard to understand the DIY industry and the channel. Sure enough, last year they pitched and won a national manufacturer of lawn mowers and tractors. The common denominator was their knowledge of the big-box channel: Home Depot, Lowe’s etc. This win moved their agency to a projected $8.1 million and took the paint company down to 18 percent of total AGI—a far more comfortable percentage of their business.
The truth is, the best time to grow and succeed is when you are on a roll. Objects that are in motion tend to stay in motion until something stops them. The trick is not to be your own brick wall.
See The Numbers at a Glance for more on the distribution of agency income per client, as well as other important agency financial ratios.
