How to Keep Clients Forever

How to Keep Clients Forever
Introduction
Keeping and growing clients forever - A.K.A.
client relationship management, or key account
management - is an essential but much
misunderstood part of growing a firm.
It should in theory be easier than winning new
business from scratch, but many people
approach it with erroneous ideas; assuming, for
example, that work will flow in just by doing a
great job or providing a terrific service.
I learned the hard way - took over the running of
a firm where at one point for every £5 million in
new business we won, we lost £750K from
existing
clients
leaving or
projects
completing.
Not quite
Sisyphean,
but pretty
close.
Keeping and growing clients forever is hard but
not difficult. It takes some simple planning tools,
and a whole lot of effort to put them to use, plus
a number of internal disciplines have to be in
place. And in many firms it is the internal
disciplines that are the hardest to get right.
And from their point of view, they already trust
you and have built up some degree of rapport so why would they not want to give you more
business.
That’s the first thing to check, of course. Unless
they really are delighted with your work and the
health of the relationship (and they are happy
with you personally, as well as the rest of the
team), they will not give you any more work.
And so you need to be confident this is right,
right from the start.
Sometimes you “just know” the strength of the
relationship, but often it is better to undertake
research amongst clients (this is old hat in many
professions, but an alien and frightening
concept in some). Some partners are highly
resistant to proper, independent research which in my experience is something of a
warning sign for the real strength of their client
relationships.
4 myths about service
The role of service in keeping and growing
clients is crucial but often misconstrued. In
particular, there are four myths that need to be
quashed:
1.
This short paper looks at:
•
Why client relationship management
should be easy;
•
4 myths about service;
•
A six part process for doing it properly;
•
What gets in the way of success.
Why it should be easy
Anyone trying to build their business should
start with their existing clients rather than chase
new-new business.
You know the clients well, so you should
understand what their objectives and issues are;
you know how they like to work; you know the
personalities there, so you are able to negotiate
the office landscape better than an outsider.
2.
Firstly, doing a good job is not the same
thing as providing a good service. You
may have undertaken, say, a due
diligence investigation perfectly
competently, on time and within budget.
But that is the minimum the client
expects from you – doing a good job is
a “hygiene” function and is not the same
thing as excellent service (and if you
work for HMG on major contracts, you
should know that part of your fee will be
tied to providing super-service i.e. if you
“just” do exactly what has been agreed,
you will not get all of your fee, as you
have to be seen to be delivering over
and above…).
The second trap is that many firms offer
free add-on’s: knowledge transfer,
seminars, staff training, etc as a
demonstration of tangible value for
money, and they assume this is also
regarded by the client as an element of
good service. But if these freebies are
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3.
4.
offered by your competitors; if they are
confused with the things the client is
really looking for in service terms (joined
up thinking across practices; joined up
thinking across geographies; continuity
of personnel; accessibility;
communication; etc) then their
contribution to the service element of
your offer will be marginal.
Thirdly, it is often assumed that doing a
good job and giving great service will
protect your client base. Unfortunately
you need to do more than that, because
if your client network is too narrow and
your contact moves on, their
replacement may well be inclined to use
their favourite firm and you could be out
in the cold (the silver lining, that you may
be hired by your contact wherever they
end up, is scant consolation for losing
the original client).
And finally, doing a good job and
providing good, even great service, does
not of itself automatically lead to more
work; there’s more that you have to do
to keep the income flowing in.
The six part process
Keeping and growing clients is a six part
process:
1. You firstly have to work out which clients
you should spend time with, and then:
2. Work out who to go after within each client;
3. Get close to them;
4. Find out (ideally anticipate) their needs;
5. Delivery;
6. Repeat.
Work out which clients to go after
Select clients using “Maximise Gain” or
“Minimise Loss” criteria. For example:
Maximise Gain
• Clients that are growing fast
• “Flagship” clients (“prestigious” clients where
you make little actual money)
• Big clients where your share of wallet is small
• Big clients in economic difficulty
• Clients where there is a very strong
relationship
Minimise loss
• Important clients (irrespective of size) where
you face a real competitive threat
• Big clients where the relationship is too narrow
(whether by contact, geography or service
line)
• Big clients where the share of work is static or
shrinking
• Big clients likely to consolidate their
professional service providers
Work out who to go after within each client
This is called client mapping and requires you to
identify the individuals within the client (and
other stakeholders who have influence over the
allocation of further work, such as nonexecutives, other advisers, etc), then assign
each a “role” which identifies their influence over
the allocation of work to your firm (the “decisionmaker” is the best known role, but there are
others such as those with power of veto, etc),
and noting the extent to which (a) they know
your firm and (b) how highly they rate it.
This can be done in your head, or on the back
of an envelope, or using specialist software.
The chart on the next page illustrates the
process.
If you have an extensive client base, then
portfolio theory provides a way of determining
how much resources to apply to which clients.
If you have a more manageable client base,
then a set of pragmatic principles will do
perfectly well instead.
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The next two parts of the process form the core
of providing great service. And as professional
services are, from the client’s point of view,
largely an experiential business, service is
incredibly important.
A simple chart might look like this:
CLIENT X
Service can be expressed by the formula:
NAME
TITLE
ROLE
KNOW
US
RATE
US
J Anon
Trustee
Veto
N
?
J Smith
CEO
Decision
-maker
Y
Y
This is perhaps best known by the mantra:
“under promise and over deliver”.
J Doe
CFO
Veto
N
?
Get - and stay - close to them
AN
Other 1
Division
head
Coach
Y
Y
AN
Other 2
Team
leader
Contact
Y
N
AN
Other 3
Ops
lead
Contact
Y
N
A more complex chart might highlight links and
relationships between the individuals and in
smaller clients this could be something you
already know, intuitively.
With larger clients you need to ask questions of
people (“...so who else might have a stake in
this decision…”) in order to reveal the
individuals, their roles and, if relevant, the
relationships between them.
The chart gives suggestions as to where you
should be spending your time working your way
into the client. Of the 6 individuals here, there
appear to be two gaps in our internal network
and two individuals who may not - for whatever
reason - rate us highly.
Since the former have the potential to disrupt
our being given further work, it makes sense to
prioritise them; since the latter do not - as far as
we can work out - have the power to influence
our appointment, we can defer reaching out to
them until after we have the more important
players sorted out.
The key thing is to get on and do it. And if you
have a substantial client where your contact
base is relatively narrow, then you should think
about getting on with it sooner rather than later.
Service = Experience minus Expectation
This is essential. You have to get to really close
to understand your client, in order to detect
what their expectations are of your firm and of
the work you are doing for them (so you
understand how you can exceed their
expectations - or manage them downwards...).
You need to understand their personal goals,
likes and dislikes, so you can become a
pleasure to work with.
And if you have a strong relationship with them,
they can help you in the mapping process.
This is all perfectly straightforward and can be
summed up by the old adage “be interested in
your client”.
It is a matter of establishing a high degree of
trust and rapport and anyone who is really
proficient at networking should find this pretty
easy, albeit time consuming.
Find out (ideally anticipate) their needs
Again, for individuals who are good at
networking or have an innate understanding of
what clients are seeking, this should be
straightforward.
Client needs include what some refer to as the
soft stuff (in the auto and hotel industries, these
are referred to as ‘moments of delight’) - small
things - remembering birthdays; sending over
press cuttings; making a phone call when
others would send a formulaic email;
responding fast to requests; etc - which
demonstrate that you are really interested in the
client (and are well organised, too).
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In an experiential business, this stuff really
counts, so pay attention to it!
But do not do the soft stuff at the expense of
what the client regards as being the core of
great service, which is usually a combination of
out-performing on existing work and helping
them achieve their business objectives, by
coming up with a stream of suggestions for
them to consider.
Some of the obvious things you can do to
generate the latter are:
• Pointing out issues faced by other clients
which operate in the same sector or
geography (theoretically, colleagues elsewhere
in your firm should be able to help you with
this);
• 1:1 market research and follow-up group
discussions may reveal requirements you were
unaware of;
• Brainstorming sessions with the client and a
team of your colleagues can produce possible
answers to what the client may have thought
of as intractable problems;
• Brainstorming sessions about the client, with
colleagues elsewhere in your firm;
• Presentations by the client to your staff about
the client’s business and sector can deepen
your understanding of the client's business
and spark ideas as a result;
• Senior partner “health check” discussions with
the client can reveal shortcomings that
politeness had previously obscured;
• “Walking with the corridors” and asking
around can alert you to issues and challenges
you may be able to help with;
• Participating in client events can give you
“insider” status that may make you privy to
challenges you were not previously aware of.
There’s a lot that can be done to get close, stay
close and generate ideas they may find
valuable.
Delivery
This starts with working out what, amongst the
myriad of things you could deliver, you should
actually put to the client (how and when to ask
for the business is covered in a separate paper).
You can use tools such as Force Field Analysis,
which ranks opportunities and obstacles, to
help you determine the highest priority
opportunities and what you need to do to get
past the inevitable roadblocks along the way.
And then you have to actually deliver. The key
point to grasp here is that as far as your client is
concerned, you are the guarantor of delivery,
even if it is another part of your organisation
actually doing the work.
If “guarantor” is not a role you are comfortable
with, and you simply want to be the sort of
professional who just does the technical stuff
and that’s the end of it, then you need to give
way to an account manager and let them run
what you may have thought of as “your” client.
To the uninitiated this may be painful, but
account management is an essential role and if
you do not do it...
Repeat
Client relationship management is for life, not
just something you do every now and again
when you remember to.
Keep going through the cycle and you will find
that your client’s perceptions of service climb
and your revenues grow.
Margins should increase as well, as you
become more slick at providing just the services
the client values most.
And if you go through this cycle time and again,
you will find that you build in protection against
client contact departures, against the arrival of
new personalities, against the ups and downs of
fortune that all clients face along the way.
My old firm’s record for retaining and growing a
clients is 23 years and counting - with 5
changes of CEO along the way.
There’s no reason why your firm cannot emulate
or beat this. Except for what often gets in the
way...
What gets in the way
Misunderstandings about the process aside,
there are a number of significant challenges to
be overcome if your firm is to undertake really
effective client relationship management:
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• Sometimes, delivery – if undertaken by
colleagues elsewhere in the organisation – is a
major issue. The straight truth is that many
partners feel it is rational behaviour not to ask
colleagues to undertake work for their client,
since they feel they have nothing to gain and
everything to lose by referrals. This is because
in some organisations, partners simply do not
trust each other sufficiently and in others –
particularly the larger ones – they do not know
each other.
• Some firms effectively operate a form of “eat
what you kill” process, despite whatever they
may claim in public. I have always found the
attractiveness of this system overrated. It is
presented as pure Darwinism, overlooking the
fact that nature’s top predators tend to hunt in
packs.
• In some organisations, billings targets work
against spending time on marketing, or client
relationship management initiatives or helping
others cross sell additional services that
clients would find valuable.
• The firm’s systems may not readily enable an
overview of work being done by various
teams, or easily provide an overview of
consolidated billings and profitability, making it
hard to work out whether too much or not
enough work is being done for any given
client.
• Client service reviews may become Star
Chambers that discourage participation in
service initiatives.
• The organisation’s remuneration systems may
not cope well with those who generate
income as opposed to those who execute the
work (or they may have what is in effect an
internal market, where deals are negotiated on
a case by case basis by the individuals
involved. Very collegiate, that).
• Some organisations do not operate an
account management system and find that
one set of partners resent being giving
“orders” by other partners, as they
misunderstand the role they are trying to play.
• And in many firms there is a poor
understanding of basic professional services
marketing, sales and relationship skills.
• In some organisations there is complacency
or inertia which have to be overcome.
• And in many firms, the essential truth that
professional services is in large part an
experiential product is missed, with the result
that the culture which can deliver great service
is absent.
These are all serious issues which have to be
dealt with (and are the subject of a different
paper).
But there is nothing inherently complicated or
difficult in client relationship management, and
as professional firms increasingly come to
resemble one another, this area holds the
promise of real, powerful differentiation.
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We work with ambitious
organisations to help them grow,
faster.
We are exceptionally good at
making your organisation and
your people more successful in
planning, attracting, winning,
keeping and growing clients.
Chris Matthews
[email protected]
0203 286 9216
www.sutherlandspsbd.co.uk
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