“It’s great to learn, ’cause knowledge is power.”
The purpose of this article is to answer the question, “What’s the one thing you should do to keep your clients loyal?” In well-established research, such as The Service Profit Chain1 and How Clients Buy2, we learn that the more value you deliver, the more satisfied your clients will be. The more satisfied they are, the more likely they will be to stay loyal to your firm and refer other clients to you. Makes sense, but this isn’t the whole story.
At the Wellesley Hills Group, we recently conducted research for a client on how often their past clients wish to be contacted by their firm.
An actual conversation with one of his past clients went something like this:
John Doerr: "I am calling for Smith & Jones. Bill Smith did some work for you in the past and I am looking to find out the best ways for him to keep in touch with you."
Client of Our Client: "How is Bill? I remember the work he did for us. His approach was so unlike anything we usually get. He was thoughtful, asked great questions, and actually changed what we were looking for. In the end, his suggestions made a huge difference for us. Very valuable."
John Doerr: "Bill is doing great."
Client of Our Client: "Good to hear that. You know, I had forgotten about how good his work was. Too bad you didn't call last week. I just awarded a major assignment that was right up Bill's alley. I’m so busy right now. I have trouble remembering things from last week, let alone last year. The engagement came up, and I called the company who I met with most recently. They were in two weeks ago. Too bad for both of us, Bill probably would have been a top choice. Tell him to give me a call soon."
The client of our client got plenty of value and was highly satisfied…but not loyal. Perhaps one of the worst messages a professional can hear is that a client of theirs had need, had money, and awarded a deal to someone else for any reason. The reason in this situation was that our client fell off of the radar screen of his client, and thus he lost the deal.
If you want to keep your clients loyal, you need the answers to nine questions—some focused on your clients’ perception of your value and some focused on your clients’ perception of your differentiation.
Five questions focused on value:
Question #1: What value do clients perceive regarding our general category of company and services?
Perhaps your clients value that you are a diversified marketing company, not just a website firm. Or, that you’re not just an accounting firm, you’re a consulting firm as well. Or, that you are a specialist in XYZ, not a generalist. Perhaps they value that you are a family business versus a corporation. How they perceive your type and category of company will resonate with many buyers.
Question #2: What is the value clients perceive regarding us as a firm?
You might find that clients value your innovation and don’t care as much that you’re periodically unresponsive. Or, that they value your client service excellence, but your technical reputation doesn’t matter quite as much. Maybe there are areas they don’t value or where you are falling down in your delivery. (Good to know because if you want to keep clients loyal, you’ll have to do something about it.)
Question #3: What value do clients perceive regarding the specific services we offer?
Armed with this knowledge, you will know what’s working for clients, which services you offer that are the strongest, and where you deliver the best value. You might also learn that your clients don’t even know you offer particular services. When we ask this question in our client research, we often find the client wants to know more and is “Surprised I haven’t been with them all these years in that area as well.” Powerful stuff that not only gets you more work, it keeps competitors at bay.
Question #4: What value do clients perceive in solving the specific problems they currently have?
We all have problems, but not all problems are created equally. Perhaps in a collection of 20 problem areas a company has, only three of them are to-do list worthy. If you know the problems and issues—and which are most important—you can help the client tackle them. In our initial story, our client didn’t even know about the particular challenge that caused the buyer to hire someone else. If he did, he likely would have won the work.
Question #5: What value do clients perceive they might get if they could solve certain problems or accomplish certain things that they aren’t focusing on right now or might not see as priorities?
The best service providers help their clients make a better future—a future they may not have even known was possible. By helping clients solve problems they didn’t know they could solve, and making improvements they didn’t know they could make, service providers score higher on satisfaction (that, as we mentioned, is an indicator of future loyalty). They get the off-the-charts, surprise-and-delight, would-never-use-anyone-else effect.
Four questions focused on differentiation:
Question #6: What different options do clients perceive they have regarding different categories of companies that can help solve problems or achieve goals?
Sometimes it doesn’t matter as much which specific companies your client might view as other options. It’s important to know the types and categories of companies offering services in your area. Perhaps you’re a management training company, with a core set of services in classroom training. You need to know if your buyers are considering e-learning providers—and how to position yourself against them as a competitor category—or you may find yourself losing business.
Question #7: What different options do clients perceive they have regarding specific companies that can help them solve problems?
Suffice it to say, if you’ve got competitors, you need to know your distinctions, advantages, and disadvantages when compared with them. If another firm can entice your clients with their siren song, and you don’t have a compelling
response, loyalty can suffer.
Question #8: What different options do clients perceive they have regarding specific services available to help them solve problems?
There are lots of ways to skin a cat3, and competitor companies are working all the time to create new and innovative services to solve problems. Whether or not they’re new and innovative may be up for debate, but it doesn’t matter. If
your clients perceive them to be new, innovative, and valuable—you need to prepare for comparison. Of course, you could get ahead of the curve and offer your own new and innovative services, and leave it to your competitors to scramble to keep up.
Question #9: What different options do clients perceive they have regarding other ways to solve problems, such as internal staff?
You may need to position your services against internal delivery by client staff as strongly as you do competitors. Now take care, it’s a dangerous game setting up to compete with the client. Do that at your own risk. For most, focusing on the delivery of the best value possible is the best way to keep work headed your way versus being in-sourced. Then again, perhaps it’s a natural evolution to move the work internally. If so, help the client get the most out of that process, as you can win client business here as well. (Think technology transfer services.)
It’s tempting to try to come up with a silver bullet answer to keeping your clients loyal. Folks like business author and strategist Fred Reichheld have advanced the idea that there’s a correlation between how strongly someone would be willing to recommend you and how likely they are to be loyal. Great research, but I think you need to know more than that, like who recommends you for which services, for what reasons, and against which other available options. Armed with the answers to these questions, you’ll have all the ammunition you need to keep your clients loyal.
About the Author:
Mike Schultz is Co-President of Wellesley Hills Group, a management consulting, marketing, and lead generation firm focused on helping professional services firms grow. He is also author of Professional Services Marketing (Wiley, 2009) and Publisher of RainToday.com, the premier online source for insight, advice, and tools for service business rainmakers, marketers, and leaders.
1 Heskett, James L., Thomas O. Jones, Gary Loveman, W. Earl Sasser, Leonard A. Schlesinger, "Putting the Service-Profit Chain to Work,” Harvard Business Review, Vol. 72, No. 2 March - April 1994, pp. 164-174.
2 Schultz, Mike, Doerr, John, How Clients Buy: Benchmark Report on Marketing and Selling Professional Services from the Client Perspective. RainToday.com. 2009.
3 No cats were harmed in the writing of this article. We love cats, skin and all.