Your travel experience is determined by your place in the airline’s hierarchy of customers. This starts when you book your flight and continues until the plane lands. Airlines do not treat all passengers the same. They segment and manage them based on profitability, loyalty, and frequency of travel.
Professional service and solution providers, like airlines, have embraced account relationship management. However, many struggle to implement it. Account management is built on the idea that only a small subset of clients will buy most of your products and services. You should, therefore, manage them and market directly to them. Your business is important to all clients, but certain ones are more valuable than others.
More Eggs in Fewer Baskets
Relationship strategies that are tailored to your client’s needs can help reduce costs, simplify the management of complex relationships, increase efficiency in delivering products and services, and improve profitability.
A shift in mentality is the key to a successful relationship strategy. Solution providers often chase new opportunities, but they should instead focus on their existing clients and referrals.
As with an investment portfolio, you should distribute your resources to selected clients. Do not focus your efforts on one client, and do not apply marketing resources equally to all clients.
Does that work for You?
First, you must decide if an account relationship program will work for your business. The decision is easy for larger companies with a long list of clients. These firms should implement a program that focuses resources and personnel on specific industries and clients.
Smaller firms may want to focus on building client relationships, but they do not need a formalized strategy.
Build your Portfolio
No matter how big or small your company is, it can be not easy to decide which clients you want to include in a program for account management. You can assign clients to different categories based on their relative importance for your business. This initial classification is not a fit-all exercise. Your culture and business goals should guide your decision-making.
Ask yourself these questions when you are evaluating your client:
- Relationship Potential: Does the client want a relationship that will last? You can realistically expect a mutually beneficial relationship to last.
- Compatibility: Does the client’s needs match your abilities?
- Profitability: Does historical and projected account activity and profitability warrant an investment to cultivate a long-term partnership?
When evaluating each client, consider two factors: the strength of their relationship and the potential mutual benefit. Each client should be placed in one of four categories.
- Manage key clients. Your key clients are the clients that you consider to be most important in terms of their relationship and mutual benefit. These are the clients who should be your first choice for a management program.
- Investing in relationships Clients who have a high mutual benefit potential with whom you do not yet have a strong relationship are the next-generation key clients, assuming that you can develop effective relationships with decision-makers. Invest in developing those relationships to turn those clients into key accounts.
- Move to higher-value offers. Your clients may be loyal, but they don’t understand or know the full extent of your business benefits. You can educate those clients about mutually beneficial opportunities.
- Rethink. Sometimes, a mutually beneficial business relationship just isn’t possible. Consider reducing or eliminating your investment in these clients.
This snapshot of a moment in time is only the beginning. You should regularly revisit each client’s potential and adjust how you use resources.
First Cut Your Strategy
Create a specific Marketing Strategy for every key client, which includes eight elements.
- Top five problems your client faces
- What you can do to help?
- What makes you different from the rest in terms of meeting client challenges?
- Your relationships with key decision-makers
- What relationships will you build, and what ones will you strengthen?
- You’ll need to use marketing tactics to position yourself in the minds and hearts of your key clients, decision-makers, and influencers.
- Time and money spent on marketing for your client
- How will you measure the success of your client relationships?
After you have created your outline, ask for client feedback. Ideal relationship strategies are developed in partnership with the client. Your plan will be a wishful thought if you don’t have a consensus about what you want to achieve.
Will it Fly?
This may appear to be a risky way to manage your key clients. You could spend the majority of your marketing budget on a few clients that don’t generate the profits you require. Don’t stop doing other marketing activities to increase your company’s visibility. As a general rule, allocate 60% of your resources to key clients and the rest to different clients.
