Enhancing Client Relationship Capabilities

Ross Dawson
Originally published in Professional Marketing

Over the last few years, professional service firms in every major market around the world have made big strides forward in building their client relationship capabilities. Professionals have recognised that the critical field of competition is how effective they are at developing deep, trust-based client relationships. The issue now is taking their capabilities at developing client relationships to the next level.

In order to improve their client relationships, professionals need to understand that relationships are never static, they are a process. Unless a client relationship is moving forwards, it is moving backwards, eroded by manifold pressures including ever-stiffer competition. There are four stages in the client relationship development process:

Engaging. In this stage the firm and client begin to engage and explore the potential benefits of a deeper relationship. This is usually characterised by initial contacts and discussions, qualifying, proposals, and possibly small-scale engagements.

Aligning. The next stage is for firms and clients to begin to align their objectives, relationship styles, processes, language, and culture. Knowledge about clients is applied to customising interaction and service delivery. Discussion of high-level relationship objectives shifts the basis for the relationship.

Deepening. Here firms focus on both deepening and broadening the relationship, gaining more client contacts across levels of seniority, functions, divisions, and locations, and introducing more of its executives to create a true organisation-wide relationship.

Partnering. A small proportion of business-to-business relationships move beyond the buy-sell relationship to one of partnership. This entails jointly creating and sharing value, and is characterised by value-sharing contracts, deep mutual disclosure of objectives, and joint initiatives that draw on the resources of both organisations.

Senior professionals must understand for each of their clients at which of the relationship development stages they are currently positioned, and what action steps they must take in order to move to the next stage.

The five domains of enhancing client relationship capabilities

In order to enhance their capabilities at client relationships, firms must address five domains:

Strategy. Many professional service firms fail to specify adequately how their business development initiatives relate to their strategic directions. Simply in order to be able to allocate relationship development efforts appropriately across existing and prospective clients, firms must have a clearly articulated vision of which industries, service lines, and types of service delivery they wish to develop. This requires examining how their business environment is shifting. One of the most useful approaches is to apply scenario planning to “the future of the client,” examining how in 5-10 years from now your clients and client industries may have evolved, especially in how they want and expect service delivery. This will inform current strategies and emphasis of business development activities.

Structures. Many firms have tended to focus on the relatively easy issues of underlying relationship structures, including selecting and segmenting key clients, and establishing account management planning and client relationship management software. Other key issues include implementing effective remuneration and recognition systems for cross-selling, and clear approaches to allocating client relationship leaders to key clients.

Processes. Clearly defined processes should to be in place to support professionals in relationship development activities. These include processes for client relationship team formation, developing and monitoring client relationship strategies, and gathering useful client feedback. The most important single issue is having enabling processes in place for effective relationship team communication and collaboration.

Skills. A core challenge for professional service firms is that their senior executives have all come from a deep functional specialisation, and have rarely had specific skill development in client relationship management. High-level communication skills are required to manage client expectations effectively in complex relationships, and to customise service delivery and client communication according the client’s relationship style. Leading client relationship teams requires key skills in setting and implementing relationship objectives and strategies, and fostering collaboration across diverse teams.

Culture. Even if all of the other four key elements are in place, success is unlikely unless the firm has a culture that supports developing deep client relationships. Professionals need to be driven not only to enhance client service and client knowledge, but also to collaborate with colleagues across different service lines and locations. Every firm must focus on continually enhancing their culture in supporting client relationship capabilities, through consistent, aligned communication, relevant remuneration structures, and effective leadership.

Every firm must understand that these five domains are inseparable-any initiatives must take into account each domain and how they interact. For example, implementing a key client program will depend on it stemming from a clear understanding of the firm’s strategic context directions, effective skills for front-line professionals, and a culture that supports the initiatives. However within that broader context, firms can identify where they should focus their initial efforts in enhancing their overall client relationship capabilities.

Across the five domains of enhancing client relationship capabilities, two key themes emerge, those of enhancing relationship team communication, and developing and implementing client strategies.

Enhancing client relationship team performance

Effective communication and collaboration among professional teams is the heart of developing powerful client relationships. There are two primary objectives for building these information flows:

Consistent communication to client. The client gets aligned messages from across its contacts at the firm, and understands the full scope of the firm’s capabilities.

Deeper client knowledge. The firm learns more about its client across its divisions, locations, and activities, including recognised and unrecognised opportunities to create value.

Effective implementation of technology is essential to enable team communication. Much CRM software provides little more than glorified contact management. These are very useful tools, but for managing complex client relationships what is far more important is enabling effective information flows in relationship teams about client activities. Over the last couple of years many collaboration platforms have become available that-if implemented effectively-allow this.

Face-to-face meetings should be focused on rich discussions and developing strategy. Relationship leaders must have the skills to run these meetings effectively. Two of the most important meetings are:

Relationship team launch meeting. This is where the relationship leader defines the team, individual roles and responsibilities, and agreed communication processes on client activity. Client strategy development may take more than one meeting, but requires effective facilitation to gain insight from all participants, and result in a clear action plan.

Relationship team regular meeting. The relationship leader must choose carefully how often to run regular client team meetings, and ensure that they are run efficiently and in a way that energises participants around key tasks. Round-robin reporting on activity is rarely effective-leaders need to work through specific strategic issues in the client relationship, and effectively identify latent opportunities.

Developing and implementing client strategies

All client activities should be guided by a clear relationship strategy. Strategic thinking is one of the most important-and often under-represented-capabilities of relationship leaders. The simple frame for developing and implementing client relationship strategies is understanding where you are now with your client, where you want to be, and what action steps you need to take to get there. The six steps of the relationship strategy process are:

Client assessment. Exploring client potential, including future revenues and relationship investment required, in order to prioritise relationship development efforts.

Set objectives. Establishing relationship objectives, including revenue and profitability, strategic positioning, and intermediate steps such as key contacts and projects.

Strategy analysis. Analysing the client, its industry and trends, competition, resources required, key contacts, and leverage points for deeper client knowledge and enhanced service.

Establish roadmap. Establishing a relevant team, relationship activities that will further the strategy, and prioritising these into a clear action plan with allocated responsibilities and timeline.

Communicate roadmap. Communicating the relationship roadmap to all internal stakeholders, and sharing it with the client in an appropriate form, including relationship objectives and activities.

Execution and revision. Implementing the roadmap, gaining regular client feedback, and revising the objectives and strategy on an ongoing basis.

Every professional firm must understand its current capabilities at developing client relationships, and focus on enhancing those capabilities. Those that take into account the five domains of strategy, structures, processes, skills, and culture in their initiatives, and build specific capabilities in enhancing client relationship teams and developing relationship strategies, will move swiftly ahead of their competitors.