Client Service Insights (CSI)

Tuesday, May 6, 2008

It's Your Values That Matter

Many organizations have mission and vision statements. Fewer have values statements. From a client service perspective, it's values that matter. It's great to know why you exist (mission) and where you want to go (vision), but it's defining who you are (values) that may mean the difference between delivering excellent client service or not.

Now what do we mean by values statements? In the July 2002 issue of Harvard Business Review, Patrick M. Lencioni shared an interesting story: "I once asked the CEO of a Fortune 500 networking company to tell me one of his firm's core values. 'A sense of urgency!' he replied without hesitation. 'So,' I asked, 'your employees take quick action and hit all their deadlines?' 'No,' he replied, 'they are complacent as hell, which is why we need to make urgency one of our core values.'"

Lencioni added, "That response reveals the confusion underlying many values initiatives. Far from being a core value, a sense of urgency didn't even exist in the organization. It was just an aspiration - a goal for the future."

If you have a core values statement, it may be time to revisit it to determine whether your core values are truly engrained in the organization or still aspirational. If you don't have a core values statement, then drafting one that truly reflects the current state with an eye toward success for the future can be a gratifying and important exercise. Your employees and your clients will be the big winners.

Both my current and my previous employer had core values statements, and each in their own way serves the organization well. One is more memorable; the other more inspirational. Both have a measure of aspiration to them - as well they should. It's all about trying to be better.

Monday, May 5, 2008

Client Acquisition Versus Retention

You hear a wide range of numbers tossed around regarding the costs associated with acquiring new clients versus retaining and growing the ones you have. In a blog post at Profitable Marketing where the author challenged the commonly quoted 5 to 1 ratio, I actually found a comment that explained this familiar axiom.

Jim Novo noted, "The general truism 'it costs 5x more to acquire a customer than retain one' is from Fred Reichheld's (yes, he of NPS fame) earlier book, The Loyalty Effect (1996). It's based on his study of 25 different companies across many different industries - State Farm, Toyota, John Deere, Leo Burnett, Enterprise Rent-a-Car, MBNA, Chic-Fil-A, etc. when he was at Bain & Co. This book is also the source of the '5-point increase in retention lifts per-customer profit by more than 125 percent' type of idea.

"To clarify, this '5 to 1' phrase has been hacked up and taken out of context for more than a decade. The original meaning is the yield on a dollar spent is 5x higher for retention than acquisition; the ROI is 5x higher for retention than acquisition..." (Visit either link above for the complete comment).

Consider how much time, effort, and expense it takes to pitch a prospect. Depending on how elaborate the review process, even if you win the business, it can take months to achieve a breakeven position. So if it's more profitable to retain clients than find new ones, then why aren't we as a profession focusing more of our efforts on retention? On client service excellence.

I answered a question on Linkedin today regarding industry practices for rewarding agency employees who bring in new business. Here's my paraphrased response:

Your employee should be well compensated for the myriad services to be delivered here, but I would not set a precedent for rewarding employees for bringing in new business. I think you should reward the team based on overall agency growth rather than try to compensate individuals for specific new client wins.

What do you think?

Client Service And The Economy

PRWeek was kind enough to run a piece I wrote about the importance of client service in the PR business and the way this is revealed in a down economy. Staying One Step Ahead of the Lion wrestles with the question: What does it tell us about our value as a business partner that when times get tough, our budgets either get cut or we get dismissed altogether?

The point is that our clients should believe they stand a better chance surviving, and even thriving, during down times with us than without us. A greater focus on client service excellence is a first step to helping us get there. If nothing else, it's a great conversation topic to start the week.

Sunday, May 4, 2008

Three Key Practices

During Dr. Kent M. Keith's interview with CSI Season 2, he outlined three key practices gleaned from understanding servant leadership that can help us better serve our clients. These practices are worth highlighting:

"One key practice of servant leadership is comprehensive listening—gathering a wide range of in-depth information about customers or clients to make sure the organization understands what people need. It is hard to meet people’s needs if you don’t know what those needs are!
"Another practice is changing the traditional hierarchical pyramid, so that the chief at the top is not isolated but is part of a team, and people in the organization look out at the customer as well as looking up at their bosses.
Servant-leaders also pay attention to developing their colleagues, coaching instead of controlling, and unleashing the energy and potential of others. They know that when you take care of your colleagues, they will be able to take care of your customers. These and other practices make it possible to provide superlative service to customers and clients.

For more information on servant leadership, visit The Greenleaf Center for Servant Leadership.

Saturday, May 3, 2008

TalentZoo.com Meets The Client Relationship Autopsy

The great people at TalentZoo.com were kind enough to ask me to submit some byline articles for their site. They asked for topics that had a bit of an edge and would be provocative for their readership. They posted my first submission last week titled, The Client Relationship Autopsy. Given that this blog's title includes the initials CSI, it seemed only fitting.

The article expands on a post I wrote during Season 1 and is based on the simple premise that learning from the failed relationships of the past will provide us guidance to seek and build better ones in the future. Client acquisition costs are enormous, yet when agencies lose clients (and we all do), most don't take the time investigate the loss. It's a missed opportunity.

I would encourage agency leaders to review the client relationship autopsy procedure outlined in the article, adapt it to their agencies as they see fit, and implement the practice as soon as possible. Over time, you'll find the results will be invaluable.

Friday, May 2, 2008

Advanced Client Service Excellence

The quality of the video isn't great, but nothing can obscure the clarity of excellent client service. Have a great weekend!

Thursday, May 1, 2008

Client Service Blogs For You!

In January 2007, JD Hull posted a list of links to blogs dedicated exclusively or in large part to the topic of client service. (JD was kind enough to add CSI to the list at the time as well). I posted it a month later during Season 1, and I recently checked on each of these blogs. With rare exception they are all quite active. As I mentioned over a year ago, for those of us who are passionate about client service, it's invaluable to get a broad perspective. These should keep you busy for awhile!

I plan to add these links to my sidebar under the special heading of Client Service Blogs. If you would like me to add others to the list, please let me know.

More Partner Income, Tom Collins

In Search of Perfect Client Service, Patrick J. Lamb

Jim Calloway's Law Practice Tips Blog

The Adventure of Strategy, Rob Millard

Amazing Firms, Amazing Practices, Gerry Riskin

CBA Practice Link (Canada)

Church of the Customer Blog, Ben McConnell & Jackie Huba

CustomersAreAlways, Maria Palma

David Jacobson’s External Insights, David Jacobson

Gladwell.com Blog, Malcolm Gladwell

Golden Practices, Michelle Golden

The Greatest American Lawyer