The Problem With Chasing Trophy Clients
In the last 10 years, McDonald’s has been aggressively chasing Starbucks’ audience. The fast food giant has built separate departments (McCafe) exclusively for coffee in stores nationwide, hoping to lure young, hip professionals used to paying $5 for lattes.
In other words ... trophy customers.
But it hasn't worked well so far. Earlier this year, McDonald's stock hit an all-time low; the CEO resigned; and the McCafe brand has yet to put a dent in Starbucks’ dominance of the retail coffee market.
From a distance, it seems obvious that a burger chain would have to drastically overspend to capture even a sliver of the premium coffee market. Why wouldn’t McDonald’s have the good sense to stick with burgers?
And yet, many otherwise smart marketers make the same mistake. Like McDonald's, they pour a lot of money into landing trophy clients, only to end up back where they started — or worse!
For example, one of my clients — an app design firm — recently closed a contract with a famous luxury handbag company after months of heavy pursuit. It didn’t take long, however, for the firm to realize that the “win” was a Pyrrhic victory for three reasons:
- The project has nothing to do with apps. It’s all back end work, worlds apart from the firm’s core service. It’s going to look funny — like an outlier — in their portfolio.
- The app design firm had to scramble to get up to speed on engineering protocols. This is because they never do projects like this. It just doesn’t fit their skill set.
- They sacrificed lots of billable time — including a tedious RFP — courting this client. The ROI was low. In contrast, the firm usually closes most of their “normal” clients efficiently and predictably.
Service companies with fixed costs and large overheads are always susceptible to the lure of trophy clients. Ironically, the largest advertising agencies — the ones with nothing BUT trophy clients — are finding it harder and harder to satisfy them. Trophies want more for less, and they’re used to getting their way.
Marketers idealize trophy clients because we think working with one will beget another and another until poof! … our whole business has been upgraded. Problem is, it usually doesn't work out that way.
McDonald’s, for its part, isn’t giving up on trophies. Like Starbucks, the burger chain is now selling bagged coffee in supermarkets, as well as selling breakfast pastries to go with the coffee. Unlike Starbucks, McDonald’s is selling breakfast items all day.
Don’t ask. Some people never learn.
The app design firm, however, learned. They realize pursuing the handbag company was wrong; it tied up resources that could’ve gone to better use. They know they could have served other clients with less effort, and the best additions to their portfolio are the projects that demonstrate app design excellence.
Going forward, the firm will only bid on projects suited to their core services. In keeping with that, they’re expanding their marketing funnel to reach more prospects looking for an app design agency.
As marketers, we should recognize the lure of trophy clients (bragging rights, reputation upgrade, credibility). But often, trophies are fool’s gold — vanity. It takes discipline to stick with what you do best. Unless a trophy client meets your ideal client persona, save yourself the headaches and let someone else chase them.
Instead, become so good. .. so revered … for what you do that trophy clients chase you.