Part 1 of 6
Why Key Client Management?
Typically 80% of turnover comes from 20% of clients and crucially 95% of profitability comes from that 20%. Your entire business is built on client relationships and how you deal with your existing clients will determine your company's future.
The key to success is effective leadership. Someone has to decide that managing the client base more effectively is essential to the future of your company, or that if the current way of managing clients doesn’t change, then the company is at risk.
Then, to implement a key client management programme, you’ll need to apply energy and commitment to achieve buy-in throughout the company. Most professionals will see the value, but what invariably happens is that when they get back behind the desk, client management issues get put onto tomorrow’s to do list. In fact, achieving the key client management actions may be in conflict with achieving today’s objectives. You need to commit some additional resource and time to key client management, to achieve significant results.
Current clients vs. new clients
Historically firms place a high value on winning new work from new clients, but conversely you should only pursue new clients when:
Current relationships are so strong they guarantee us new work
They always include us in any new work discussions
We have identified all the opportunities likely to occur in their future
We have examined every area where we can sell capabilities within existing client
Very few firms can claim to have fulfilled the criteria above. Work won from existing clients is more likely to be more profitable for two reasons:
Selling costs are likely to be much lower.
Profit is a factor of margin and volume.
What are the risks of implementation?
Being over-ambitious and trying to do too much. (This has a serious impact as previous attempts may have lacked realism and subsequently future attempts lack credibility.)
Failing to up-skill practitioners and to embed culture change. (Once a programme has been introduced, unless a sustained focus on embedding the new culture is made, old habits will creep back in and the momentum will dissipate.)