Practice Management – How healthy is your client-management

This is the single most striking conclusion derived from information provided by The PACE key client healthcheck. The 40-point questionnaire addressing ten core aspects of key client management was sent to managing partners and heads of marketing in one hundred and fifty of the largest professional firms in the UK during December 2000. Some 42 firms responded including 13 accountancy firms.

While it is critical that every client receives an excellent ‘base’ level of service, key clients should receive additional levels of service excellence.

The value of these clients to the firm, whether measured in fee income, profitability or prestige value, dictates that the firm should put more effort and resources into retaining and developing the business of key clients.

By and large, accountants are content that their firms provide an excellent ‘base’ level of service to all clients, have taken conscious decisions as to which clients should be more heavily focused upon and have developed an understanding of what these clients want from their advisers.

The message of ‘key clients first’ will only flourish successfully if this value is not in conflict with other values held by a firm. Accountants are convinced that this message is so well embedded that they have an articulated ideology that makes the client the focus of all they do and they have identified and captured the values that they expect the people within their firms to demonstrate.

Accountancy firms recognise that: the successful management of key client relationships is fundamental to the achievement of their chosen strategy; the focus on building strong relationships is championed by people who lead accountancy firms; and people at all levels within accountancy firms ‘buy in’ to the concept of proactive key client management.

Therefore the motivation to focus effort and energy on consciously selected key clients appears to exist – and firms believe their values support this client focus. Also the accountants’ perception is that all clients are well looked after – but that they have a special understanding of the needs of key clients.

But firms do have weaknesses in this area. Seamless delivery of excellent key client relationship management can be likened to the smoothly sweeping hands of a precision-made Swiss watch.

We know the accurate movement of the hands is only delivered through the intricate micro-engineering that sits behind the watch face. Most of us care not about how the watch mechanics work. We wish to see the super-smooth hands moving across the face and to know the time displayed is super accurate.

It is obvious that if the watch’s mechanical components are substandard, or if they are not synchronised precisely, the watch will fail. The same principle applies to key client management. Clients only experience seamless and excellent service if the processes and planning underpinning this service are of high quality and are well synchronised.

Accountants responding to the key client healthcheck say their firms do not measure up so well on the ‘cogs and springs’ criteria. Most key clients are large and complex organisations, requiring the delivery of many services. This means numerous people from the firm are often involved in shaping the client’s experience and in contributing to the management of the relationship.

The nature of key clients usually demands a team approach to the management of the relationship and the delivery of the service experience. To work synchronously requires that the whole team has access to information. Everyone needs to know what is happening. And finally, if a firm decides it should invest extra time, effort, resources and money to develop a special relationship it should be able to measure its success in this venture – from the client’s perspective.

Accountancy respondents perceived that they are weak in managing internal teams that are supposed to work together to plan and execute the function of relationship management. If the internal processes are weak, delivery can never match the intention, or, more importantly, the promise.

The weakest point in the whole healthcheck related to the management of internal meetings focused on reviewing and planning the approach to key clients. These were not seen to be structured or productive and participants appear to have received little training in meeting skills or protocols.

Anyone responsible for managing the relationship with a complex key client needs real-time information as to what is happening between the client and the firm – across departments, disciplines and potentially, international borders. While a few years ago this would be a pipe dream, today technology makes this a reality.

Accountants hold a low opinion of their technological support. Firms suffer from having multiple (and possibly conflicting) databases. Client database information does not integrate well with information on other systems and accountants don’t believe their database provides an accurate and comprehensive view of the historic client / firm relationship.

Accountants rated themselves more highly than their counterparts in other professional services firms in nine out of the ten core aspects of key client management. But their perception of their use of technology as an enabler of effective key client management was a notable exception.

Perhaps accountants’ understanding of the art of the possible in this aspect is better developed than their legal, consulting engineering and chartered surveying co-professionals. This heightened understanding of management systems may have led to this critical evaluation of supporting technology.

One of the statements respondents rated their firms against was: ‘We have objective and measurable ways of knowing the strength of the relationship we have with each of our key clients’. Out of the 40 statements this one received the fourth lowest overall score from accountants. It is perhaps surprising that a profession that is steeped in the processes of accurate measurement believes that it has a weakness in objectively measuring the strength of the relationship it possesses with its most important clients.

The results emerging of the PACE key client healthcheck suggest accountancy firms perform most strongly in the conceptual, early stages of managing key client relationships. If a firm has the motivation to get close to its most important clients and believes this is in accord with the fundamental beliefs and values of the firm, then strong foundations are in place. However, the foundations have to be built upon.

The detailed nuts and bolts that turn intention into experience have to be delivered. Real ongoing, accurate measurement of the relationship has to be put in place.

This gives the basis for targeted plans that will take the relationship forward.

Equally real investment in (and commitment to) information systems that will aid in the process of key client management have to be made. Finally, those involved in managing and working with key clients must turn their theoretical and conceptual acceptance of teamworking into day-to-day reality and practice. Intentions and beliefs are not enough. Clients evaluate on delivery.

– The Benchmarking Report is derived from information provided by the December 2000 PACE key client management healthcheck, published in March 2001. The report is free to firms that participated in the exercise and is available for #200 to non-contributors. Contact The PACE Partnership on 01932 260062.

HEALTHCHECK SAMPLE QUESTIONS Finding the motivation All the people in our firm feel they own the process of managing our key clients. Key client management initiatives are not just imposed by those who run the firm. We have real buy-in.

Meeting client expectations We always deliver everything to our clients on, or before, time.

Cross-selling to clients When our professional staff attempt to cross-sell another of our firm’s capabilities, they are able to give the client the specific benefits of this collaboration from the client’s perspective.

Key client planning We have objective and measurable ways of knowing the strength of the relationship we have with each of our key clients.

Using supporting technology Our client database integrates with all of our other information systems.

Managing key client relationships Meetings to discuss key clients are well structured and productive. People attending these meetings have received specific training in meeting skills and protocols.

– The healthcheck can be completed free of charge by any large or medium-sized firm and a copy is available on request on 01932 260062. (c) Copyright The PACE Partnership 2001.

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