Effective Client Management in Professional Services

How to Build Successful Client Relationships

Jack Berkovi

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317145622
• Edition: 1
• Topic: Business
• Subtopic: Sales
• Index: Business

How do firms become Client-centric? Effective Client Management in Professional Services is about putting the Client first, everywhere, in the activities of professional services firms. The book introduces The Client Management Model to enable firms to assess their level of Client orientation and relationship development. It also features The Client Management Index which enables firms to benchmark their result against their peers. Many firms are still developing and improving their commercial structures and approaches to attract, develop and retain Clients. Characteristically, professional services firms tend to lag their consumer goods and service industry counterparts in overall commerciality. Only recently have they discovered the value of having a strong brand promise with the associated employee engagement. In many firms achievement of Client satisfaction is not a strategic objective; this may need to be reviewed. This book provides a comprehensive, pragmatic guide to the Client relationship journey, from identifying potential Clients to their engagement, care, retention, development, loyalty and beyond. The handbook format has exercises and tools which can help to establish which Clients are likely to be the most lucrative and thus provide the desired financial returns. The book also includes insights from top practitioners, anecdotes, case studies, charts and useful exercises and checklists. Readers can also determine their own level of effectiveness using the end of chapter reviews and a diagnostic tool to produce a Client Management Profile.

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Chapter 1
Orientation: Developing a Culture of Client Orientation

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Synopsis

Orientation, the first element of the Client Management Model™, explains:

• the impact on Clients of a firm’s structure; Client service models;

• the importance and benefits to all parties of having a Client-facing firm rather than a practice or service orientation;

• the characteristics of a Client-facing culture; the Client/management needs dilemma;

• Client expectations;

• setting objectives and Key Performance Indicators (KPIs) that reflect Client orientation;

• the importance of employee engagement; making a difference; recognising excellence;

• the evolution of strategic marketing and its impact on Clients;

• Client representation at the board level;

• the importance of knowing the firm’s top Clients.

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THOUGHT STARTERS

• How should your firm be structured?

• What are the options?

• What defines your culture?

• What is your level of employee engagement?

• Is Client-centricity part of your DNA?

• What are your Clients’ expectations?

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Impact on Clients of a Firm’s Structure

Professional services firms have many choices in the way that their organisations are structured. However, unlike public companies, the majority of professional services firms are privately owned, often by the partners of the firm. This factor alone often creates the desire for a practice-led structure. This can often cause Clients using multiple practices in a firm having to fit in with the organisation’s structure. So it is worth investing time to review the firm’s current strategic position and consider the various options open to its owners and the impact of each option on Clients.

Most firms are organised along service lines, so, for example, an accounting firm will usually have separate practice groups covering audit, advisory work and tax, and within these sub-groups specialised areas such as forensic accounting, pension consulting, internal audit; a law firm may have practice groups covering corporate litigation, the environment, intellectual property and public policy. Property firms are often organised into commercial and residential. These service lines are often supported by dedicated or centralised marketing and business development teams. Such support is covered in the next, and subsequent, chapters.

So do we ever consider the impact of a firm’s structure on Clients? The tendency when practice-led professional services firms meet Clients is that the practice group partner or specialist leads with facts about the firm and how their particular competences can help to solve problems. Clearly opportunities for work in other areas of the firm can be missed when a Client is only dealing with one person or team with a specific service line responsibility. Although this approach is quite commonplace, it carries with it the risk that the person or team may eventually have a dominant role within the firm with respect to the Client relationship and this can inhibit growth.

Many firms try to overcome this practice-led behaviour by having a Client management policy that assigns a second partner from a different discipline to oversee the development of the relationship. This benefits the Client, giving them access to a second external perspective on their business. It also protects the firm and Client in the case of a partner leaving, so there is still some continuity until a change is made. More importantly, it also can provide the firm with opportunities for additional assignments. Having a dual-partner responsibility can thus increase the revenue stream. By taking this more holistic approach, a broader discussion is also more likely to occur when a Client meets with two or more partners with different remits. This benefits the Client in showing that the firm’s people are really interested in helping them to solve a wider variety of problems. Of course it is sensible for the lead partner to allow sufficient time for the Client to develop a trusted relationship with the firm, through delivery of excellent service, before trying to introduce too many other specialists. Another process which benefits the Client and the firm is the development of Client Service Plans that incorporate all practice areas that might be relevant to the Client. Further commentary on Client relationship development is covered in Chapter 8.

Some firms create regional practice teams providing a range of services that focus on Clients within geographical boundaries. However, this approach can sometimes lead to contact confusion and internal ownership issues with Clients having multiple sites across these artificially created regional limits. So would a firm organised with Clients in mind be possible? A sharing mentality and behaviour is a necessary pre-requisite to optimising a firm’s performance. Ultimately, given that most professional service firms seek trusted adviser status with their Clients, it may be worth reviewing the level of Client orientation that really exists in a firm.

ORGANISING AROUND SECTORS

Many firms have recently created multi-practice teams that align with Client sectors, using a ‘matrix’ structure (see Table 1.1) – so, for example, a manufacturing team would deal with Clients from that industry, irrespective of location and services required. Practice or service line heads are still in place, but are encouraged to form cross-functional teams when facing Clients. This centralised approach tends to prevent confusion in the Client’s organisation.

Table 1.1 Matrix of Sector Teams and Practice Groups

In Table 1.1 it can be seen that the Aerospace sector team has members from Practice Groups A and C, food Clients would be handled a sector team involving three practice groups and so on. Clients benefit by having access to industry specialists who work in various practice groups. Another example from the matrix is that Practice Group C, which could be focused on, say, employment law, straddles all the sectors. Over time it might be possible to cross-sell more services to other sectors. Table 1.1 can also be used to show the current situation and can be updated over time. Both practice groups and sectors can operate globally as appropriate to a firm’s country presence, which adds a third dimension to the same matrix. This type of organisation is common in many of the mid- to large-sized firms and requires regular and timely communication within the groups that interact in the structure.

KEY CHALLENGES

It is evident from recent Client care research that looking at business through the lens of the Client, rather than that of the firm, is still the key challenge facing many professional service organisations. Structuring a firm around its Clients and markets is considered best practice, but doesn’t really appear to happen in many firms because of other priorities. As we move through this book, it becomes clear that the challenge is dealing with the notion that Clients are buying solutions, not services, and that engaged employees deliver the best performance for Clients.

Another key challenge for international firms, or firms with international Clients, is the ability to provide a seamless and consistent service wherever the Client wishes to do business, especially across country jurisdictions and cultures. The management of international Clients and firms is covered in later chapters.

Figure 1.1 Examples of Client Service Cycles

Examples of Client Service Models

Client-facing firms recognise that Clients follow a cyclical model over their procurement lifetime. Many firms have developed their own Client service models often in a cyclical format, as shown in Figure 1.1. These outline the cycle of gaining interest, through evaluation, purchase, usage, repurchase and loyalty. Client-facing firms manage Clients through such cycles and know at which stage they are with each Client.

An Orchestrated Performance

Many of us enjoy well-performed music. When a large orchestra – or even a quartet – plays beautifully, there is a feeling of satisfaction in the players and their audience. We can think of the analogy of a professional services firm being the orchestra and the Clients its audience. If your firm, as the orchestra, delivers with everyone integrated, playing their harmonious parts, the result for the Client – your audience – will resonate accordingly. Your managing partner or CEO becomes the conductor of the various sections of the orchestra. Now of course not all Clients will meet the managing partner or CEO, but the principles of stewardship drill down to all practices within the firm. Consider the situations where the musicians are not playing in harmony and its potential impact on the audience. Think about situations when some parts of the orchestra have to share the stage with newcomers and integrate their performance. Clearly continuous practise is necessary for teams of experts to behave in a co-ordinated way. This approach requires dedication to the understanding of Client requirements. They tend to prefer an orchestrated, joined-up, harmonious approach rather than dealing with often unconnected soloists.

Characteristics of a Culture of Client Orientation

There are many factors which underpin a Client-oriented culture. In this section we will look briefly at its key elements of: sector focus, Client-facing processes, Client satisfaction, Client relationship management and Client-related performance objectives and highly engaged employees. Each of these will be expanded upon here and in later chapters. These elements form the basis of Client orientation.

SECTOR FOCUS

Experience has shown that the more oriented a firm is towards its Clients, the more successful it is likely to become compared with firms that focus primarily on their services. When purchasing decisions are about to be made, it is usually evidence of a firm’s sector or market knowledge in depth that tips the balance in the Client’s mind when all other aspects, such as reputation, technical skill and cost, are perceived as being similar. The trend within the larger and medium-sized professional services firms is to create multi-disciplinary sector or market-focused teams that can operate globally, regionally or nationally – as relevant to the Clients’ requirements and size of firm. In today’s competitive arena for professional services, having a Client-centric commercial strategy is most likely to bring better results than strategies that are further removed from Clients.

CLIENT-FACING PROCESSES

For a truly Client orientation, it is essential to have processes that work for the Client rather than for the firm. Employees need to understand that Clients are always seeking value propositions from their suppliers. So, rather than working in often isolated departments, it is important for fee earners and support staff to meet regularly to discuss potential opportunities with Clients and interact, ideally in cross-functional teams, to constantly add value to the Client experience. Internal communications such as intranets can help bring together otherwise separate parts of a firm. This Client-centred approach can provide regular updates on progress towards the firm’s goals. Employees must also understand how the firm differentiates itself from its competitors. Many firms have deliberately organised their office space to facilitate cross-practice contact and to encourage the sharing of information across their artificial boundaries.

CLIENT SATISFACTION

Client satisfaction is the extent to which the firm meets or exceeds Client expectations. Client satisfaction information provides essential feedback to employees, however it is gained. Active listening to Clients is a skill that is not fully developed in many firms, with latent needs often going unfulfilled. Structured surveys can help people to understand how the firm is doing, and regular, less formal, contact with Clients can also pick up additional messages about the firm’s performance and opportunities for further work. Engaged employees want to know how their firm is performing in the eyes of its Clients. The quality and effectiveness of Client service that they deliver is often what sets firms apart. Many firms regularly benchmark their performance with Clients against their competitors and peers to establish their market position. Enlightened firms measure Client satisfaction through formalised surveys and quickly take remedial action when needed. It is also important to have in place a Client recovery strategy and process for situations where satisfaction is below expectations. Client satisfaction is covered in more detail in Chapter 4.

CLIENT RELATIONSHIP MANAGEMENT

A further element in Client orientation is to create a Client Relationship Management (CRM) process that requires everyone to play their part in keeping the information on each Client and the status of the firm’s relationship up to date. Having a CRM philosophy stresses the importance of sharing information about Clients and this helps to break down the artificial barriers that sometimes exist within and between a firm’s departments and practices. The best CRM programmes are supported by systems and technology to enable rapid data searches and relationship status report outputs. With the rise in use of social media channels, many organisations have started to develop a social CRM strategy to enhance Client relationship development. This recent phenomenon is discussed further in Chapter 14.

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