Client Relationships: Shifting From Troubled to Trusted

Sometimes the best client relationships are those that have undergone the refinement of fire.  While there are no shortcuts to developing deep ties, here are 3 best practices to help you redirect a relationship that’s barreling down the wrong track.

1.  Ask questions and listen really well.  Get to know the client company’s objectives and challenges from their perspective.  Make sure you understand well enough to be able to articulate the client’s market position and objectives to your colleagues on the servicing team.

2.  Once you understand the client’s objectives and challenges, paint a very clear picture of how you can assist.  Be honest.  Don’t shy away from the weak areas of your solution.  Point them out and state how you will bolster those areas.

3.  Integrate and stay connected.  Form a cross-functional team within your firm with the goal of developing relationships with their corresponding functional heads on the client’s team: HR to HR, accounting to accounting, etc.

Customer Centric versus Customer Driven

Which business model sounds better: customer centric or customer driven?  They sound similar but one can lead to greatness; the other, failure.

Customer centric organizations are externally focused.  They know what their clients need, they understand their clients’ challenges, and they seek to provide value.  Customer centric organizations are keenly aware of their key differentiators because they think in terms of client value first.

Customer driven organizations are typically those in which a small number of clients represent a disproportionately large percentage of overall revenue.  When the client makes demands, the serving organization mobilizes – often without first thinking it through.  When large clients are unhappy, the customer driven company sounds the alarm and creates activity.

If you’re still scratching your head on this one, consider this.  In the customer centric organization there are no knee-jerk responses to market challenges and client demands.  They are taken very seriously, weighed carefully, discussed…  But they are not allowed to disrupt the business as a whole.  There are no emergency executive meetings, no pulling out of hair, no recriminations.  The customer centric business takes on a stance of open curiosity.  Can we improve delivery?  What would that look like?  Are there increased costs?  How does this align with our vision or long-term business plan?  Once a solution is found, the customer centric business executes swiftly.

Which one would you prefer?  Are there other considerations or other business models to recommend?

Prospecting for Business: The Change Management Connection

Asking a prospect to consider your company over their current supplier is tantamount to asking them to take on a change management initiative.  Failing to recognize this keeps many otherwise skilled sales people from achieving their objectives.

People are naturally resistant to change.  That’s why all good change management programs start by describing a burning platform.  Some sales people will call this identifying pain.  A nicer way to put it is: What problem will my product or service solve.

If you’re not offering a solution then you will be forced to attract new clients based on price – something no consultative sales person should be willing to do.

Planning For Growth – Part 2

In part one, we established a strong foundation for our business plan by recording core organizational beliefs, baseline metrics, and annual goals.  Now we move on to the market and client base.

Take some time to describe the elements of an ideal client for your product or service.  Are you best suited to a certain industry?  Do you fare better with start ups, or is your offering more suited to mature enterprises?  What type of relationship works best?  Method of communication, annual spend, location, and access to decision makers are some other considerations.

Once you have the ideal account mapped out, conduct a thorough review of your actual client base.  Look for opportunities to maximize relationships.  Check the profit margins against deliverables required by any contracted terms of service.  If you typically measure accounts by sales dollars only, try looking at them from a profit perspective instead.  Are extra services eating away at the margin?  Could you renegotiate some of the deliverables to move them toward a fee structure?  Consider existing relationships before making large-scale changes that could jeopardize your future with the client.  Even if you only get to adjust a few accounts, you and your team will be better versed in true client contribution – a skill that should pay you dividends today and into the future.

Now review target and prospect lists using your knowledge of the ideal customer.  Can you leverage commonality within industry verticals to maximize marketing plans?  Perhaps choosing a quarterly theme for the entire team will move your business ahead faster.  Verne Harnish presents some interesting ideas on using themes in his book: Mastering the Rockefeller Habits.

Part three is all about execution.  If you don’t want to miss the next installment, feel free to use the RSS button at the top right of this page.  Or subscribe by email by clicking on the subscribe button on this page.

Planning For Growth

A strong business plan delivers growth by creating organizational alignment.  This series presents the steps required to create an executable 3-year growth plan.

To be truly powerful, the plan should be constructed by those who will be held responsible for delivery.  Some elements are flexible, meaning the owner keeps it alive by ensuring quarterly objectives remain relevant and compelling.  Other elements, such as those relating to the firm’s vision, values and culture, remain static.

The planning process takes place in three parts: Foundation, Market Expertise, and Execution.  It’s creation is an excellent teaching tool for people of all levels as it challenges one’s market knowledge and provides a running scorecard to compare actual results against targets.

In the first section, Foundation, we record core beliefs, establish baseline metrics and set goals.  They are:

• Vision, values and culture - Who we are and how we make decisions.
• Field of play - Geographic scope, primary industry verticals, and product/service focus.
• KPIs – Key Performance Indicators – The top 3 to 5 measurements that will tell us how we’re doing against plan.
• Profit goals – Pricing strategy, margins or market price points.
• Gap - Current run rate or performance compared to the company’s 12-, 24-, and 36-month goals
• BHAG - Big Hairy Audacious Goal.  A stretch goal that would take 5-10 years to accomplish.

The next section, Market Expertise, covers understanding who your ideal customer is and using this information in your marketing plan.