MY FAVOURITE MISTAKE: “We Were in €250k Debt from One Client”

• An anonymous agency owner won a project with a global business with a multi-billion-euro turnover.
• But gaps in their own processes, the client’s personnel changes and not immediately chasing payments caused them to plunge into six-figure debt.
• Come along and hear more about their favourite mistake and what it has taught them about being an agency leader – and about themselves.

Everyone makes mistakes – but some can cost you much more than others.

For one anonymous leader, their agency was plunged into €250k worth of debt, which took 19 months to be paid back.

“We were approached by a large contract manufacturer to work with them on various projects. Everything was going fine at first, and we had a really good relationship with the team. And we’re used to, especially at first, clients paying us after, so it wasn’t a massive concern,” they explain.

However, despite the relaxed approach, the mood quickly changed. 

While the agency was on a six-figure retainer, the client also saw a succession of personnel changes which held up invoicing on the project.

“New people came in and the project changed,” they say. “We were in a state of flux really, in terms of not knowing where things were heading, and then on top of that it transpired that the proper procurement policy hadn’t been followed.”

Things turned sour. The client started to question whether the agency’s invoices were even valid, and due to so many staff changes, no one wanted the responsibility for the €250k budget debt.

“It went on for 19 months before we actually got paid a penny by them,” they say. “But the larger problem was we had paid out €90k to vendors for planned ad campaigns.”

“As you can probably imagine, they weren’t particularly happy about this, and then they started threatening that we couldn’t run other client campaigns, which would have been hugely problematic.”

The agency leader had to go ‘cap in hand’ to these vendors and be honest: they hadn’t been paid and couldn’t bankroll the debt from their own pockets. 

They also had to get tough with the client themselves.

“I had to get really, really forceful with the client and almost threatened to air my dirty laundry in public, to make it known to the industry that they were being really unfair,” they explain. 

“It was a horrible experience. I had many sleepless nights where I wondered if it would mean the end of the agency.”

From mistakes come lessons learned, which in this instance were:

• Being hotter on the legal stuff. “I think it was maybe a degree of imposter syndrome as new agency owners and maybe just because we’d never experienced issues, so we had a few gaps in our own processes. This has led us to make sure our contracts and scope of work documents are much tighter.”
• Not being so nice in business. “You can’t always be nice in business when it comes to money you’re owed. I’ve become a lot better at that with all of our clients. Now, if any of them get into arrears, we don’t leave it as long.”
• Standing your ground. “The ironic thing is the same client approached us recently about working with us again, and I was pretty reluctant to say the least. Another client of ours, three of their most senior marketing people have gone to said business and wanted to work with us again, but we politely declined.”

Scenarios like these are definitely not uncommon and this session will help other agencies going through the same thing.

Come along and hear more about this agency leader’s favourite mistake and what it has taught them about business – and themselves too.