How well do you manage the client management process?It's a question I often ask clients I work with. While most firms pay attention to various aspects of the process, many firms fail to understand that it is an interrelated process, and hence fail to properly manage the entire process. I strongly believe that the ultimate success of your firm is determined by how well you manage the client management process.
Let me explain why I can make such a statement. There are four related areas in the client management process:
* Identify target clients.
* Acquire target clients.
* Retain target clients.
* Grow target clients.
Now, you may be thinking that this isn't earth-shattering. And you're right. The process is simple - identify, acquire, retain and grow the target clients. So why do firms struggle with this process?
Identify target clients
In our Client at the Core: Marketing and Managing Today's Professional Services, Bruce Marcus and I write, "Despite the traditional view of the independent and exalted professional, it's the client, not the professional, who's at the core of every practice. The success and growth of any practice, then, is a function of understanding the client base, the potential client base, and the firm's access to that base."
The ultimate and perhaps most difficult question that each practice needs to answer is, "How do I define the right clients?" Without answering this one question, a firm's marketing efforts will never be successful, and its client management process is doomed to fail.
Just because a client pays your fees does not make that client a target client. Bringing in the wrong client for your firm weakens its foundation. Do you know of any business that has succeeded in serving the wrong clients?
There are several ways of determining the right client for your firm. If you have a small practice or are just starting up a practice or practice niche, here is a short list of questions that can help you determine your target clients:
1. What types of businesses do you enjoy working with -start-ups, mature companies, depressed companies?
2. What industries do you have a real interest in? You may be an avid golfer and find working with country clubs very satisfying.
3. What are the needs of this market, and do you have the skills to satisfy them?
4. Is the local target market large enough to support your firm, or will you have to expand geographically? Do you want to spend time on the road away from home and family?
5. Do competitors already dominate this market?
6. Are there unmet needs of the market that you can satisfy?
7. Is this market growing, stagnant or declining?
8. What part of an industry do you want to target? While real estate is a niche, there are several sub-niches that can be considered.
Target marketing is a process of defining a set of client characteristics that describes an attractive client segment. For a firm that has identified individuals who are in need of retirement and estate planning, the target segment could look like this:
* High-net-worth individuals/couples ($2 million and up).
* Age (55 and up).
* Life stage (empty nester).
* Geographic markets (Naples, Fla.; Chicago's Gold Coast; etc.).
It is only when you get to this level of specificity that you can move to the next stage in the process.
Acquire target clients
If you don't know who your target clients are, how can you acquire them? This step of the process is all about communicating your value proposition to the target audience (marketing) and bringing in new clients (selling). Target clients will respond to your firm provided that the value proposition is either the most, or one of the most, desirable in the market place.
Larger firms have marketing directors who can help in this process, while smaller firms can outsource their marketing efforts to firms that specialized in this area.
While acquiring target clients is an article of itself, let me say that you need to develop a nurture-marketing approach. Once you have identified your target market, you need to systematically convert them into current clients. This takes patience and a willingness to invest for the long haul.
Retain target clients
Everyone knows that client retention is all about excellent service and responsiveness. But in order to provide clients with such service and responsiveness and reduce client defections, professionals must continue to develop new skills and competencies - both technical and non-technical.
Grow the target client
Growing the target clients requires more than just cross-servicing them. Firms must learn how to better manage the relationships of their key clients. A key client is one that generates the most profit for the firm in terms of percentage and absolute dollars.
Studies have constantly shown that clients that use multiple services from a company are less likely to leave. Every year key clients should undergo a spotlight review to determine what needs are not being met.
You will know that you have grown your client when you become the trusted advisor. They will call for your advice before making decisions.
How strong is your client management process?
August Aquila, Ph.D, is a consultant to the accounting profession specializing in practice management and M&A issues. He is a partner at The Growth Partnership. Reach him at email@example.com.
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