Your top 10, 20 or 30 clients likely make up a large portion of your firm’s revenue. Managing these relationships is important, not just for client retention, but it will likely increase the revenue you receive from those clients.
Does the left hand know what the right hand is doing?
Having visibility over who is in contact with who, is an important place to start. Without knowing who from your firm is engaging with who from your client’s organisation, it is difficult to implement and manage any form of key client program.
As an example, are you confident that you know who from your firm has been in contact with the person or people you’re about to meet with?
It is equally important to ensure that your firm is engaging with your top referrers. A key referrer could provide your firm with revenue equal or greater than one or more of your top clients.
What does it mean to manage a key relationship?
Managing a relationship is about presence and trust. You cannot manage a relationship if you are only in contact when you need something, nor can you manage a relationship if you are not in contact at all.
From a key client perspective, if you are unaware or lack visibility over the contact that other groups or individuals from your firm are having with your key clients, just how effective can your key client program be?
Managing a relationship and building trust starts by staying in touch, as simple as that may sound, it is critical. As they say ‘a client you have not spoken to for 6 months is no longer a client’ and if a referrer doesn’t hear from you, they will soon become someone else’s referrer.
Let’s talk dollars
An existing client that is well managed, is not only more likely to use you again, but they are likely to be less concerned with price.
It will cost your firm a lot more time and money to attract a brand-new client than it will to win work from an existing client. Despite this, many firms will put more time, money and effort into managing an inbound website enquiry, than they will ensuring the are staying in contact with their key clients or referrers. There is a sense of irony in this, as firms will often identify key client and referrer management programs as strategic initiatives, yet despite the worth of these clients, some will be using spreadsheets to try and manage these strategic programs.
How important is a key client program?
A key client program is only important if you want to keep your key clients. But more seriously, the answer to the questions depends on the percentage of revenue that is attached to your key clients. For most firms, 80% of their revenue will come from less than 20% of their clients, so managing key clients for these firms is critical.
The majority of firms that I speak to have identified or have a formal key client program in place as a part of their strategic initiatives. The key business drivers are typically focused around: increasing wallet share, cross servicing, making the client more sticky, multiple matters becoming more profitable, etc. However, how firms go about supporting these key client programs does vary drastically and sometimes with mixed results.
How important is it to manage your referrers?
It is not, unless there are other firms that could do the work for these referrers. If you are not the only firm capable of doing the work, then managing referrers will be very important.
Staying in touch with a referrer is often much harder than staying in touch with a key client. Referrers can be easily overlooked. You may only need to stay in touch every 45 or 90 days, but it is important you do. For many practice areas, the work sent in by referrers makes up the majority of their revenue.
How you manage your key clients and referrers is up to you and your firm, however failing to do so, will not only overlook the easiest possible way to increase revenue, but it may result in the loss of revenue. Lost revenue from a key client or referrer will be difficult to recover and may have a significant impact on your firm’s revenue, so managing these relationships should be critically important for most firms.