Strategic Client Marketing

November/December 2000

Strategic Client Marketing

 

With the current healthy economy, the biggest problem most firms are having is finding more good people. Yet, the healthiest firms … those growing at over twenty percent per year, and achieving over twenty percent profitability … are largely doing so because they’re doing more than just letting clients walk in the door. Paraphrasing an engineer who leads business development for a segment of a large, successful firm …

“With our size, we can chase and win more than our ‘fair share’ of all sorts of projects. But that really doesn’t seem to make any sense. So we started thinking about which clients we’d define as ‘Strategic.’ We began focusing our energy on those clients. And the results have been incredible.”

Professional services marketing seems to be in a third stage of evolution.

1. In the 70’s, everyone was learning how to cold call, how to organize their marketing materials, how to create the right responses to various government forms, and how to conduct “top drawer” presentations. The focus was: “Win the job!”

2. In the 80’s, professionals began realizing that the focus needed to be more on the client than on the project. That gave rise to “Relationship-based marketing” … with processes such as The Mandeville Techniques. The focus was: “Win the client, and do a lot of jobs.”

3. In the 90’s, the influence of TQM spread. Clients went to “Indefinite Quantity Contracts” that would award the lion’s share of work to one or a very few firms for, often, five years … with an opportunity for an automatic extension for another five years, if the client was pleased. The focus then shifted to: “Identify a ‘Strategic Client’ in a ‘Strategic Market’ and maximize the percent of all their service needs we provide … and maximize the number of years we provide it.

What’s required, then, is “Strategic Thinking” about: (1) Markets; (2) Clients within those markets; and (3) The total service needs of those clients.

Strategic Markets.

This is the foundation for everything else. Many long-standing markets have become “Commodity” markets. The supply-demand amounts have achieved a balance. A client can, literally, find scores of firms to do the work. In their mind, all have a reasonably solid ability to do whatever projects need to be done. So they “shop” around … inviting many firms to go through the “marketing rain dance” to win their favor. And the winner gets to do the project for a very marginal fee. With the higher marketing costs and lower fees, some firms report profitability in mature markets of …

… two to five percent! That’s “pass-through money” that simply can’t sustain a quality professional practice. Yet, the problem is less one of identifying new growth markets than it is letting go of mature ones. Professionals with thirty years in a market say …

“It’s what I do.”

Firms need programs for identifying growth markets, for (gradually) transitioning themselves to those markets, for re-engineering their firms to respond to those markets, and for reprofiling their services and service delivery to respond to those markets. As the strong economy begins tapering, market strategizing is key. Then …

Strategic Clients.

Once you’re positioned in a growth market, you’ll need to ask yourself …

“What is our definition of a ‘Strategic Client’?”

For some firms, it’s the gross amount of revenue the client awards in a given year. For some, it’s a client’s loyalty … their willingness to award repeat work on a sole source basis. For some it’s a client’s track record with litigation. For some, it’s their ability to service a client … who could be located all over the world. What crucial here: define the criteria that make sense for you, and then focus your efforts on those clients.

Strategic Marketing.

Use the “Client Service Management Guidelines” to develop a detailed strategy for each of your strategic clients. It could involve traditional marketing efforts for getting in the door, and for winning your first assignment. Then, it must evolve into actions for: (1) Maximizing client satisfaction; (2) Expanding your breadth of relationships with individuals in the client organization; (3) Maximizing the range of services you provide to each client individual; and (4) Creating a professional/client dependency that causes each client to want to come back to you … again and again … for years.

Just “Doing a good job” is no longer sufficient. For each “Strategic Client” you’ll need a set of specific actions that you can assign, budget, and perform that can fulfill your strategy. The results are worth the effort …

• A steady stream of new business that meets your professional goals;
• Enhanced profitability … commonly from to twenty to forty five percent;
• And a lower cost of sale with increased professionalism and comfort.