What You Can Learn from the Airlines

rom the time you book an airline flight until that plane lands, your pecking order in the airline’s customer hierarchy determines your travel experience. To the airlines, all customers are not equal—they are segmented and managed according to profitability, loyalty, and frequency of travel.

Like the airlines, professional service providers have embraced the concept of client relationship management, yet many struggle with execution. Client relationship management is based on the premise that a subset of your clients will purchase the majority of your services, and that you should manage them accordingly. All clients are important, but some take more of your attention than others.

In an interview in Management Consulting News, Jack Trout, coauthor of Positioning, says that many consultants have a misguided client relationship strategy, which “…is simply to stay on at their clients, no matter what problem needs to be solved. “ Hanging on, hoping for more work from your current clients is not so much a strategy as the lack of a coherent one.

A client relationship strategy that differentiates your clients can reduce your cost of sales, simplify your approach to complex relationships, help you deliver services to clients more efficiently, and increase the profitability of your practice.

More Eggs in Fewer Baskets

At the core of a productive client relationship strategy is a shift in mindset. Consultants are often too willing to chase every new opportunity, when instead they should focus on the clients they’ve got and the referrals that can flow from those clients.

Just as with an investment portfolio, though, spread your marketing resources among selected clients—don’t focus on a single one. Otherwise, you risk the consequences: If the work dries up, your cash flow slows to a trickle.

Is It Right for You?

The first step is to decide if a client relationship program is right for your practice. For larger firms with long client lists, the decision is a no-brainer. Those firms should use a program to focus investments and people on targeted industries and clients.

In smaller firms, the percentage of forecasted revenue from a client relationship program may be less than in a larger practice. Some commitment to client relationships is usually desirable. But not every consulting firm needs a formal client relationship strategy.

Build Your Client Portfolio

Choosing clients and prospective clients to include in a client relationship program is complex, no matter the size of your firm. Assign clients to action categories according to their relative importance to the firm at a given point in time. This initial classification of clients is a one-size-fits-none exercise. Let your practice, culture, clients, and business objectives guide your decisions.

Consider these questions about your clients:

1. Relationship potential – Is the client interested in a long-term relationship? Can you realistically expect to sustain a relationship based on mutual benefit?
2. Compatibility – Is there a good match between the client’s long-tern needs and your firm’s capabilities?
3. Profitability – Do historic and forecasted account activity and profitability justify an investment in cultivating a long-term relationship?

read more: http://mindshareconsulting.com/learn-airlines-account-mgmt/