From the time you book an airline flight until that plane lands, your pecking order in the airline's customer hierarchy determines your travel experience. To the airlines, all customers are not equal—they are segmented and managed according to profitability, loyalty, and frequency of travel.
Like the airlines, professional service and solution providers have embraced the concept of account relationship management, yet many struggle with execution. Account management is based on the premise that a subset of your clients will purchase most of your offerings, and so you should manage and market to them differently—and directly. All clients are important to your business, but some are more so than others.
More Eggs in Fewer Baskets
A relationship strategy that differentiates your clients can reduce your cost of sales, simplify your approach to complex relationships, help you deliver products and services to clients more efficiently, and increase the profitability of your business.
At the core of a productive relationship strategy is a shift in mindset. Solution providers are often too willing to chase every new opportunity, when instead they should focus on the clients they've got and the referrals that can flow from them.
Just as with an investment portfolio, though, you should spread your marketing resources among selected clients. Don't focus on a single client, and don't apply your marketing resources equally across all of your clients.
Is It Right for You?
The first step is to decide whether an account relationship program is right for you. For larger firms with long client lists, the decision is a no-brainer. Those firms should use a program to focus resources and people on targeted industries and clients.
In smaller firms, a commitment to client relationship building is desirable, but not every firm needs a formal strategy.
Build Your Portfolio
Choosing clients to include in an account management program is complex, no matter the size of your firm. Assign clients to action categories according to their relative importance to your business at a given point in time. This initial classification is a one-size-fits-none exercise. Let your culture and business objectives guide your decisions.
Consider these questions about your clients:
- Relationship potential: Is the client interested in a long-term relationship? Can you realistically expect to sustain a relationship based on mutual benefit?
- Compatibility: Is there a good match between the client's long-tern needs and your capabilities?
- Profitability: Do historic and forecasted account activity and profitability justify an investment in cultivating a long-term relationship?
Assess each client on two criteria: the strength of the existing relationship and the potential for mutual gain. Place each client in one of four action categories:
- Manage key accounts. The clients you rate highest in both relationship strength and potential for mutual gain are your key accounts and the obvious choices for an account management program.
- Invest in relationship. Clients with a high potential for mutual gain with whom you don't yet have strong relationships are the next generation of key clients—assuming you can build effective relationships with decision makers. Invest in building those relationships to convert those clients to key accounts.
- Transition to higher-value offerings. You may have a solid relationship with clients who don't know about or understand the full extent of the business benefits you offer. Educate those clients on opportunities for mutual gain.
- Rethink. In some cases, the potential for a mutually beneficial business relationship is just not in the cards. If so, consider reducing or eliminating your investment in those clients.
This point-in-time snapshot is just the beginning. Regularly revisit each client's potential and adjust your use of resources.
Take a First Cut at Your Strategy
To achieve the promise of account management, create a specific marketing strategy for each key client that includes eight elements:
- The top five issues your client faces
- How you can help with those problems
- How you stand out from others in meeting the client's challenges
- The status of your relationships with key decision makers
- Which relationships you'll build and which you'll shore up
- The marketing tactics you'll use to position yourself in the minds of key client decision makers and influencers
- Your marketing budget for the client in terms of time and money
- How you will measure the success of each client relationship.
Once you've created the outline for your plan, seek client input. The ideal relationship strategy is one that's developed with your partner, the client. Without consensus on what you hope to contribute, your plan is wishful thinking.
But Will It Fly?
It may seem risky to manage key clients this way. After all, you could invest the bulk of your marketing resources on a small group of clients who fail to generate the profit you need. So don't give up on other marketing activities that generate visibility for your business. As a guideline, commit roughly 60% of your marketing resources to your key accounts, and the remainder to other clients.
Patience is essential. If you've selected the right clients to include in a client relationship program, you work the plan consistently, and you have the right level of accountability, the program will pay dividends in the form of long-term profitable relationships, referrals for new business, and a simplified approach to marketing.