How not to win business: a guide for professionals
Our series continues: firms who prioritise winning new clients over keeping those they have, shouldn't be surprised if they do neither
No 10: Pursue the new, neglect the old
"Satisfied customer - must have him stuffed!" (Basil Fawlty, hotelier).
If you reflect at times on how hard it is to stand still, let alone make progress, you are in good company. But those who measure progress by new conquests, rather than how skilfully they keep clients loyal, make a great strategic mistake.
LBC Wise Counsel is the UK's leading consultancy to in-house legal teams. Over a three-year period to mid-2012, they helped them review 28 external law firm panels and create 15 new ones. In these 28 reviews, only three new firms were appointed. In all of them, at least one firm was dropped and, in 20 of them, two or more were dropped, even though their expertise was adequate, because the price, service or quality of relationship was not good enough. What does this show us?
First, most sales and marketing effort should always be poured into binding the clients we have with hoops of steel. Shiny new clients are great, and one should always be ambitious for them, but £1 of business from a new client is exponentially harder to win than £1 of extra business from a client already in our stable.
Secondly, incumbency is a tremendous advantage, provided we are delivering the right service and running the relationship well. The stats tell their own story: 43 reviews, only three new firms appointed. Thirdly, the common complaint "I can't afford to spend non-chargeable time with clients", is as smart as leaving all the doors and windows open, then complaining when burglars (aka "competitors") come calling while you are out.
Finally, good data is all. Do you know what clients value most in their law firms, their order of preference, and how you measure up? Gut instinct and anecdote are not enough. The best firms measure client satisfaction analytically, and respond thoughtfully to the insights. There are excellent tools available. Use the data they create to refine your service and to conduct a structured conversation at least once a year with key clients and connections. Encourage them to talk candidly about how they feel the relationship is going and how, together, you can improve it.
This kind of conversation can be a priceless source of intelligence and a great relationship builder - clients see clearly that you value them. It creates an ideal context to update clients about your firm and explore the potential for more work. You may be surprised how often you hear, "I didn't know you did that"; or "We use X at the moment, but if you'd like to give me a proposal…".
Explore the future too. Clients have two kinds of issue - afflictions and aspirations; you need a firm grasp of both.
I mentioned Basil Fawlty once, but I think I got away with it. He may be the man who put "hospital" into "hospitality" but, even so, we can appreciate hoteliers' insight that success depends much less on new arrivals, than on growing a roster of guests so consistently delighted that they return again and again.
Stephen Gold was the founder and senior partner of Golds Solicitors, which grew from a sole practice to UK leader in its sectors. He is now a consultant, non-exec and adviser to firms nationwide. e:email@example.com; t: 07968 484232; twitter: @thewordofgold