Aug 14 '14
In our first article we set the scene for a summer of client love… a time to think about key account management and focusing not on new prospects, but on existing clients. We quoted the wise man that said: “In my opinion, only if you can answer ‘yes’ to the following questions should you even consider doing new business prospecting before KAM… 1) Is your current client relationship so strong you’re guaranteed recurring work, 2) Is your communication to current clients so strong and wide that you know you will automatically be included in cross-selling conversations, 3) Have you already identified all opportunities with that client and set out a clear plan to follow, 4) Have you proactively examined every possible area in which you could sell products or services to that client”.
So… the gauntlet is well and truly thrown down… now is the time to start sharing the love around with the existing clients. What… all of them? We hear you cry?
Of course not nobody has that much love to share around. We want you to choose – methodically, dispassionately and with set metrics – those clients that have the most potential to influence and contribute to our firm’s strategic plan. That doesn’t just mean the clients that you can get more money out of but also the clients that you need to keep to underpin your market offering as well as those that contribute in other ways.
So, let’s get down to brass tacks. What do we mean? What does a key client look like?
A key client is one that has the potential to play a fundamentally important role in helping you to achieve your commercial objectives. This means that they have to be important in terms of one, some or all of:
- Profit – Rather than looking at revenue or, rather, income, let’s actually look at profit. They might be a big client but are you making any profit on them? How much is it costing to keep them bringing in that much work? And how much potential is there to improve the profitability of that client?
- Strategic value – Most firms segment their work by sector in some way and an example of strategic value is a client being a household name, or significant influencer within a particular sector. Ok, you might only do a small amount of work for Ben & Jerry’s but if you run an Ice Cream sector team, they’re going to be vital.
- Growth potential – Many people consider this the most important factor for consideration – indeed, the very clever person we quoted at the start does. A client’s potential to grow and improve, in terms of relationship is an importance consideration when choosing key accounts. Can you do more work or work in other fields? Can you improve profitability?
- Bragging power – Finally, it’s worth considering the value of a client to you for recommendations and referrals. Some clients might not be big bucks but they might regularly introduce other, larger clients, or provide glowing references in pitch scenarios. Value to your firm doesn’t just come in the form of £ or $.
Selecting key clients – easy steps to getting it right
There are many books out there that provide detailed matrix plans and questionnaires for you to fill in. We tried reading them and to be honest we got a bit of a headache. It shouldn’t be a complicated process.
- Consult your firm’s strategic plan and refresh yourself with the commercial and strategic objectives. In short, what do you want to achieve. This should (if it has been done properly) set out a clear idea of the types of clients your firm is committed to delivering professional services to (big, small, private, commercial etc – hopefully in far more detail than that). It should tell you whether you are focused on specific sectors or service areas, geographical territories or whether you’re committed to pushing particular products and services. Are you looking for revenue generation or geographic expansion? Are you prioritising certain areas above others? This should give you a good foundation for any KAM programme by setting the goal posts out clearly.
- Review your existing clients against these objectives. Once you know what you’re aiming for then it’s time to map that against the clients you have. The best way to do this is to set out a simple scoring system (you know the type of thing – 1= awful and 5 = brilliant) against a set of criteria. This must be bespoke to you so don’t be fobbed off by consultants peddling off the shelf systems. You need to know how well these clients currently contribute and can potentially contribute to achieving these goals. For the avoidance of doubt, you’re looking for those that either do contribute well or could contribute well.
- Review your shortlisted clients (or all of them) against more scientific metrics. You may wish to consider (either as part of step two or afterwards) reviewing the profitability and financial health of your important clients. There are many systems out there that can do this for you and produce not only a helpful report on existing clients but profile (and find) new clients for you. This is a service we provide, here at Elephant Creative. Importantly, what we’re looking for here is a clear understanding of the types of clients that can contribute not only to your strategic plan but do so profitably. It’s not essential but it’s worth consideration.
- Ask some final questions. Once you have your long list of potential key clients it’s important to look at their potential for contribution longer term. This means asking five questions – almost by way of a sense-check at the end. You should have covered off most of this in the process anyhow and whilst they’re not deal-breakers it’s worth considering them as a final check in this process: do they make a high volume financial contribution (or have the potential to do so; are they a large and complex organisation with scope for exploration; do they currently (or potentially) utilise more than one area of the firm; do they currently (or potentially) receive more than one specific type of advice; and do you work for more than one division within the client company?
By this point you should have a pretty clear starting point for your list of key accounts. The most important thing to remember is that this isn’t cast in stone. Yes it needs to be clearly set out as a process otherwise you’ll have everyone saying their clients are all key accounts… but it shouldn’t be about policing or big sticks. If this is your first time, it must be a process within which there is scope to learn and develop. To refine and improve your processes. So, once you’ve set out this list, the best advice we can give you is to step back, sleep on it and then review later on. If you still agree with it then it’s time to move on to planning what you’re going to do with this esteemed bunch of clients.
Watch out on Tuesday for our second article in The Summer of Client Love series, talking about developing key clients.
About the author: Helen Hammond is Managing Director at Elephant Creative. After ten years of working in law firms and chambers in the UK she set up Elephant Creative to take a different approach to professional services marketing. Working with firms in the UK and US, Helen specialises in delivering common-sense, practical advice, focused on clear business development objectives. She has worked on KAM and CRM projects at a number of firms, and is particularly known for her commitment to workable solutions, rather than consultancy hot air.