Client account management how to become a trusted advisor - special report
Selling in Tough Times Series Issue 012 Client Account Management – it’s all about Trust How to create higher levels of trust to win more business from your clientsAre you a trusted business partner or an expert for hire? The quest to become a trusted partner in the eyes of your key clients has longbeen an aspiration of most forward thinking firms, but the now its a necessity in order to protect our current book of business and expandit’s fee income potential. Most of us think we are trusted by our key clients, but we are not always that objective in the way we formulate thatanswer. The way we do business has dramatically changed is the last few years – it’s tougher out there. The phone rarely rings as often asit used to - with clients willing to place orders for business verbally. In this new economy the ‘professional services firm’ has to proactivelyseek out revenue opportunities like never before. Being trusted by your clients now has a monetary value; in fact all research suggested themore trusted you are then the higher the likelihood that you will win more revenue from this client account. Trust is the most valuable coin inthe most modern business exchange in 2012. Trust starts with understanding your clients and their buyer behaviour better and that’s wherewe will start. The Changing face of buyer behaviour in 2012 1. Price awareness: Where there is no relationship price will always be an issue. All buyers (even you as a private individual) are more aware than ever before of their outgoings and this includes the price your firm charges for your professional services. This may mean there will be downward pressure on fees where the service is perceived as being compliance orientated and easy to replicate. Best case scenario the client may want more for less. 2. Risk averse: We live in the age of ‘risk avoidance’. Clients want to avoid uncalculated risk taking or making decisions that might jeopardise their business or tenure of employment. 3. Decision making process: Budget sign off authority has been reduced. Executive management committees and company directors are now making decisions that were being made by middle managers three years ago. 4. Loyalty: The days of unwavering loyalty are gone. Clients are now shopping around more so that ever before. They now want the best deal. They drop suppliers where no relationship exists. Clients are also now reducing the number of suppliers they are dealing with – preferring to go with trusted business partners rather than a wide ‘stable’ of experts for hire. 5. Questioning value: Clients are looking at all non essential projects and questioning the value they bring ‘to the table’. If they don’t see the value projects are suspended or cancelled. So now you know how Client buyer behaviour has changed – so what are you doing to combat this? One’s immediate response is always to suggest that I am a highly trusted advisor. May be you are, or may be you are with some clients? But stop and think about it for a minute. It’s not what you think that counts – it’s what your client thinks that does! Regardless of whether you attain trusted advisor / partner status with all your big clients, the key drivers underpinning the concept are essential for winning new business in these tougher times. The newsletter will outline some of the early steps firm’s need to take to develop and support those behaviours. Evolve Consultants 1 Written & designed by Evolve Consultants.
THE CLIENT PERCEPTION LADDER Rung 2: Expert for hire (A.K.A. – The client’s view of how they see your business relationship working) Client views the firm as an’ expert for hire’. Whilst the firm’s capability is acknowledged it may be seen as ‘project specific’. A relationshipThe first step in the journey to becoming a trusted advisor is to find out exist at “C” level but is often only with one or two executives within thewhat the client currently thinks about you and your offering. client company. Price has to be fair and reasonable but notUnderstanding and benchmarking yourself on the ‘client perception’ necessarily the lowest.ladder is a good starting point. After all, it’s not how you see thebusiness that is important; it’s how the client sees it that is. Example A partner in the firm has a business relationship with the CFO in a Rung 1: The commodity broker client company. The CFO commissions Audit and Tax work a couple This is the lowest rung of the ‘client perception’ ladder and it is the of times a year. However, the firm has no access to the board of least secure from a revenue perspective. Here the firm has a directors (Family owned company) and therefore does not get the transactional contact base with the client. In reality there is little or opportunity to expose the client to its capability around strategic no relationship with ‘c level’ executives. The transaction is often business planning, setting up family trusts, succession planning, compliance orientated and / or perceived by the client as requiring mergers and acquisitions etc. Often the above type of relationship lower levels of expertise. In the eyes of the client the work can be results in the firm being ‘pigeon holed’ as having expertise in the easily replicated or should go to tender annually. Therefore, the ‘project areas’ and as such are not considered for work outside that main purchasing criterion is often lowest price. Outside of the scope. Most firms’ draw devise a sales revenue plan’ for forecasting transaction period there is little or no time spent developing the purposes at this stage. relationship with the client. The firm tends to take a ‘maintenance’ management position at best. Key Indicators □ Relationship: Horizontal access to “C level Executive” Key indicators □ Offering: Project based□ Relationship: Horizontal / at buyer level / Low at senior levels □ Contact base: Junior & C Level - but not at board level□ Offering: Transactional (Often annual) □ Client perception: Firm adds value in specialised areas□ Contact base: Mostly at operational level □ Key purchasing criteria: Project, track record, Awareness of□ Client perception: Low expertise required service offerings, Fair and reasonable pricing structure.□ Key purchasing criteria: Convenience, price, availability □ Power base: With client□ Power base: With client □ Account management classification: Development account□ Account management classification: Maintenance □ Client believes: Firm add value but only in certain areas□ Client believes: Firm are only interested in selling their services, not in solving client medium term problems Rung 3: Trusted business advisory partner 3. Trusted Advisor / Trusted Partner Being a trusted business partner first and foremost means that the firm fully understand the clients business, its current state, its future direction, issues, its culture, the business plan, its strategic advantages, and its politics etc. The firm also has exposure to most of the main players on the client senior management team. The firm has a strategy and a plan for managing interactions with this client. Typically the plan has two components, (a) a relationship management plan and (b) an 2. Expert for Hire account management plan. (Both of which are strategic, operational, measured, and executed 365 days of the year). Throughout the year there are a number of account performance reviews which occur outside of invoiceable work. Key Indicators 1. Commodity Broker □ Relationship: High & Wide’ at ‘C’ and board level □ Offering: Consultative / Transactional / Premium □ Contact base: At all levels – All Departments within Firm involved □ Client perception: Trusted business partner with broad expertise □ Key purchasing criteria: Trust, strategy, relationship, expertise □ Power base: On both sides □ Account management classification: Key Development Account □ Client believes: Firm integral part of our business strategy Ref: The Client Perception Ladder 2 BROUGHT TO YOU BY WWW.EVOLVE.IE Contact details: www.evolve.ie / firstname.lastname@example.org
HOW DO YOU BECOME A TRUSTED ADVISOR? YOU MUST UNDERSTAND WHAT THE CLIENT THE CHARACTER BEHAVIOURS OF THE WANTS FROM THE RELATIONSHIP TRUSTED PARTNERS • They are straight talkers There is no point trying to manage the business relationship with a They are honest. Tell the truth. They let clients know where client if you don’t know ‘what they want from you in the first place. they stand. They use simple language. Over the years we have asked our clients what they want from a business relationship and here is a sample of the answers that they • They demonstrate integrity. gave us. They don’t manipulate people nor distort facts.• Be more proactive in the way you manage us • They always act in their clients best interests• Don’t do lunch - introduce us to people whom we can sell to They genuinely care for their clients best interests – even• Challenge our thinking and help us develop strategies where you when that means turning down revenue opportunities have the expertise. from time to time.• Help us network for new business • They don’t make sales pitches They only propose business based on solving a problem• Give us feedback on how we benchmark against others or leveraging an opportunity for the client.• Help us develop a picture of what our business / sector is going to look like in the future • They create transparency• Tell us the truth They are open and authentic. They operate on the premise• Stay up-to-date on whats going on in our business. of, “What you see is what you get.”• Sit in on our meetings where you feel you can add value• Help behind the scenes • They put things right.• Suggest other things we could be doing They honour all commitments, and when they get it wrong• Be professional in how you deal with us they incur the loss at their expense. They apologise fast• Be flexible and in a sincere way.• Help us find other suppliers – in the areas where you don’t operate Who are Evolve Consultants?• Always act in our best interests • They are results driven. Be fair in how you pricein 1998, Evolve Consultants lowest price leading sales They make things happen.• Founded your business – (Not the are Ireland’s but just a fair price) performance authority. We specialise in helping organisations’ adapt the right sales framework for their business strategy. We • They hold themselves accountable offer a blended approach of consulting, training and coaching to They are courageous in tough conversations. They put help them get there. their hand up when it ‘goes pear shaped’. • Business development strategy • They are consultants • Management development They question strategically not just around their areas of • Sales training and coaching expertise • Account management • Sales manager mentoring • They are business partners Our approach to improving sales performance integrates every They introduce business opportunities to their clients aspect of your organization’s sales efforts. Our methods are practical and bespoke. Fundamentally, we believe we can help • They always clarify expectations clarify your issues, focus your sales activities and most They disclose and manage expectations. They renegotiate importantly help you significantly increase your sales numbers. them if needed and possible. Contact details: email@example.com Website: www.evolve.ie Phone Number: 00353 1 8532075 For further information phone 01 8532075 or email firstname.lastname@example.org Linkedin: http://ie.linkedin.com/in/davemalonesalestippro 3 Bibliography: Key account Management – Evolve Consultants; The Trusted Advisor – David Maister; The Psychology of Persuasion – Robert Cialdini
WHY ACCOUNT MANAGEMENT FAILS GET A PLAN So the firm has committed to start out on the journey to becoming a ‘Trusted Advisor’ type organisation and you have “If you don’t have a plan for managing your key accounts you can decided to start by devising a strategy for key client account only react, and when you are reacting you are not in control.” management (KAM). Often KAM programmes fail before they get off the ground. Here are the five leading reasons why Whether you are in the process of getting more out of existing key they fail. account relationships, or wondering where to start in terms of finding and winning what might become a new key account customers, the # Lack of segmentation / categorisation platinum phrase on the journey to becoming a trusted advisor / partner “All animals are equal but some more than others” – George Orwell. is, ‘quality communication’. Not all accounts are key accounts. Therefore you need to From our experience, communications with clients and for that matter, have strong business rationale to support how you are going everyone else inside and outside your firm is average and subjective, or to segment existing clients. more bluntly, dependent on the communication style of the partner involved. It tends not to stimulate desire on the part of the client / sales Typically, some of the criteria used are current revenue target, to compel them to want more input from you or to ask for your streams, growth opportunity with in the client organisation, fit help in solving one of their problems. When firms are still at the against your ‘ideal client profile’, attractiveness of sector, ‘courtship phase’ of the potential key account relationship, a lack of size, client company culture, current relationship type, their polished quality communication will make it almost impossible to set business strategy, your reliance on their revenue stream etc. your firm apart from the rest / previous suppliers chasing the business. be warned - segment objectively. If you fail to put the effort into quality communications, your key accounts / targets cannot help but fail to put the effort into quality # Poor internal sharing of client information responses “Organisations don’t create team, they create gangs!” - Peter Drucker Here are some tips to get your account management process moving; Often the firm’s executive commits to a key account management programme without realising the type of1. Agree a firm wide protocol for categorizing accounts. Typically, investment required to make it work. One of the biggest these might be (a) Key Accounts, (b) Key Development Accounts, investments is agreeing and implementing an internal (c) Maintenance Accounts, and (d) Cash Cow Type Accounts. communications process between partners and senior Make sure you have measurable criteria behind each category. management that makes sure all relevant firm parties are2. Agree a firm wide internal communications protocol for ensuring kept up to date on what is happening in all key accounts / key cross functional input / update on progress within accounts. development accounts. Unless internal communications is3. Put measures in place to monitor and measure compliance within aligned with account management activity the ‘Trusted your account management process. Advisor’ process will collapse and cross selling opportunities4. Have a single person responsible and accountable developing and will be missed. updating the firm’s account management data base. (You should audit it regularly for quality) # Failing to introduce an opt-in KAM agreement5. Get an organisation chart for each of your large accounts. “Most people fail not because they aim high and miss, they fail because they aim low and hit and then some done aim at all”- Les6. Complete a SWOT analysis for key / key development accounts. Browne7. Identify the key influencers on decisions within the account?8. Get a clear picture of their reporting structure and decision-making This type of agreement outlines what each partner and their chain in the account team is required to do as part of the KAM Programme.9. Keep up-to-date file on the latest press releases. The more you Teasing out what each party is committing to within the know, the more likely you are to successfully keep the account and programme and developing a set of metrics to measure turn it into a true partnership. compliance to the programme will also essential.10. Create opportunities such as social events and invitations to conferences to make this happen. # Not defining the behaviours required to be a successful11. Help out key members of the account behind the scenes. Trusted Advisor.12. Have management from your organisation develop relationships at “The behaviours that helped firms be successful in the last ten years various levels and in various departments of the client company. are not the ones that will enable them continue their success in the13. Develop detailed forecasts and have monthly Key account next ten!” – Alan Sugar executive review meetings your partners. Moving from a transactional approach to trusted advisor14. Lastly, remember account management is crucial and should be a approach is like asking a right handed person to start writing primary focus of senior management in the firm, not just with the with their left hand. Unless the writer is retrained and then partner who is the primary ‘owner’ of the account. coached and monitored they will most likely slip back into old habits. 4