In this article, I’m going to take a little deeper dive into one strategy associated with Leadership Domain #4 – Client Leadership. You’ll remember from the 7 Leadership Domains Essay (get a copy here) that I mentioned four strategies associated with Client Leadership.
4.1 Find your Blue Ocean
4.2 Plan your key messages – USP and Offer
4.3 Plan your revenue and profit increase using The Profit Multiplier
4.4 Build a Brick Wall around your A-Grade clients
All four are very powerful strategies to lead your business growth. In particular, I tossed up between The Profit Multiplier and the Brick Wall strategies.
I’ve settled on the Brick Wall. Here’s why…
In my engagements as a Business Coach, I’ve noticed that strategies to secure new business seem to get all the attention. Granted, a killer advertising campaign that gets the phone ringing is a captivating concept for every business owner. However, a killer advertising strategy without a customer retention and ascension strategy can be like trying to carry water in a bucket that has 20 holes in the bottom of it. My observations are that client retention and ascension strategies don’t receive anywhere near the attention or resources that new business acquisition strategies do.
This is a lost opportunity. It costs more to win a new client and get them to buy for the first time than it does to get an existing client to come back and buy more often.
The Brick Wall Strategy is about building a brick wall around your customers. The brick wall is impervious to competitor attacks. And the environment inside the Brick Wall is so good, that your clients don’t want to leave. Loyal, happy, repeat purchasing clients is the most profitable strategy of all.
Like any brick wall and brick wall around your clients is built brick-by-brick (or action by action). The result is a strong relationship based on trust and mutual benefit.
After years of delivering sales training and talking with sales and business development executives, I’ve lost count of the number of times salespeople say, “our clients are already buying everything off us, there’s no room to grow the client accounts”. That is most often said by salespeople who assume the role of Professional Visitor, not Client Leader.
Building a Brick Wall around the client is more than the corporate niceties – gifts, lunches, corporate box seats – though these sure do help. If you are going to put a Brick Wall around your client, then you need to become central to that company achieving its goal.
A Client Leader is able to communicate with clients in a way that uncovers their key goals and strategic initiatives of the client organisation. From there the Client Leader is able to develop a supply and service strategy that will best help the client achieve their goal.
This is ‘different’. It is a difference that is directed by the client. It’s the best kind of different you can get!
A client leader has a development plan for each of their key clients. One page is enough for this. It should state the potential spend of the client, the share of that spend realised so far and a goal for the share of spend at the end of the quarter. The plan should look at the status of the relationship now and where it needs to progress to in the short and medium-term. The plan should note the key goals and strategic issue for the client and how the client leader can support the client in achieving their goals using the products/services.
The client development plan should also not all of the key decision-makers and influencers in the client organisation. A plan of connecting with each of these people is required.
Depending on the size of the client base, it could be impractical to do this level of planning with every customer. However, the current top customers by revenue and the top by potential revenue all need to have this level of planning done.
I’ve seen this strategy yield significant increases in revenue from existing clients. One case is a building products manufacturer. Over a six-month period, a number of their salespeople were able to become Client Leaders. This led to a number of their clients, choosing to move away from having three suppliers and giving 100% of their orders to the client leader’s company.
Why did this happen?
Previously, these clients were ‘hedging their bets’ and keeping three suppliers ‘on the hook’.
Simply because they weren’t getting 100% of their needs met by any of the three suppliers. Therefore, they weren’t going to ‘lock-in’ with any one supplier, in case they were let down. Their focus was on risk mitigation.
This was until the client leaders in this story began to take the lead and find out the clients goals, (and the client’s client’s goals), specific procedural requirement, regulatory and compliance requirements, specific challenges being faced by the decision-maker, and so on.
The clients didn’t open up immediately. It took a few months for them to start to come round. After that initial time, more and more information flowed. This gave the Client Leader’s the ultimate competitive advantage – they knew exactly what the client wanted.
For this company, The Brick Wall strategy led to a number of clients bringing 100% of their orders over. This represented a significant revenue increase. The strategy was also very profitable. There literally was no advertising outlay and no additional cost. Just a more strategic way of communicating with clients.
I encourage you to run some numbers on this for your own business. What if you could get a 20-30% increase in spending from your top 20-30 clients? What if you could do that with zero advertising cost, utilising existing resources in your business?
No doubt it would mean revenue increase, profit increase and happiness increase for you!
Don’t delay, start now!
Best of luck.
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