Clients Worth Keeping
In our last blog, we asked for your ideas on a possible title and organization of Tenacity’s last and final book. We received some excellent and helpful ideas, all of which we appreciate. None were more on point than that offered by Dr. Mike Salvador of the Coles College of Business at Kennesaw State University. Mike has been a great friend, advocate and trusted mentor through the establishment of The Tenacity Center for Account Management and Client Retention at KSU.
Mike suggested that we add “(Worth Keeping)” to the working title – and so we intend it to be: “Never, Ever, Ever Lose a Client (Worth Keeping)”. This is a powerful endorsement of Tenacity’s Right Clients / Right Terms® principle. Simply stated, senior management has the responsibility to determine, communicate and stand firmly behind the specific criteria defining the potential clients with whom the firm is willing to do business – as well as the terms under which those contracts will be executed. Tenacity is adept at facilitating these sessions and the final criteria are often resolved after arduous, yet beneficial and much needed debate. (Still, clients seldom realize how much needed the debate was until after they’ve had it.)
Should senior management fail to fulfill this role, they risk making the (often disastrous) mistake of leaving the development of the firm’s most pivotal strategy to the sales organization. Unfortunately, given the typical nature of sales executives and their compensation schemes, they will often sell virtually anything they possibly can (and under any terms they can get away with) to get to “yes”. Sad, but true and it plots a roadmap for headaches, shrinking margins and high levels of attrition. You’ve heard us say it before, the two most important decisions a business ever makes are: 1) whom they choose to do business with, and 2) whom they hire.
Semantics matter in this principle. We’re talking about “right” clients, not necessarily “nice” clients. We also don’t believe in “bad” clients, only “wrong” clients. Importantly, once a client has entered the book of business, its status can change. They can become a “wrong” client (often through people changes within their Web of Influence®). Conversely, clients already in the portfolio, but that are outside of the established criteria, can be brought into compliance when terms are renegotiated, extended or renewed. The important new reality is that account managers and executives have a specific list of criteria that defines “right clients”, which they can and must negotiate toward. (It’s also amazing how much better negotiators they become when these parameters are defined.)
Finally, we support our clients in “firing” their clients that are outside the criteria and, despite their best efforts, appear likely to remain so. How liberating! Some clients are simply not worth keeping! In fact, we ask that they don’t even consider this a “loss”, but instead a strategic decision to prune the portfolio of clients that are not aligned with either their ability to provide value, or the overall goals of the company. By the way, if you want to see a client’s eyes get really big – initiate that conversation. (Don’t be completely surprised if they suddenly become a bit more receptive to their role in the partnership either.) Perhaps even you suddenly become a provider worth keeping. We’ve seen it happen.
So, thanks Mike! You know us better sometimes than we know ourselves and you’ve given us the opportunity, right on the cover of the book, to reinforce one of our most precious beliefs.
Steve and John