Firms need to focus even more on their key clients
“The first step is to establish that something is possible, then probability will occur.” The tech and business giant Elon Musk may not have been talking about leveraging large client relationships when he made this observation, but it resonates beautifully.
Not only is it possible and probable to boost firm revenue by focusing on the 20 percent of your clients that represent 80 percent of your revenue, it’s proven.
The first part of this article introduced the key-client strategy session, which I mastered as a member of the key-client business development team at IBM. In this approach, the relationship partner leads the client account team and relevant industry and service line leaders in facilitated brainstorming sessions.
In order to underscore its importance, I recommend naming the initiative — call it “Key Client Opportunity Planning,” or whatever you prefer.
To maximize their potential, these sessions must be part of an ongoing, institutionalized process, not one-off events. Firms committed to the strategy dedicate approximately one day a quarter to it, scheduling eight to 10 client reviews of about an hour each. This permits a firm to cover 30 to 40 key clients each year. The process can be scaled to accommodate your firm size.
In identifying target clients, reach first for those that may be at risk. Examples are organizations that have a single or new decision-maker, or those that are tethered to your firm by a relationship with just one partner. I also consider at risk those companies going through a major transition, such as a generational handoff of power in a family-run business.
Elements of success
In addition to commitment to an ongoing firm-wide process, account selection is critical. A firm that asked me to facilitate a day of key-client reviews lost one of its largest clients a month later.
It turned out that client wasn’t on our client review agenda, but obviously should have been. We discovered that the partner had hidden the at-risk status because he didn’t want his colleagues to know how dicey things had gotten.
But in fact, the client’s departure could probably have been prevented if it was known that the client was at risk and we had held a review that day.
There are two other elements I consider essential to a sustainable program. The first is identification of an executive sponsor for each key client. This is a partner who is not directly involved with the account, but who holds a leadership position in the firm. This individual personally calls on the key client in order to demonstrate that the weight of the firm is fully behind the relationship partner. This naturally expands the relationship strength between the client and the firm.
Depending on your goals, the executive sponsor could be any one of a number of people. Your managing partner could be utilized to elevate the encounter, positioning your firm at a higher level and opening the door to larger opportunities.
You could bring in your industry leader to reach out, peer to peer, to a counterpart at the client business. Your CFO or COO might meet with like-level individuals. Or your human resources manager could huddle with the client’s HR specialist to discuss issues like succession planning and working with Millennials.
It all comes back to cultivating the trusted advisor relationship — getting out of the traditional bean counter box and engaging on the business-issue level. Imagine how this could lead to additional consultative services.
Finally, I strongly encourage you to build a “special offers” element into your key-client program. These are opportunities available exclusively to key clients.
Examples are advantaged pricing, special events, or the opportunity to become an early adopter of a new service. A different type of special offer is a revenue threshold for entry into the program. This underscores the special status of these clients in the eyes of your firm.
Added value? You bet.
I am confident your key-client program will yield considerable benefits as you leverage the 80/20 principle to foster firm growth. You can also anticipate an important side benefit — building trusted advisor skills in your younger firm members. By participating in the process, they gain invaluable exposure to how trusted advisors strategize and execute on behalf of the firm’s most important clients. And that leads to a future of growing consultative services, which is exactly where our profession is headed! AT