In the competitive landscape of professional services, differentiating from the competition is a major challenge. One of the most effective ways to achieve genuine differentiation, is to provide a service experience that beats the industry standard by being tailored to the needs and wants of clients. In other words, the way a firm manages its client relationships and key accounts, is now the battleground for differentiation between leading professional firms.
But what does good Account Management look like today?
What is Account Management?
Strategy buzzwords can sometime be unhelpful unless they are defined. We offer the following definition of Account Management,
‘The process by which a professional firm gathers and analyses information about the past, current and future needs of the client and uses this to plan and deliver activities that enable a firm to build a mutually beneficial relationship with that client in the future.’
The business case for Account Management is clear.
In most mature markets, where firms are still experiencing a ‘slow return to growth’ environment, the highest fee revenues are coming from deeper development by firms of their existing client relationships. In other, more buoyant, regional markets, such as in Asia and many Latin American economies, the question is not where to find growth but how to achieve the right kind of growth i.e. high margin work, what you might call, the challenge of managing, ‘good’ growth.
In both these types of markets, analysis of professional firm revenues shows that many see the highest margin work coming from a firm’s ability to service the complex needs of corporate and institutional clients rather than individual clients or smaller businesses.
The implications of this for professional firms are profound. Advising business and institutional clients requires tighter teamwork on the part of the advising firm, more co-operation, freer information flows and better planning in Marketing and Business Development. All of these things are addressed in a firm’s Account Management approach.
The management of client relationships through a more structured approach to Account Management remains a ‘work in progress’ for many professional firms. Some do it well, some less so.
And that’s because rolling out a consistent Account Management approach can be challenging. So what are some of the points which a professional firm’s management team should keep in mind if they are considering strengthening or launching their firm’s Account Management approach?
Five aspects of Best Practice in Account Management for the Professional Firm
- Start with a pilot programme. For firms that don’t currently have an Account Management approach, or where it is ad hoc or unstructured, it is unrealistic to make big jumps. So don’t. Start small. Build some success. Then roll out your approach to the firm team by team. In that way, success breeds success. And any internal and external challenges that you encounter can be fixed before you take the programme firm-wide. Colleagues will see that it works and will want to buy-in when they see the benefits in terms of client’s appreciation and new revenues.
- Make time to discuss the relationship with the client. It is often too tempting for fee earners to focus exclusively on the project or matter currently in progress rather than to discuss the relationship they have with the client. Most of contact time with the clients is on ‘live’ projects. Effective Account Management requires time to be ‘carved out’ in a Consultant, Partner or Director\\\'s (and the client’s) schedule specifically to discuss how the relationship can be developed further. In that way, relationship leaders have an opportunity to explore aspects of the client’s issues and needs beyond the immediate.
- Develop some simple tools and guidance. No busy professional likes extra paperwork or bureaucracy but Account Management requires some basic tools, templates and principles. For example, an agreed format for Client Plans which sets out specific information required on clients and details the firm’s objectives for the relationship. A template drives a consistent approach across lines of business or service groups and the firm and ensures that professionals consider the right strategic issues for each relationship. Also useful are suggested agendas and guidance for professionals for Account Planning meetings with clients to ensure that the right topics are covered at each client meeting and across different clients.
- Train your teams to deliver Account Management. It may sound obvious, but not every professional advisor naturally has the skills to develop and manage client relationships. Many professionals see their main purpose as giving advice and not business development and revenue generation. So, establish a simple protocol to coach, mentor or support client-facing colleagues to do Account Management. Even minimal training given to key staff can have a dramatically positive impact.
- Consider the barriers which may hold your firm back? Successful Account Management particularly for corporate clients and institutional clients, will inevitably require colleagues to work together more, to communicate information more freely and to share client contacts. Establishing mutual trust between colleagues, creating commonly agreed ways or client service standards and having an approach that actively encourages, acknowledges and remunerates individuals for cooperating for the good of all, is a key component to Account Management.
The benefits of Account Management
A well-designed account management programme provides three principal benefits.
- It allows a firm to grow and capitalise on its existing relationships. Developing deeper knowledge of the client helps professionals to anticipate future needs of the client and so act proactively, becoming a strategic ally.
- It makes the relationship deeper and more valuable to the client and therefore valuable to the advisor. Clients will feel better serviced. Knowing the client better also makes it easier to detect cross-selling opportunities which help to increase revenue and maximise growth opportunities.
- It de-risks revenue streams and relationships. As important and better quality information is gathered through the Account Management process, the risk to the firm of losing key points of information through the departure of staff is reduced. Research among clients of advisors shows their frustration of the ‘churn’ of some advisors on their accounts. From the client’s perspective, knowing that their professional firm is managing them through a well-thought through and structured Account Management approach, inspires confidence and encourages a deeper investment in your team. All of this makes the cost and inconvenience to a client of changing advisors to one of your competitors, greater.
Next steps
If you are interested in starting a conversation with Silvia about Account Management or would like to hear our ideas about how to establish or improve your client relationships, why not contact her on svelasquez@gullandpadfield.com