Is Client Loyalty an Oxymoron?
by Michael W. McLaughlin

Client loyalty is tougher to come by today than ever before.

When a group of clients was asked to rate loyalty to their professional service providers, 50% said they were indifferent; they would switch without hesitation. It's easy to blame this grim reality on fierce competition and bargain-hungry clients, but those are nothing more than red herrings.

The truth is, a client's interests can be well-served by establishing long-term partnerships with the right service providers. After all, it's easier to work with a known quantity than it is to hire someone new for every assignment. Not only is the client's cost of acquisition lower, but the cost of achieving anticipated benefits can also be lower with an incumbent service provider.

So why is client loyalty elusive for so many? It doesn't have to be. Any professional service provider can transform client indifference into loyalty by putting five strategies into action.

Put Away Your Golf Clubs

Many professionals try to create client loyalty using the wine-and-dine approach. Dinners, golf outings, and tickets to sporting events top the list. The personal relationships you develop this way are nice to have, but don't expect them to translate to business loyalty from the client.

In a study by analysts at Ross McManus, 1,200 senior executives gave their professional service providers a C+ grade for client satisfaction-just a bit above average. They complained that professional service providers performed poorly on the executive's top criteria for client satisfaction: Understanding the client's business.

The research also revealed that senior executives believed that the gap between what service providers think they know about a company and what they actually know had widened considerably.

It's axiomatic that a professional service provider learns as much as possible about a client before, during, and after an assignment. Most professionals aim for that goal. But clients aren't seeing the results of this effort and they are disgruntled. Overcoming this bogey will take more than a few rounds of golf.

To create a loyal client, become as valuable to the client as a top performing executive. That starts by developing a holistic - not superficial - understanding of the client's business.

You have to know much more than the gist of each client's strategy. Immerse yourself and your team in the high-priority issues facing all of the client's executives. Don't just focus on those you're already working on. Broaden and deepen your understanding.

This depth of knowledge serves two purposes. First, your work will be more relevant and, second, a holistic view of the business will uncover opportunities your competitors will miss completely.

Deliver Flawless Results

Clients hire consultants for one reason: results. The prerequisite for long-term client relationships is flawless delivery of every benefit and value you promise. That is the key to client respect, trust and loyalty.

At a minimum, flawless delivery means that you start and end every project on time, respect the budget, and avoid surprises through careful, collaborative planning with the client. It also means you do whatever it takes to make sure that project results add to the success of your client's business.

And keep in mind that producing results is not just about achievements at the end of a project. You can build client loyalty one brick at a time with each day's incremental accomplishments.

Mediocre or even satisfactory performance won't earn and doesn't deserve clients' respect. Every aspect of your work must reflect what Tom Peters calls "towering competence." Anything less will leave you vulnerable.

As you accumulate a track record of flawless work, you build trust with clients that will lead to client loyalty. You'll find your clients are willing to take a leap of faith and entertain new proposals. And the good news about your work will travel quickly.

Let Clients Buy

In the current market, clients don't want to be "sold" - they want to buy. Clients expect that their professional service providers will try to sell additional services to them. But clients are not a testing ground for every service offering your firm has on the shelf.

Bring new ideas to your clients only when you're confident that the value-to-fee ratio works for the client. Don't waste time figuring out how to sell to clients; instead, show how your ideas fill pressing needs. If clients want to buy, they'll take your ideas to the next stage.

Present solutions to front-burner problems, not nice-to-haves. If you've done your homework on the client's business, you'll know the difference. Demonstrate your honest concern for the client's business by focusing on the dilemmas at the top of your client's list, not those on the bottom.

Clients often buy services without any sense of loyalty. If you want to earn their trust, clients must believe you will always act in the best interest of their businesses.

What's the Plan?

Understanding the client's business and first-rate work are essential for creating a loyal clientele. But there's more. You must also develop a proactive, client-specific plan that articulates how you will hold onto your profitable clients. Without a plan, you'll drift from project to project, relying on luck.

Your plan should describe your purpose with each client, how you will achieve it, the specific people you must meet, what you must learn about the client, and how you will differentiate your firm. Outline the tactics you'll use and how much time, money, and effort you will expend.

Share the plan with your team, making sure that all team members understand their roles. And don't neglect the client. Show your client how you propose to help in the future, including the benefits they can expect. Soliciting feedback demonstrates your commitment to the client and often results in important changes to your strategy.

Keep your client marketing plan simple, flexible, and based on client needs, not what your firm has to sell. You must serve clients in meaningful ways, focusing on helping clients first and selling second.

What's most important, though, is to work the plan. It's easy to get caught up in the client's day-to-day demands and let your client marketing activities fall to the bottom of your to-do list. But that will leave you with fewer opportunities for new work once your current engagement wraps up.

Set aside time every day to work your plan, regardless of what other fires are raging. Set a goal, such as completing three activities each week. Through consistent action, you will slowly, but surely, create a loyal client.

Assume Nothing

No matter how good you are, never assume you've got a loyal client. Complacency is the enemy of loyalty. A client's trust and loyalty can be swept away if a professional gets cocky or lets performance slip, even on one assignment.

Because clients expect progressively valuable work from incumbent service providers, creating a loyal client can seem more difficult than marketing to a new one. In effect, your own flawless delivery raises the bar for subsequent work. But, your odds of winning profitable work, at a lower cost of sales, are better with loyal clients than new ones.

Clients will always surprise you, so be patient and understand the realities they face. Don't throw in the towel when things don't go your way or you think clients don't show enough or appropriate appreciation for you.

Creating a loyal client is not a predictable, linear process. Instead, it's one that has growth spurts, plateaus, and setbacks. But as long as you don't give up, client loyalty doesn't have to be an oxymoron.


Michael W. McLaughlin is the coauthor, with Jay Conrad Levinson, of Guerrilla Marketing for Consultants. Michael is a principal with Deloitte Consulting LLP, and the editor of Management Consulting News and The Guerrilla Consultant. Find out more at www.guerrillaconsulting.com and www.managementconsultingnews.com .

Many more articles in Sales & Marketing in The CEO Refresher Archives

   


Copyright 2005 by Michael W. McLaughlin. All rights reserved.

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