Part 5 of 7
Your strategically important clients need urgent attention
So what does this mean for firms in the construction industry? Well, it means assiduously following the 80:20 rule (80% of fee income coming from 20% of clients). This means researching your existing clients’ actual requirements and potentially changing the way you serve them. Clients have been getting bigger and more sophisticated. They want tailor-made solutions and are prepared to rationalise their supplier base. Look at the many blue chip clients of this world - these big players started to play hardball a few years ago and this trend has spread. Cosy relationships and frameworks now face regular strategic reviews, as the current demands of economic reality must surely be passed down the line to achieve cost savings. The key therefore, is to actively court a close relationship with your strategically valuable key clients, perhaps by developing new ways to work with them so that they cannot easily drop you and to create exit barriers such as a growing dependence on your knowledge of their business.
No longer can incumbent service firms feel safe. They will have to proactively differentiate and to demonstrate why they continue to offer the client the best option. This will mean exploiting distinct sector strengths and marketing their unique problem-solving abilities, perhaps honed whilst on the last few jobs. For example, I am aware of some firms offering existing clients a lower fee structure for the following year’s term contract, because they have developed streamline processes to the benefit of all. This truly shows commitment to building a long-term client relationship.
See part 1 of 7 here
See part 2 of 7 here
See part 3 of 7 here
See part 4 of 7 here
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