In a recent post we explored relationships in business and what makes a rewarding and productive partnership.
This week we are focusing on a topic, which is very closely related, in client retention, and how you can ensure you have built a long-lasting relationship with your current clients.
It is common practice for businesses to focus on their strategies for gaining new customers, when it is equally vital to create a robust strategy to nurture loyalty from those who have already bought from you. In fact, I recently recommended a perfect book on this very topic.
In order to help you optimise the relationship with your clients, in this video I share an excellent strategy I use myself, in which you can assess yourself and devise a service score for each client.
For me, this usually proves a huge eye-opener and helps identify exactly where your service may be falling down.
If you would like to hear more about this please feel free to get in touch.
Prefer to read rather than watch and listen? No problem – here’s everything I said in the video as text:
The growth of any organization is built on two legs, one being the acquisition of new clients and the second being the retention of existing clients.
What I’ve noticed very often is that, in most organisations, the acquisition of new clients gets most action, most of the focus, most of the resources. The second leg, the retention, gets more of the good intentions, good thinking, good wishing, good will but not so much of the action in a structured way.
Today I want to share with you a structure, which can translate your intention into action which can help you have something measurable through which you can manage the retention of your accounts. Not just that but actively grow those accounts and trust me in these times it’s critical so I want you to pay attention to it.
Please remember what I’m sharing with you is literally a working sheet which was developed in one of my sessions with a client who raised this point. He was talking about all the ideas he was already thinking of, like doing surveys, what should happen with the personal notes, the events, the meetings, all that stuff.
Again, as I said, how do we measure it? How do we structure it so it’s progressing?
I shared the base model with the client and then we adapted it for this organization. Pay attention to the headings in the spreadsheet, it’s a simple grid. What we did was we looked at the top 20 clients, which were contributing to 80% of the revenue, as in the 80/20 rule, so do that for your organisation too or for your department, in this case.
Here, I have given an example of 10 clients. Write down the name of the manager or the account person who’s taking care of that client.
I first look at how many people in your organisation have contacts in the client’s organisation. Then I do the reverse, how many of their clients have contacts in your organisation?
Do they just know one person in your organisation or is it more than that? Because the more people they know, the more roots, the better strengthening of the relationship and therefore it impacts the retention.
Next, we look at the last six months and give a benchmark of having at least two meetings over the that period. Anything less than that is not optimal.
After this is the level of senior most decision makers. Are your contacts in the client’s business at junior level? Middle management? Or are they at senior or director level?
Also, in this, we said we need to have systematic quarterly surveys and therefore you include the score from the last survey. On a scale of 1 to 10, how much did the client you’re your organisation? Anything which is not more than eight, 8.5 onwards, must be taken as 0.
Then a consolidated score is created, you will see in the example, it’s written as a maximum of 6 points.
You will see the formula for this example is:
- If the number of contacts in a client’s organization is just 1 then you get 0
- If the number of contacts the client has in your organization is more than one, then they get 1 point, otherwise it’s 0.
- If they’ve had two meetings or more that they get 1 point.
- The level of senior most decision maker gets added, so if it’s senior most, then they will get a score of 2, the maximum score.
- If they get more than eight in the survey, they will then get 1 point.
Now as each account is being mapped in the example given, the organisation has one contact in the client’s business, the client also knows just one person in the organization, which means they get 0 there. They’ve not had any meetings, which is again 0 points but the contact person we have is at the highest level, so a score of 2 because that’s the senior most level. Finally, in this case the business was rated as 8, so again they get zero points here.
You can do this exercise for each account, it’s quite straight forward.
Let’s have a look at client 6 in my example, here there are two contacts that we have in the client’s organization, the client knows two people in the example organisation, they’ve had three meetings in the last six months and the contacts that they have are at senior level. The satisfaction has been amazing, so they get the maximum score of 6.
So, it’s it all gets mapped out and then you will also see I have built in the comments and action points.
We are also trying to track how the account is growing, so:
- What was the revenue 2019?
- What’s the target for 2020?
- What’s the current performance of these accounts?
Remember, these are your top 20 accounts, contributing to 80% of your revenue. You better measure them at an individual level, otherwise aggregation at this point can really cause you to lose the finer details and make the wrong decisions for these accounts.
This is now giving you a good picture what the performance of each account is and what is the client service score.
In my example, my worry points are anybody with a score of 1-4. These are clearly not strong relationships.
Now you start analysing this:
- Maybe more meetings need to be lined up?
- How do we make sure that the client has more contacts with people in our organisation?
- Can we know more can we ask for more introductions?
- Can we proactively reach out to more people?
Everything gives you a very clear indication of where there are gaps. It’s not always about doing more surveys or doing more meetings. For me column C and column D are essential. Column E ensures that there’s no blind spot, there is frequent communication. Column F is meeting the right decision makers in the business and obviously you will adapt it based on your business.
I hope that gives you a sense of how doing this exercise will help you to identify the gaps in client relationships and what exactly needs to be done. Remember you can absolutely make it a KPI, saying every account must be at a score of four or six, depending on what you create and the person who’s accountable is measuring that, is progressing.
Remember, it’s not just a tick in the box exercise, your focus is not to just get score of five or six. Your focus is that these accounts are active, and they are growing. That’s what really is the true sign that the client is happy with what you are delivering, and they are willing to trust us with more of their business.
That’s what makes the difference at the end of the day.
I hope you found that useful and remember, good intentions it don’t ensure progress. Intention must translate into action and I’ve given you a very simple template to work with.
Make sure you adapt it for your organization and when most clients do this exercise the first time it’s an eye-opening exercise. Don’t worry even if you see red flags, that’s a blessing. It means you can do something about it, you can correct it before any negative outcome happens and catches you by surprise.
Pre-emption is a world-class capability and I hope this helps you with that.
If you would like to discuss or hear more, please feel free to get in touch.