Have you ever had a barber or hairstylist you could always count on to do an excellent job and then, one day, you learned that this very person left their barbershop or salon?
At that moment, which would you be more likely to do – follow the person who cut your hair to their new place of business or try someone new at the shop you have been using?
All things being equal (i.e. the professional isn’t moving on to somewhere completely inconvenient or more expensive), many of us are going to follow that person to their new location. And really, why wouldn’t we? They know our preferences and we’re comfortable with them. So if we have the option, who needs to start over with someone who may or may not understand what we want?
Come to think of it, we’re not just talking about haircuts anymore.
In a variety of professional services firms, the “barber” could be any person who has done a masterful job of building rapport with a client. When that person switches jobs, your firm may find itself suddenly at risk of losing that valued client.
So what’s a firm like yours to do to prevent that likelihood? Simple. Start employing a strategy now that makes it harder for them to leave your firm by taking two big steps.
#1 : Build relationships by the bundle
When you have one and only one person from your firm regularly connecting with the client, you’re setting the stage for that professional to take the business with them if they leave. Like the partner of an accounting firm who works in the Tax department and leaves to go to another firm. “What’s that? Nobody else worked as closely with that client?” Sounds like a firm that’s about to lose some business to me.
On the other hand, let’s say that the same client doesn’t just work with one part of the accounting firm but several. In doing so, the client gets to know and build relationships with many different Partners, Directors and Associates across multiple departments.
Now what happens when the Partner in the Tax department leaves the firm? Is the client going to go out the door with him? Perhaps, but we’ve made it certainly harder to do when it’s a bundle of services that the client has been receiving, assuming the level of service and expertise has been of a similarly high standard. The Partner is taking his tax expertise out the door with him – but he’s not going to be able to take a whole bundle of services out the door with him, is he?
Thus, building many relationships with your client leads to that client being hooked on your firm. Such a client is a client that’s firmly entrenched and loyal to your firm due to many different avenues in which they benefit from the services and expertise you provide.
When you sell them a variety of services, you often are giving them a variety of contacts too. This is not a bad thing if those contacts are building visibility, trust and rapport with the client, which has the benefit of making it more difficult and complex for them to leave your firm.
Building a firm means you want to make it as difficult as possible for any one person to hold you hostage by saying “This client is MINE and I’m taking them with me.”
#2: Don’t let billable hours negatively impact your level of service, teamwork, and judgment
Ah, the almighty billable hour. We know it well. I sometimes think you could even get away with murder as long as the act was billable. And the irony is that too often at Value Drivers, we’re seeing billable hours work against relationship building with the client across many levels of firms.
Let me explain: When you reward based solely on billable hours, people don’t necessarily feel the incentive to bring others – particularly more junior people – into the project. Why? Because in their minds, there’s risk in doing so under the compensation structure of how hours are billed and who gets credit for them. A senior person may be thinking, “If I bring on that person, he’s fairly green in this area of the client’s business and if I have to spend time cleaning up his work, that clean up time isn’t billable, or at best, it’s billable at a lower rate. Which is a conundrum because I get rewarded on how much I bill.”
Could the senior person use the help? Surely. Will the senior person be overloaded and stressed-0ut with work by hoarding it in the name of billable hours? Quite likely. But reducing billable hours or their value isn’t worth it to him. Even if bringing in others may ultimately be a very positive thing in the long run as far as more well-rounded service from the firm.
In our work, we sometimes see compensation structures that are much better at rewarding the overall performance of the firm rather than the individual. You would think partners would find this a challenge, but surprisingly, we haven’t found that to be the case. Instead, we find their firms acting more like their clients and treating their compensation and reward systems as non-negotiable policies and procedures that are based on a balanced set of a few measurable objectives. There is much less of an incentive to hoard client time under a particular individual’s domain and teamwork is encouraged – which, frankly, is in the best interests of the client and the firm. The way it’s supposed to be. Unless you just want to be building a job for yourself rather than a firm for the benefit of the partners, staff, and communities you serve.
Recognition of these opportunities may very well result in a great win-win:
More involved people internally (which should help employee engagement and retention) and a more diverse, stronger and dedicated team the client can see and appreciate (which should help client loyalty and retention).
Are Your Clients “Hooked” on You?
You’d love to think so. But the firm that assumes all is well without understanding their points of vulnerability could be making it all-too-easy for their client to move on when one key contact does the same.
Don’t fall into this trap and realize what you could’ve done to assess your client loyalty. Take the Change Your Paradigm client loyalty assessment from Value Drivers. In just 3 months, you’ll find a much stronger sense of how much money you’re leaving on the table for your competitors and the additional services your clients may secretly be wanting from you.
The whole assessment pays for itself once you strengthen an existing relationship with a new service or secure a new client. Prepare to Change Your Paradigm by contacting Value Drivers today at 312.827.2643.