Are you considering how to sell to enterprise clients, as a way to grow your marketing agency? Be careful: working with enterprise clients can be lucrative… but it can also put you out of business, if they choose to squeeze you.
If your marketing agency has primarily worked with small to medium businesses (SMBs), you might be frustrated by your current small budgets and small markets. Enterprise can seem like a way to “escape” to bigger budgets and better clients. But enterprise isn’t a magical solution.
Let’s look at why enterprise is tough, what the work might be like, how to decide whether to even pursue enterprise clients, and how you can protect your agency.
What are “enterprise clients”?
There’s not a standard definition of “what is an enterprise client?” But for our purposes, consider: “Enterprise clients are large companies with big budgets, complicated internal politics, and at least some degree of centralized control.”
Unless you’re already working with large corporations at your agency, your experience with them will likely be bigger and slower. When things are good, you’ll love getting huge payments. If (and when) things eventually deteriorate, you’ll worry about covering payroll.
Beyond the “high highs” and “low lows,” it’s easier to label what’s not enterprise. Startup clients aren’t enterprise. And even a 400-person company might be more “mid-market” than enterprise.
As a shorthand: if there’s a purchasing department, it’s an enterprise client.
What’s different about doing marketing for enterprise clients
Enterprise clients aren’t just bigger-budget versions of your current clients. At the enterprise level, clients expect a more sophisticated experience (in terms of business results and in terms of the client experience):
- Both sophisticated and inexperienced contacts: The day-to-day client contacts tend to be either more experienced or brand new, as marketers. They expect more—and their bosses expect more—than you might see at an SMB client. Yet more than a few clients are more focused on their personal career achievements, rather than the good of the company (compared to, for instance, a co-founder or an early-stage employee at a smaller company). You’ll encounter some marketing “mercenaries,” who jump from one company to another—without loyalty to their employer, much less the employer’s current agency.
- Complicated politics: On top of that, the internal client relationships are a lot more complicated. Instead of 1-2 stakeholders, you suddenly have 10+ stakeholders… and it’s not always clear who’s really in charge. Your project or retainer is also likely one of many initiatives the decisionmaker is juggling, so you won’t get a lot of day-to-day attention from the senior stakeholder. Those 1:1 meetings tend to become higher-stakes.
- Cross-sell opportunities: You also have cross-sell opportunities (from one client department or division to another) … but for that to work, the AM needs “space” to build relationships and work your way into those other divisions. However, clients tend to be territorial—you’ll need a new budget (including a new Purchase Order or “PO”) before you help a new department. Your current client doesn’t want to feel like you’re letting another department “steal” from their budget.
- Narrow mandates: Your independent agency is likely doing a small slice of the enterprise client’s business. Instead of being the de facto “agency of record” (AOR) for a small business, you might be doing (for instance) channel marketing for their EMEA division, or SEO for their consumer banking division, or internal communications for their HR department.
- Payment pressure: In addition to more internal politics, there’s also pressure from big clients to take longer to pay (at the extreme, Keurig Dr. Pepper did an RFP saying they’d take 360 days to pay… and an agency was apparently foolish enough to agree to those terms). When there’s a procurement team or corporate purchasing department, their job is not to get you paid ASAP. You will need to adapt to their billing and payment schedules, which, may not match up with your normal processes.
As an agency leader noted: “One of our 350-employee clients is giving me more headaches than my 50-employee clients.”
What might enterprise client relationships look like for your agency? Read on.
Three examples of enterprise clients: Billion-dollar global corporations
I asked my colleague Diane Stadlen what she’d add, based on her 40+ years of marketing industry experience. At agencies, she worked with enterprise clients across technology, consumer products, life sciences, and manufacturing.
As Diane shared, enterprise level clients can be tricky:
- Centers of power: At some enterprise clients, there’s a strong headquarters organization. At others, marketing is primarily organized by region, and there’s no corporate Head of Marketing. It helps to know who’s in charge… but often “who” ends up being multiple people. If you have access to the HQ, you’ll usually have better intel on what’s going on.
- Turning a battleship (vs. a speedboat): Depending on the maturity of the company and how they’re organized, it’s really hard to turn the ship. You may find yourself working on priorities that are no longer relevant… or get fired because someone decides to change priorities from five layers away.
- Secret stakeholders: Does the company use channel distribution partners, franchisees, or other “separate but related” entitles? Those may or may not have power in the relationship. At minimum, they have opinions about the work you’re doing. But it’s not always clear and you need to listen carefully. You also need to develop relationships with all those outside contacts, if possible. If you have multiple AEs working on the client’s business, make sure they coordinate and compare notes regularly.
In my own enterprise agency experience, I’d add that big clients don’t always want to invest big budgets (as I saw with a large private university). And their internal structures don’t always make sense (like a pharmaceutical research company that handled digital marketing separately from their “regular” marketing department).
Diane shared three examples from her career. I’ve hidden the client names, to protect the innocent… and the guilty.
Example #1: Technology manufacturer (limited direct-to-consumer sales)
- They had a global VP of Marketing and then individual regional Heads of Marketing, plus sales and channel people. Products were not necessarily consistent across regions… and likewise on timelines. There were global campaigns that were adapted and executed locally, including large scale events and promotions, with multiple partners and very specific requirements.
- Budget allocation can be ‘Hunger Games’—in that it’s big competition without a lot of rules.
- As a sales-driven organization, the client’s sales leaders often had more “say” about marketing than the marketing leaders.
- There wasn’t always coordination—or even communication—among regions, business units (BUs), or local teams.
Example #2: Large technology manufacturer (direct-to-consumer, channel and enterprise sales)
- At this company, the agency was the team that had a holistic view into what all the assigned client teams were doing.
- If there was a product launch, we were coordinating between product teams, engineering, consumer teams, and B2B teams.
- There was no shared budget. Each had their own agendas, plans and channels. (This could be an advantage for the right agency.)
Example #3: $100 billion manufacturing company
- This was a highly mature company with very strong region leads… and lots of hierarchy.
- Planning was done over a year in advance. They were not very reactive; sometimes that was good and sometimes not so good.
- Dealers rule the world. Everything is to serve the dealers, as they control sales and the face of the company to the customer.
Those enterprise clients were all paying the agency a lot of money. The question becomes: is it worth it for your agency?
Should your marketing agency sell to enterprise clients?
If I haven’t scared you off already, here are questions to help you decide whether to pursue enterprise clients at your agency.
- Can you handle long sales cycles? Instead of closing deals in a few weeks or a few months, you might need 6-12 months to close an enterprise deal. Or you might work a deal for six months… and find they chose someone else.
- Do you have bandwidth to do RFPs? Larger firms tend to be fans of doing a Request for Proposal (RFP) when hiring an agency. This rarely works in your favor, unless you have an “unfair advantage” in the selection process.
- Have you upgraded your insurance coverage? Enterprise clients often require extra insurance coverage. At one agency, we needed to update our general liability coverage from $500,000 to $2 million. That didn’t quadruple the premium, but it wasn’t something our smaller clients cared about.
- Do you enjoy paperwork? A regional bank asked my agency complete two different security inventories before we could get into their procurement system. The surveys took hours to complete, including identifying how to approach irrelevant-to-us questions.
- Can you handle slow payment terms? Some enterprise clients like to pre-pay in advance. That’s helpful, if you set aside the money on an accrual basis. But if they’re paying on a monthly or quarterly basis, odds are their payment terms are longer than what you expect from other clients. If you have a strong client sponsor, they’ll sometimes arrange to have you invoice work “early,” so that the payment arrives on time.
- Are you ready for internal politics? Your client contacts won’t always act like they work for the same company. Everyone has their own agenda, and those agendas may conflict with each other.
- Do you have relevant experience? This varies by client, but enterprise clients likely won’t want to be your first big client. You may be able to leverage experience working on small assignments for other large firms, or for smaller firms in the new firm’s industry.
- Do your Account Managers understand enterprise? Enterprise clients aren’t just “large versions of small clients.” In the next section, I elaborate on what you need from AMs.
Want to proceed? Be sure your Account Managers are ready.
What your Account Managers need to succeed in enterprise
Consider what you need to know (and do) for the enterprise AM to succeed:
- Must know the specific structure of the company, and how all of the regions, BUs, and local groups interface and operate.
- Must know who makes the final decisions and maintain relationships there.
- Must be incredibly organized and flexible to be ready to support and defend the agency position, as there are more competitors telling their contacts they can do it better.
It’s not a junior role, as sales and biz dev are critical skills to maintaining the agency share of the business.
Or, to put it another way… assigning enterprise clients to competent Account Managers (with prior enterprise client experience) doesn’t guarantee success. But handing big accounts to unqualified people is a recipe for disaster. This includes junior Account Managers (who don’t have the skillset) and client-facing SMEs (who often see clients as an annoying interruption to their workflow).
What if you need to be the AM as the agency owner?
As an agency leader, you might the only [current] team member who can handle those relationships. If so, think twice about whether to proceed—you might regret becoming the client’s “forever” contact. For more on working with enterprise clients, see my classic interview with agency CEO Greg Boone.
Should you fight to keep an enterprise client that’s threatened to leave?
According to 2023 research from 4A’s and ANA shared in AdAge, agency reviews are expensive for everyone:
The average agency review costs a combined $1 million for marketers and agencies involved, according to a study by Advertiser Perceptions commissioned by the Association of National Advertisers and 4A’s.
That average is based on reviews with three agencies and no incumbent involved. Reviews with more agencies or with an incumbent likely cost more, according to the study. An incumbent agency spends on average $406,092 defending an account—which is likely why 25% of incumbents decline to participate in reviews.
They’re also something of a charade, since clients tend to keep incumbent agencies after the review:
“‘Given the cost implications for both clients and agencies, the work disruptions and delays caused by an agency review and the potential to damage the existing client/agency relationship, it is critical to assess whether the need is really there,’ said Matt Kasindorf, senior VP of business intelligence and insights for the 4A’s, in a statement.
He suggested a client/agency relationship management program or engaging a relationship consultant as alternatives ‘given that the majority of clients retain their current agency after a review.'”
Ultimately, that’s all par for the course when your small agency works with enterprise clients.
Deciding whether to work with enterprise clients
As you can see, it’s a mix of pros and cons. If you can weather the financial swings, enterprise clients can produce a lot of revenue at once. But they can also take that away—so you’ll want to keep selling, to reduce your Client Concentration risks.
Question: How does your marketing agency approach working with enterprise clients?