Wednesday, August 18, 2010

Choosing the Right Clients

Clients go to considerable lengths to select the right A/E firms for their needs. Should we not do the same in choosing which clients to work for?

Unfortunately, many A/E firms give little attention to client selection, focusing instead on which projects to pursue (and many firms exercise little discernment in choosing project pursuits as well). One might argue that you can't be too choosy in a highly competitive marketplace. But if you agree that great client relationships are highly valued, why leave finding them to chance?

Years ago consultant David Maister conducted an informal poll among professional service providers around the world. He asked them what proportion of their clients they liked and enjoyed working with. Only 30-35% of clients fell into this category. Similarly, the professionals he talked to said that only about a quarter of their work would qualify as something they loved doing.

What would the numbers be for your firm? And if they're similar, how might that affect your firm's performance? Maister observed that spending most time on "tolerable stuff for acceptable clients" sucks a lot of energy out of a firm. Imagine if those proportions were significantly increased. Among the many business benefits of having great client relationships, don't discount the impact of your people enjoying their work more.

So where to start? In my last post, I suggested four stages of relationship development: (1) screening for relationships, (2) initiating relationships in the sales process, (3) building relationships after contract award, and (4) maintaining ongoing relationships. Today I turn our attention to the first stage, the one that gets the least attention but sets the pace for the subsequent stages.

All firms do a certain amount of prospecting or lead finding. A lead is typically "qualified" (i.e., determined to be worth pursuing) when you confirm that a proposed project is for real and it's something your firm is interested in and capable of doing. The qualities of the client usually aren't given much attention at this point, other than perhaps assessing the size of their budget.

But why not include the desirability of the client in your qualification of the lead? Or the relationship potential of that client? If you do sales right, there is a substantial investment involved in building a relationship before contract award. Screening for compatibility at lead qualification is prudent in deciding how to allocate limited time and money across your active sales opportunities.

What relationship screening criteria should you use? A few suggestions:

Availability. Is there an incumbent? What are the chances of displacing that firm? Or is there room for another firm like yours?

How many firms like yours has the client used in recent years? Is there a high turnover rate? Is the client committed to spreading the work around?

How easy is it to meet with the client? To identify and gain access to the various decision makers? Are they reasonably open in sharing information with you? Are they known as a hands-on or hands-off client (there are advantages to both)?

How much money does the client spend on the kind of work you do? What is the funding picture for the foreseeable future? Growing or declining? What are the prospects for their own business?

Trust. (This is what anchors a good client relationship.) Does the client have a reputation for being trustworthy? Do they treat their service providers with respect? Are they good payers? Do they have reasonable expectations?

Values. Does the client conduct their business in a manner consistent with your firm's values?

Chemistry. Do these seem like good people to work with? What are your initial impressions? What have you heard from other providers and suppliers?

Of course, in the prospecting stage you likely won't be able to answer all of these questions. But answer what you can, hopefully to the extent that you can make an informed decision of whether to proceed to the relationship initiation stage. A conversation or two with the client is usually needed to qualify a lead properly. You should also rely on your network to learn all you can about a prospective client.

If you want more great client relationships, you need to work at it. That starts with looking for clients that have promising relationship potential. That's not to suggest that you avoid all project leads where prospects for a good relationship are in doubt. But don't underestimate the value of relationships in selecting which opportunities to pursue. There's only so much time available; spend it well.

No comments:

Post a Comment