Your agency’s success largely depends on your client roster and the employees who work on that roster. The ultimate goal of any service-based operation is to have a great team that establishes long-standing relationships with those who will continue to re-up contracts with you year after year. But sometimes, even the most loyal clients will ask to pause services, leaving your agency and your staff in limbo, and unsure how to proceed.  

At Future Proof Advisors, not only do we have experience advising several agency members, but we are also former agency owners and operators. So it’s safe to say that we have been in this exact position many, many times and have learned a few things along the way about how to keep things steady during difficult times. 

Nine things that we always recommend an agency do (and that we’ve done ourselves!) when a client hits the pause button:

1. Identify why the client is pausing in the first place. It is important to remember that being a good partner and trying to understand your client’s situation is key to maintaining any trust you’ve built.  Though it may seem like a no-brainer, getting to the bottom of the issue may help you make key decisions about how to proceed. Is your client pausing because they are waiting on budgets? Is it because of a shake-up in company leadership? Did they have a down year? Were they unhappy with the services you provided? Identifying the answers to these questions may help you telegraph the likelihood of them “unpausing” and how quickly they may do so. It can also help you hone in on ways for you to be of service during what may be a difficult time for your client as well. Stay focused on their needs, and don’t make the pause all about you or your agency.   Of course, there are those times when despite the best intentions, your client cannot or will not give you an answer. Either they don’t know when they will be able to pick back up or things are going on internally that they can’t divulge. When this happens, it can be extremely frustrating for you as an owner, as well as for your team who is likely to have serious concerns about their job stability.  This leads us to #2.
2. Communicate. We can’t stress enough how important it is to be open and transparent with your team. In the agency world when a client pauses or cancels services, employees start to get extremely nervous.  If you don’t maintain frequent communication, your team is likely to make up stories about what’s going on.  And most often these stories are far worse than the truth.  It’s best to be forthcoming and let staff know the situation and what your plan is for managing that situation. Also, don’t forget to stay in constant communication with your client. Your instinct may be to give them some space or not bother them – but we find that regularly checking in and offering them advice or help getting over whatever hump they are facing can be extremely beneficial. Be a good partner to both your staff and your client. This will always pay good dividends.
3. Confirm clear KPIs & quantifiable outcomes. Sometimes a client pauses if they cannot quantify the expected impact on their sales, market share, or profit. By communicating clearer outcomes tied to your client KPIs you become a better partner focused on their business challenges and how to overcome them instead of only on the agency contract at hand. A range of quantifiable results is often better than a single measure. Shifting the conversation to outcomes is often a key step in avoiding an outright budget reduction and instead, perhaps, a reallocation of services and/or a revised investment with your agency. 
4. Consider restructuring the budget and/or services. Another tactic to consider is to simply rework your current scope. Are there “need to haves” vs. “nice to haves”? Are there services you can cut that they no longer need? Or can you find cost savings by reducing timelines, ad spends, or hard costs? The trick is to partner with your client and give them a program that is both cost-efficient and effective without it being too much of a strain on your agency operations.
5. Try alternative forms of payment. In many cases, a client pauses due to a lack of budget, so depending on the situation and your level of trust, consider rearranging your agency compensation structure.  There are creative and potentially lucrative ways to still get paid.  Depending on your financial position, try deferring payment until a later date (with or without interest). We recommend this if you are confident the client will actually pay you.  Another option is to completely redo the compensation structure and shift it to some form of equity (or phantom equity) or a success-based fee – which works best if the client/company is looking to exit in the near future. Alternative payment structures are certainly riskier, but if done right, can produce great outcomes.  We’ve personally negotiated these types of deals in the past as former agency owners, and with varying results. Sometimes it worked out great, and sometimes not so much. It entirely depends on your situation but getting creative about payment methods could be a way to prevent a service pause.
6. Suggest an interim solution. There are things you can do for your client during the pause that can help you, and them, weather the storm.  Consider offering consulting services, ongoing monitoring or reporting, “keep the lights on” packages, or other stripped-down contracts that can keep your agency in the mix and provide value while your client determines their next steps. We find that clients will usually be receptive to these workarounds because they know that completely stopping all services can cause major issues for their brand and could set them back in the long run. This will also keep you engaged and set up for success when things ramp back up.
7. Set a time frame for the pause. Of course, you want to be flexible, helpful, and understanding, but at some point, decisions have to be made for the future of your business. You can’t be in limbo forever. Our suggestion is to establish a timeline for the pause with your client. Determine that timeline in collaboration with your client based on your ability to maintain your operations, pay for staff, keep any tools or subscriptions you use for that client live, etc., during this pause.  If your client does not provide you with an update before the date you’ve decided, it may be time to move on. The important part is for you to have that internal discipline…this is business after all. Whether that is making the hard decision to let go of team members or ramp up business development efforts to secure new clients – you have to move forward.
8. Reallocate staff & pause new hiring. During this time, it can be very difficult to know how to best utilize staff. The client could come back at any time, so the last thing you want to do is lay off your team, just to turn around and ask them to come back weeks later (if they will come back at all).  You are potentially sitting on all of this labor capacity and don’t know what to do with it. That’s where reallocation comes in. Identify where else your employees can provide value. Is it working on another client team? Is it making your operations more efficient? Is it focusing internally on your agency and treating yourself as your own client?  We always say that every problem is an opportunity.  There are always things in your business that could use some fine-tuning – ask your employees for help making improvements that may save you money and headaches in the future. And this should go without saying, but you may want to hit pause yourself on any new hiring because you may be in a position to reallocate your current stuff.  It’s best not to bring on anyone new that you may not be able to keep. 
9. Optimize your operations.  Now is as good a time as any to streamline your operations and get more efficient. In addition to asking employees who would normally be dedicated to a client, to help in this department, you should also take a closer look at what could be improved. Identify processes that need enhancement, tools or resources that need to be upgraded or replaced or systems that need updating. You must have visibility into your core operations to improve the quality of work, better track employee performance, ensure accurate information is delivered, and allow you to work smarter. By spending some time here, you can easily identify cost savings to keep your business running smoothly during a client pause or find new more efficient ways to help your clients using less time and resources. It’s always a good idea to audit your internal operations regularly, but no better time than when you get the cold hard reminder that a service-based business is entirely reliant on how efficient you can be. 

It can be incredibly stressful and frustrating when your client unexpectedly pauses or terminates services. But unfortunately, it’s the reality of agency life. The key is not to panic. Instead, accept the situation, face it head-on, and take immediate action. With the right mindset and a solid plan of attack, you can, and will, come out on the other side better than before. 

Have questions for our advisors or want to know more? Contact us at info@futureproofgrp.com