Client Relationship Management (CRM) is the current holy grail of business development. Basically, it’s an approach to building your business through devoting resource to improving the quality of your relationships with existing clients in order to both increase the amount of business they do with you and prevent them defecting elsewhere.
Underlining CRM is the fundamental principle that it costs between five and ten times as much to win new business from new clients as it does from existing clients. Recent research has even shown that there is a 20-40% chance of winning back business from ex-clients – so, compared to the probability of successfully courting new prospects, CRM makes undeniable sense.
Whole libraries of learned tomes have been written about it, but as a busy, beleaguered professional with neither the time nor the inclination to read them, there’s a lot you can pick up just by skimming through the following A-Z:
A = Action. The keystone of CRM. More specifically, it means taking a proactive, rather than a reactive approach to your clients – anticipating their needs and managing your relationships with them to achieve the results you want.
B = Bottom line. The motivation for why you’re doing it. CRM programmes generate increased profits – effort does produce measurable return.
C = Continuity. A client is still a client even when you’re not currently working with them, so make sure you keep them by maintaining regular contact. C is also for communication – the lifeblood of effective relationships. Communicate to your client that you’re interested in them by taking time to talk to them generally about their business. Communication about your client, through talking to colleagues and comparing notes will also keep you ahead of the game.
D = Delight. To ensure a loyal client, you have to aim to not just satisfy, but to truly delight them. The dictionary definition is “intense pleasure” - keep it in mind next time you think “that’ll do”. Delight really isn’t difficult to achieve – take an interest in your client’s business (see above), make an effort every now and again to send them something they’ll really appreciate - concert or football tickets, flowers, even a birthday card – and of course, always make sure you do an excellent job!
E = Enthusiasm and Energy. Nothing’s more infectious than enthusiasm. Some of the most successful people around achieve their results through a combination of overwhelming enthusiasm for what they do, combined with a “never give up” energetic approach.
F = Focus. One of the most important rules in business development is “don’t try to be all things to all men”. Focus on your key strengths and competitive advantages in relation to your key client relationships, and concentrate on building them up. If you don’t, you’re in danger of dissipating your efforts by trying to do too much.
G = Goals. Set goals for yourself in developing each of your most important client relationships (generally those from which you get the most income) and plot your plan of action from one stage to the next. Get to know your client’s goals, too. What are they trying to achieve in their business – how can you help them?
H = Hot-housing. If your firm has contacts with several different people in a client company you can dramatically increase opportunities for increased business by getting a whole team working on developing the relationship. Hot-housing also means identifying your most valuable clients (see Pareto Principle, below) and making sure they get the type of five-star treatment they deserve.
I = Innovation. Making an impression through doing something different is a greatly under-valued marketing tool. Demonstrating innovation in one area, whether publicity materials, hospitality events, or your approach to transactions, bodes well for your creativity in other areas and helps you stand out from the crowd.
J = Joint initiatives. Make the effort to get to know your client’s other advisers – lawyers, accountants, financial advisers, etc. Being part of your client’s “advisory team” will help strengthen your position, as well as generating referrals from the other advisers.
K = Knowledge management. Many opportunities for increased business are lost through poor knowledge management. Take steps to coordinate the knowledge you have about your client throughout the firm, keep it in a form that can be readily accessed and understood, cross-reference it to other client or adviser files and update and review it regularly.
L = Lighten up. Part of the process of “delighting” your client (see above) involves treating them like a valued friend or colleague, rather than just a source of income, so make sure you take time to share a joke and chat about their business and their family.
M = Monitoring and measurement. Look for the positive measurable outcomes in what you do for your client and make sure you point them out. Don’t leave it for the client to figure it out for themselves – they probably won’t!
N= Negativity. Avoid it at all costs. Ban all thoughts along the lines of “This client wouldn’t…”, “We can’t…”, “It’ll never…”. Take a positive approach and give it a go even if it’s a long-shot. Even if it doesn’t come off, your client will appreciate your efforts in going the extra mile.
O = Opportunity. The real point of CRM. Getting closer to clients, getting to know their wants, needs, goals and desires makes you much better placed to spot opportunities and benefit from them. But this only pays if you DO SOMETHING ABOUT THEM. Many firms waste huge amounts of resource on trying to win new clients while ignoring the valuable opportunities already staring them in the face.
P = Pareto Principle. The time-honoured rule that says in most businesses, roughly speaking, 80% of business comes from 20% of clients. Therefore it makes sense to devote 80% of your business development efforts to your relationship with those clients (hence the importance of CRM). P is also for Partnership which is the nature of the relationship you should be aiming to achieve with your most valued clients.
Q = Quality. The one word that should underpin everything you do. Of course, sometimes the client is willing to sacrifice quality for price, but if so, make sure you’ve had that conversation with them so they know exactly what to expect.
R = Research. Research your markets and competitors and also keep a watching brief on what’s happening in the markets in which your clients operate. Also make sure you know where your business actually comes from – sources of referral, response to advertisements, etc.
S = Selling. A dirty word for many professionals, who prefer a reactive approach to client needs. But clients won’t buy from you if they don’t know what you’ve got on offer, so make sure they’re fully aware of your service range and more important, the benefits of buying from you.
T = Trust. The key factor in successful client relationships and the main area of concern for clients when considering taking on new advisers. T is also for Time Management which, experience shows, is what you will need to practice in order to make time for effective CRM.
U = Understanding. Taking time to truly understand your clients’ needs can put you streets ahead of the competition by enabling you to tailor your services to most efficiently and effectively meeting those needs.
V = Value. Research has shown that fee levels aren’t as important to clients as the level of value they feel they get out of the relationship. So rather than aiming to be the cheapest, concentrate on being the best (see all of the above!)
W = Wasters. These are your problem clients, the ones who are poor payers and for whom nothing is ever good enough. Bite the bullet, ditch them and free up more time and resource for those clients you really like, need and want.
X = Exceptional. Aim to make the exceptional the norm in your dealings with clients.
Y = You. Don’t just sit there, do something! Make sure you take responsibility for developing your client relationships – its you who will benefit.
Zzzzzz. Okay, effective CRM is tiring – but compared to other forms of marketing, at least you can sleep easy knowing that what you’re doing will produce results!
© Dianne Bown-Wilson, the M3 Consultancy www.m3consultancy.co.uk