Client Management

By Thomas Fee

As the economy grows and selling efforts are more successful, resulting in the acquisition of more new customers, there is a greater requirement for improved client management skills. These needed skills are not the task-oriented practices that focus on revenue production or needs analysis; but the skills required to successfully manage the overall client relationship. These "soft" skills can be programmed into a logical format suggesting an entire approach to successfully managing client relationships and business.

Not all clients represent growth opportunities, but all clients do represent business to which you must devote time and resources. This means that you must decide how time and resources are invested. Selecting the right clients who represent the best return on investment (ROI) can be risky if you don't cover all the bases. Therefore, a methodical approach will enable you to make better decisions about your allocation of resources devoted to promoting client growth.

Objectives of Client Management

There are three objectives of client management: The development and creation of:

    1)   Development of Client Profiles

    2)   Satisfied Customers

    3)   References

The most important way to help a client is by understanding their business. This means that you must know, at least, the basics; revenue, profits, markets, key customers, competitors and the like. You must understand the dynamics and measurement parameters of success in their industry. Being a good supplier means that you know enough about your client's business to add a creative element to the delivery of your products and services, which the client recognizes as a value, add for them.

Satisfied customers are the result of successful client relationships. If you have happy customers, they will sustain your business and tend to avoid considering alternatives. There should be no such thing as routine client service. The small, special things you do for clients; returning phone calls, using their name, promptly addressing problems and questions are the requirements to keep clients happy.

Satisfied customers are not always willing references. To develop references means implementing special strategies. This may involve rewarding the client in some way for being a reference. Everybody likes to be appreciated for favors and being a reference is a big favor. Don't take for granted a client's willingness to help you sell your products and services to others.

Roles Activities and Responsibilities of Client Management

Whether your accounts are managed by sales or client service people clients deserve your attention in three areas: sales, service and relationship.

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Buying your products and services is the primary purpose why the client exists. Everybody must make sure that the client receives what was promised. It is also appropriate to remind the client about the benefits of doing business with you.

Service includes the tangible aspects of fulfilling client expectations. This means that you should always give your clients every reason to keep doing business with you. Service should be pro–active with the added dimension of intangible value adds like; special attention to problems, communication with all appropriate levels and other ways to make the client feel included.

Managing the overall relationship is the area where the greatest effort is required, because this is the area where problems are most likely to occur. The reason is that relationship management addresses areas beyond the provision of products and services and deals with the elements of compatibility. These elements are often overlooked as non-essential (i.e., not relating to products, services or pricing), yet are often the reason for client dissatisfaction. Every client should feel special. They should be glad to be doing business with you, and measure every alternative against the behaviors and characteristics of your relationship as the standard.

The activities involved in successfully managing clients include housekeeping chores. Insure the timely delivery of goods and services. Furthermore, when an inevitable problem or glitch does occur, it is your turn to be the responsible, concerned supplier that you promised to be when they initially bought from you. Your communication with the client and internally with your own organization needs to be clear and thorough. This includes everything from placing orders to addressing client’s feedback about your organization and its members.

The responsibilities of client managers are twofold; deliver client satisfaction and manage conflict. Client satisfaction is the result of managing the expectations of the client in regard to the provision of the tangible and intangible deliverables.

Conflict management requires additional sensitivity and skills. Poor conflict management is one of the chief causes for client dissatisfaction. Taking care of the task issues of a problem and not addressing the reactions and attitudes of an individual is equivalent to not solving the problem at all. This creates conflict in the form of bad feelings and unspoken disappointment. Being sensitive to the underlying elements creating conflict and addressing them, in addition to the task elements increases client satisfaction by serving the "whole client".

Understanding the Client

Understand your client requires knowledge. This is partly a matter of knowing the resources available from which you can acquire the knowledge to become an expert. The things you need to know about to understand your client are; information sources, how to assess trends and their organizational culture.

Information sources are straight forward if you know where to look. For instance, do not look in the annual report for financial analysis. The annual report is a sales brochure for stockholders. In this

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document, you will find a letter from the president, which usually talks about strategic direction. Financial analysis and other valuable information are available from several online sources such as Forbes, Fortune, Value Line, 10K's and 10Q's. Web sites and the internet are full of information about your clients.

Not all clients measure growth in conventional terms. Some may measure revenue or profits. Others may measure success by occupancy rates or on time performance. It is important for you to understand industry parameters and trends. Many clients see the lack of growth or business down turn as a compelling reason to look for new solutions.

Understand how your clients think – not merely what they do.

Determining Your Status With The Client

Determining your status with the client means understanding the influence and credibility of your relationship with them. What type of relationship do you have with the client? What is their perceived value of you? What is the quality of your communication? Are you aligned with those who exert the greatest amount of influence?

Classify the quality of buyer/seller relationships by identifying common characteristics and behaviors. What you label each category isn't important. What is important is, knowing that not all supplier relationships are equal.

Here's an example of how to classify these relationships:

·         Vendor:  Engagement to engagement – Must compete for all new business

·         Supplier:  Long term agreement – Provides good service and support - Considered a preferred source of supply

·         Consultant:  Advise in regard to decisions about future purchases and can accurately predict successful vendor, alternative or strategy

·         Partner:  Working toward common client goals – Viewed as a contributor to client success Has the inside track for acquiring future business

Perceived value is in the clients mind. What you do for them is not the only criteria. They may like the fact that you include them in your annual golf tournament or focus group. Sources of feedback from inside the client organization can help you determine how they define value and how well you meet their standards.

Formal communications take place at three levels with the client; operational, management and executive. Each of these levels has different criteria for determining value. It may be enough that you provide good products and services at a fair price for the operations people; but the executive level may define value in completely different terms, such as your concern for the environment or your

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commitment to industry quality standards. You must identify the criteria used for each level and communicate in those terms to be effective.

The informal organization is the driving force in every social group. They make things happen. This hidden organization is not defined by rank and function but rather by their influence. Finding out

who these people are takes time and diligence. Getting access to them requires special strategies and often the help of an internal client sponsor. 

Defending Existing Business

The first responsibility of account management is to make sure that the business you have with the client is kept and protected. An old business acquaintance used to say, "Once we get in, we never let go!" To determine whether it's possible to keep happy customers begins with serious self-assessment. Be brutally honest about your skills as both a service provider and a problem solver.

Beyond just doing business, determine the likelihood of keeping the business you have by assessing communication, problem solving, competency as a facilitator and profitability.

Communication is two-dimensional. Contacts at the horizontal level within the client helps keep you abreast of product and service issues and develop support strategies for users. At the vertical level, you must be vigilant to sell the value and benefits of doing business with you beyond just the provision of products and services.

Problem solving is an area that causes a lot of problems for servicing agents. Avoiding or ignoring problems can prove fatal at contract renewal time. There is an old expression that goes, "People will always remember a good performance, but they will never forget a bad one". The little problems that are solved on the task side yet leave ruffled feathers are exactly the kind of things that good client management is about. Many clients are lost or become dissatisfied when they are ignored or overlooked, even though a problem is technically resolved.

To solve problems doesn't require sales or management skills. It requires the skills of a facilitator. This set of skills is characterized by the ability to enable others to work out and resolve problems and concerns through the proper use of good interpersonal skills. Being a good facilitator is critical to the success of solving the "whole problem" including the interpersonal issues.

What can be said about profitability? Without it, a client can become an open wound, which demands resources exceeding the value of their business. It's hard to walk away, but sometimes its necessary. Most clients can be profitable if you are consistent at playing win/win, and persistent in demonstrating tangible and intangible value.

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Positioning

All clients have alternatives. Smart ones use their alternatives to continually assess and improve their own strengths and opportunities. Always be aware of your position in relation to those alternatives. There are two sources of alternative solutions; internal and external.

Too many suppliers think their only competition is from direct competitors. If you review your win/loss records, you will find that many sales opportunities are lost to internal solutions or outsourcing. Many clients keep such alternatives hidden from vendors as a fall back position. For

instance, Japan has only recently, opened up to packaged software. Up until the last decade, virtually all software used in the operation of business was created in–house.

Develop a dialogue with your client. Demonstrate your consultative skills and practice scenario planning with them. Ask alot of "What if" questions. Make sure you develop initiative enabling your client to accomplish their business objectives.

Continually demonstrate the competitive advantages of doing business with you. Make sure to educate your client to new techniques and practices. Talk about your tangibles (what you provide), as well as your intangibles (the benefits accrued from what you do for them).

Identifying Client Challenges

As you build strong client relationships, one result will be that opportunities become available either directly from the client or as the result of their referrals. Be ready when this happens by keeping your account data current. The key to identifying client challenges is making sure the challenges you address are their business problems and needs, not the accomplishments of your objectives to do business with them.

Keep an ongoing SWOT analysis of client strengths, weaknesses, opportunities and threats. Always be aware of which items on the list are:

    • Important to the client

    • Something you can help with

If the economy is bad there is not much you can do. Keep in mind solutions to help your client. For example, if you have a solution that will make logistic more efficient and your client is behind in deliveries, you may be able to help.

Business opportunities come from two sources inside the client: opportunities to expand existing business and new opportunities. It is at this point where client management and opportunity management converge. Once the opportunity for expanded or new business is identified, its time to begin the opportunity management process. Anybody new to the situation, (including the sales representative who sold it) who is involved in the development of the opportunity, must be required to familiarize themselves with the current client profile data before attempting to have meaningful contact.

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Make sure that whatever area you select as an opportunity, is one where you can help the client improve performance. Risking existing business on a new solution is not always wise. Many high tech companies assume that all existing clients are good prospects for new technology. They quickly replace their old (working) solutions with new technology and often times end up losing customers. Decisions about selling new solutions to existing clients carry inherent risks, especially if they are already happy.

So, before you "go for it", be sure that you have measured the benefits and risks of capitalizing on the new opportunity. Getting new business is much more expensive that keeping happy clients.

One way to assess the chances of your success with a new opportunity is to do a cost benefit analysis with the client. Measure the risk and the return, as well as the best and worst scenarios. Figure out

creative ways to implement new solutions, avoiding "either/or" choices. Instead, offer ways that the client can migrate to the new solution as a method for managing risk.

Targeting Clients for Growth

Clients who represent legitimate growth opportunities are worthy of an investment of resources beyond those necessary to provide excellent service. Assess your clients specifically for those that represent the best growth opportunities.

You will need to know four things about a client to determine their potential for growth; attitude about change, perceptions about you, their quantifiable business potential and whether your relationship will endure growth.

Every client has historical patterns of growth and development. Some are traditionally conservative and some quick to try new things. Whatever their normal cruising speed, potential growth clients must have demonstrated both their willingness and ability to make change. The current business environment will also have a bearing on their readiness.

The client's perceptions about your organization and its capabilities in facilitating change will also be relevant. If you have products and services available but the client doesn't have confidence in your ability to do the job, you might open the door to an alternative approach by suggesting change.

Whatever the change, it must be justified from the standpoint of investment and return. You don't want to spend a lot of time and resource getting a client to agree to a plan that does not produce incremental business for you. Consider where the extra business is coming from; competition, outsourcing, newly generated, etc. How do these factors impact your ability to get the business and at what cost?

Finally, asses whether your relationship is good enough to influence the decision makers. You must understand the driving and restraining forces for change. Consider the necessity of sponsorship from within and competitive issues.

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Getting Client Cooperation

Once you have compiled the information required to; understand the client and their needs, determine your status and position, identify challenges and target area for growth, you can make an informed decision about their potential. With the client’s cooperation, you should be able to develop an accurate assessment of the resource investment you'll be making and the potential return. Have your support lined up from within the account before you begin formal activity.

You'll need to; develop a value proposition, present your plan, devise a strategy for success, assess your chances of winning the business and determine how to measure success. All of this must be measured to fit the client so they will join in the effort to adopt your new solution.

The value proposition is the element of your story that translates why doing more business with you will be beneficial for the client. Define how you will share the risk of enabling their continued success.

Make sure you get the right audience. As one of my clients says, "A lot of account representatives have the know how, but not the know who!" The audience to whom you present your value proposition must be comprised of the people who will make the decision. Present the story in terms of their definition of value. If you know the client well enough, you'll be able to tailor this with precision.

Before you execute your client's business development plan, make sure to have a strategy for achieving your objectives. Include the necessary resources to implement it. Since you are the initiator, you must have the will and ability to follow through. Do some "What if" planning to identify possible roadblocks and objections.

Before starting, assess your chances of success. The best sales people only go after deals they know they can win. That's why they're successful! If there is something that will hinder your chances of winning, address it before charging ahead. Your knowledge and relationship with the client will really pay off only if there is a genuine opportunity.

Finally, know how to recognize success once you achieve it. Measure it both in terms of your results and the clients. Make it your business to make the project work, which will open even more doors for opportunity in the future.

Conclusion

Knowing about client management isn't enough to succeed. Unless you have a method for implementing good client management practices, your knowledge is of little value. Therefore to succeed, you must implement a methodology that converts knowledge into practice.

Existing clients can be extremely valuable sources of additional business. Keeping them happy and getting their referrals and references is vital to business continuity and success. A methodical approach to managing clients is critical to your long-term profitability and survival.

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About the Author:

Thomas Fee is the founder of Performance Management Consultants™. Performance Management Consultants™ is dedicated to providing the next generation of professional development enhanced by technology and coaching to enable users to change their behavior resulting in improved performance.

They have developed numerous programs and processes to enhance the skills, behaviors and activities of managers, sales, client service and pre-sales (SE) professionals. Performance Management Consultant’s™ programs address the specific challenges faced by those working in the areas of business practice known as Customer Relationship Management and Complex Sales.

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