Behind every great rainmaker, mover and shaker and leader are great relationships. In fact, replace great with superior. People who make things happen make superior relationships first.
People who sell don’t develop nearly as much business as people who develop relationships. New business flows to those individuals and companies who can move beyond a transaction to a relationship. People, especially executives, don’t want to work with the person with the best sales skills. People want to work with those who are emotionally invested in helping them and will pay significant premiums for this rare commodity.
Client Investment Drives Success
Let’s start with our end goal: grow better—and more profitable—client relationships. (If your goals don’t involve growth and/or profitability, you can stop reading here. Good luck on your business venture.)
In order to achieve this goal, we need more clients giving us more money. Put another way, we need clients who are invested in us. Invested clients spend the biggest portion of their hard-earned money with you. Invested clients will also willingly recommend you to their peers without you ever asking for a reference.
Satisfied clients are not necessarily invested clients. How can you tell the difference between a satisfied client and an invested client? Easy—their behavior.
Truly invested clients—the clients with whom you have the absolute best relationships—exhibit 2 key behaviors (which also happen to be measurable and objective assessments):
- Out of all the providers a client uses for a particular service, they spend the most money with you—usually 2 to 5 times more than anyone else
- You are the first provider a client recommends—in an unprompted manner—to their peers
When both of these statements ring true with a single client, you have reached the ideal state of the client relationship…you are in Clientopia®. This is the strongest relationship you can possibly have. Clientopia relationships trump satisfied clients—invested clients have a stake in your success—satisfied clients don’t.
Think of a Clientopia relationship as having 3 key components:
Component 1: Earning the Client’s Financial Investment
A typical company relies on 42 law firms for their legal needs. However, on average only 2 firms are considered primary.
Does being primary matter? Only if you are looking to make money and grow.
A single primary provider typically captures 25% to 40% of a client’s budget; letting the other 41 providers fight it out for the rest.
When you are a primary provider—and in particular the first primary provider a client turns to—clients are making a financial investment in your organization. You have the best access to clients and their premium work.
Component 2: Earning the Client’s Emotional Investment
Recommendations are one of the leading indicators of future growth potential for a service provider. Fully 57% of C-level executives will hire a new service provider based on a single, unprompted recommendation from a peer. A staggering insight into the power of recommendations—correction: unprompted recommendations.
Unprompted, unaided recommendations mean you earned this recommendation on your own merit. No one asked about you by name or included you as part of a list.
It’s the difference between:
“How did you like eating at Restaurant ABC?” (Prompted)
And:
“What’s your favorite restaurant?” (Unprompted)
When you are the first service provider a client recommends—unprompted—you have earned the client’s emotional investment. They are willing to stick their neck out for you; giving you access to new work opportunities.
Component 3: Make Lots of Money for a Long Time (Reaching Clientopia)
The key to Clientopia’s kingdom demands you bring both of these components together to achieve the ideal relationship. In Clientopia, you have earned your client’s financial and emotional investment.
Being in a state of Clientopia provides a number of significant advantages (more on those in a later post), but let’s get the financials out of the way. Providers with best-in-class levels of Clientopia enjoy:
- 19.5% rate premiums
- 35.6% faster revenue growth
- 33.1% higher client retention
The good and the bad news: only 40.1% of clients see themselves in a state of Clientopia. And these 40.1% of clients are in Clientopia with only 20.6% of the law firms serving large clients. This is disproportionately as important to every law firm as profits. The law firms in Clientopia will gain share organically as other law firms let their relationships slip away.
BTI will release the client rankings of law firm relationships next week in our brand new BTI Power Rankings 2016: The Law Firms with the Best Client Relationships. The report ranks law firms on the strength of their client relationships—both overall and for 16 industries. Subscribe now to ensure you don’t miss a beat and stay tuned for the rankings—including the 24 law firms with the absolute best client relationships.
MBR