Published in PM Magazine 1st February 2005
Gary Williams, of The PACE Partnership, discusses ways in which firms can concentrate on their existing clients.
Marketers, business developers and fee-earners alike are under tremendous pressure to increase their firm's income, whilst ensuring that income is profitable. All too often professional services firms devote huge energies to wooing prospective clients whilst missing new business opportunities within their existing client base. So let's concentrate on professional services firms' existing clients and look at ways in which they can be protected from defecting to the competition and how new business can be won from them.
DO WE KNOW WHO TO PROTECT?
It goes without question that all clients should receive an excellent service. However, there are also those clients in a firm's portfolio where more proactive relationship building will pay dividends in terms of related business. Unless resources are unlimited, professional services cannot offer this same level of focus to every client. Any attempt to do so will result in a general mediocrity of focus and service. This means deciding who are the key clients that must be protected at all costs, as the loss of their business would have a severe detrimental effect on the practice - either in monetary terms, loss of kudos, loss of referral business or any number of other reasons.
Marketers and business developers can often play an important role in this, by working with fee-earners to analyse the importance and long-term value of particular clients. In doing so, they can take a snapshot of how strong that relationship with each client is currently. The aim here is to identify both:
• the positive sides of the relationship that need to be maintained,
• the weak spots which need addressing.
HOW STRONG IS THE RELATIONSHIP?
A useful tool for testing the strength of the relationship is PACE's Relationship Protection Index (RPI), which can be built in four simple steps.
Step one
Here the marketer, business developer or fee-earner selects the factors that they believe are indicative of the quality of the relationships their firm seeks to have with key clients. For example:
• the number of relationships with the client's board members,
• the number of the firm's people involved in client management,
• the number of the firm's services utilised by the client,
• the regularity of service review meetings,
• client referrals of new business,
• recognition by the client of 'added value' provided by the firm.
A scoring system is then created against each of these factors.
Step two
Taking each key client in turn, the marketer, business developer or fee-earner measure them against these benchmarks, awarding 'scores' as appropriate.
Step three
On the assumption there is a shortfall between the score that a key client has achieved and the maximum it is possible to achieve, an objective for a higher score to be achieved by some point in the future (typically three to six months) is set.
Step four
This information is now fed into a plan of action that will see the client RPI score increased to the desired level.
REALLY GETTING TO KNOW THE CLIENT
Having analysed the factors that are indicative of the strength of a key client relationship, we now need to call into play a key protection strategy - really getting to know the client. This will make us consider the contacts that we have in the organisation and the issues that these people face.
Through our work with professional firms, we often find that client relationships are built around the personalities of two key people - one from the client and one from the professional services firm. If one of those people leaves their current employer, the relationship is at risk. Because of this, more successful firms tend to map out who they know and who is important in the client organisation in terms of influence and decision-making. In doing so, they consider those individuals' views of their firm - are they supporters of their work or are they negative towards them? Their ultimate goal here is to get to know as many people as possible in the client and in turn ensure as many as possible are allies.
Part of this involves finding out what these individuals really want, what are their expectations and what key issues they are facing. The more knowledge we can gather, the more value we can potentially add to the client and the harder we make it for a competitor to replicate. This means talking to key contacts in the client organisation to understand not just what they want from us, but also what the key issues are that affect them and their part of the business.
BEING IN CONTROL - HAVING A PLAN
Having identified our key clients and who we need to get closer to. We now need a plan to ensure our work to date doesn't just remain an interesting piece of analysis - it actively works towards nurturing that client and winning business from them. Our plan will enable us to strengthen the relationship, counter any competitor threat and exploit any opportunity. Above all it will ensure that the client truly values the relationship they have with our firm.
A good plan typically contains a small number (say three or four) of quantifiable objectives that we seek to achieve over the next six to twelve months. Underpinning these objectives are specific actions (usually identified in the analysis process) which will lead to their achievement. All actions are allocated to individuals who have agreed to be responsible for their execution. In some firms we have seen marketers and business developers work with fee-earners to formulate these plans. They have also had a significant part to play in monitoring the plan, as from time to time its progress needs to be measured and corrective action taken. The best plans really do evolve and are updated as the relationship develops.
CLIENT REVIEW MEETINGS
Client review meetings present another great opportunity to strengthen our relationship with the client. These meetings should not be seen as simply an occasion to discuss progress on a piece of work. They can be much, much more. They can:
• test what the client likes or dislikes in relation to the way that we manage their relationship,
• establish more information about issues and people in the client organisation,
• identify opportunities outside the expertise we are currently providing and, if appropriate, allow us to cross-sell the services of other parts of the firm,
• keep us in touch with the client even when there isn't a specific piece of work being undertaken.
These meetings are vital to maximising the possibilities lying latent within the client.
MORE BUSINESS OPPORTUNITIES
Having a more strategic approach to managing key client relationships can have a very positive effect on a firm's sales strategy. By getting to fully understand the client, plotting the strength of the relationship (and addressing any weak spots) a firm can build a valuable position of trust which in turn can lead to greater business opportunities. Those firms that are successful tend not to view their existing client base as a source to 'flog more services' to. Instead they put time and effort into understanding their clients' situations and requirements and then develop products and services, which correspond to those needs.
How do they do this in practice? Many use the protection strategies we've outlined. Some use additional tactics, such as:
• Training all client-facing staff so they have a deep understanding of the key clients' industries, their businesses and the issues which they face. Given this knowledge, the professionals were better equipped to recognise the glimmer of an opportunity, which could then help clients further. This is because they understand the context and importance of the opportunity.
• When seeking new products to sell to clients, expertise that had already been developed as a result of demands arising from other key clients' work was looked at first. Here the firm sought to multiply the success of a proven solution rather than searching for a ground-breaking or brilliant solution that solved a problem no one has yet recognised.
• Before seeking to discuss new areas of work with the client, a firm's credibility and credentials in this field was positioned first.
• Training all client-facing staff in the skills of questioning and listening. This helped the firm concerned sort the real opportunities from the 'phantoms' by explicitly asking the client about the impact and significance of the opportunity identified.
SUMMARY
It is generally agreed that relationships are vital to success when looking to generate fee-income and yet all too often there is a tendency to focus on the pursuit of new clients. Whilst this is important, there are often tremendous opportunities closer to home in a firm's existing client base where the groundwork has already been done. These opportunities just need further analysis and a more proactive, planned and team-focused approach in order to come to fruition.
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© 2008 The PACE Partners LLP London England
