Do you know how your most important clients make money? What they need to grow? What could kill their business? Knowing the answers to those questions (and 3 more that I reveal in this article) could turn you into a trusted advisor – someone your clients will fight to keep.
As an account manager at an agency or a freelancer, it’s easy to forget to pay attention to the reality your clients are facing.
Such myopia comes at a price. Understanding your client’s business is critically important if you want to boost client loyalty and avoid becoming replaceable. Or as an economist would say: falling into the trap of commoditization. You could even risk becoming irrelevant and losing the client altogether.
The questions above might seem strange. They clearly have more to do with your clients’ business plans than what you are specifically doing for them as a hired gun. You’re probably a web designer or marketer, not a management consultant, after all.
Make no mistake, these questions are important even to you.
It’s the answers to these questions that pay your salary and fees.
That’s why it’s vitally important to understand how your clients make money. Such knowledge helps you understand what drives your clients’ needs and wants. It also helps you become more proactive in providing services, advice, and recommendations which makes them more loyal to you.
Having that understanding translates to you becoming a highly valued advisor. As a trusted advisor and confidant, you’ll be able to command higher prices. Your role in the eyes of the client also creates a deep trench, full of leeches and crocodiles, to cross for anyone trying to take your job.
The simple habit of staying up-to-date with your most important clients’ business situation takes you a long way toward building trust and client loyalty that lasts.
A Bi-Annual Client Business Review Lets You Stay on Top and Ahead
You don’t need to know everything about your clients to be a valued advisor who enjoys client loyalty. The more you know, the better, of course. Still, knowing certain key information goes a long way.
What’s more important is that you renew your information and update your knowledge on a regular basis.
An effective way of doing this is to perform a client business review twice per year. The review involves looking into how your most important clients’ businesses operate, what factors affect them and how you can contribute and help to boost client loyalty.
The review consists of:
- Planning the client review process.
- Rating your clients in order of importance.
- Answering 6 questions about each client and writing down the answers.
- Decide on the actions you will take based on the answers.
Step 1: Planning the Client Business Review Process and Holding Yourself to It
If you cannot do the review right now, at least read this guide and then plan a time for when to do it. Then return here to refresh your memory about the process.
Start by opening your calendar and find an available morning or afternoon so you will have plenty of time. Create a 3-4 hour long event. Label it “Client business review” and set it to repeat every six months. As a note, put the short-link to this article (https://bsai.cc/cbr).
Step 2: Rate and Prioritize Your Clients
You can make a business review for all your clients if you wish. But since answering some of these questions might be quite time-consuming, I recommend focusing on the most important clients first. These are the ones that make up most of your revenue and whose client loyalty is critically important.
If you’re diligent you might already have a file with clients ranked and rated by a number of factors. You know which ones that are important and which you keep to pay the rent. In that case, you can skip ahead to step 3.
If you don’t know which your most valuable clients are, here’s a quick exercise.
Create a Client Rating Sheet to Get a Birdseye View of Your Clients and Accounts
Start by copying this Google spreadsheet. To copy it, you need a Google or Gmail account.
Click the link then when in Google Sheets, click “File – Make a copy…” to create your own editable copy:
If you prefer starting from scratch, these are the steps:
- Create a new spreadsheet.
- Name the columns A: “client name”, B: “client contact person”.
- Title the following columns:
- C: How much are they buying?
- D: How fast do they pay?
- E: How profitable is the work?
- F: What is the potential of this account to grow?
- G: How much do I/we like working with them?
- Add another column (H) in which you calculate a sum or average. In the sample sheet below, I have weighted the columns. View the cell’s formula to see how. You can use my formula or come up with your own. You can also add more questions and customize this as you like.
- The final column (I) is used to translate the numeric score in H to a letter. Just like the grading system in school. You can adjust the formula here to fit your needs.
Adding the Client Information
Now it’s time to add the data. Type the names of your clients in column A, and the name of the contact in B. For each client (row), answer the questions (columns C, D, E, F, and G) with a number. 0 for abysmal and 100 for excellent.
In the end, you should be looking at something similar to this:
You can now sort the sheet by column H to list the clients in order of rating. I suggest having a look at the formulas and tweak them as needed. You may also disagree with the questions I’ve chosen. Feel free to change them.
Either way, the sheet should give you enough of an overview to be able to tell which clients that are the most important and valuable.
Step 3: Perform a Business Review of Your Top Clients to See How You Can Build Client Loyalty
With the ranked client list in hand, it’s time to perform a business review of the most important clients.
The client business review is similar to the questions you’d answer when writing a business plan for your own company. That’s intentional. The point of the review is to understand how your clients’ companies operate and how you can create even more value for them. Being proactive, helping your clients “think” and formulate strategies all build client loyalty but require an understanding of their business.
To save time, I’ve created a spreadsheet you can copy. To copy it, you need a Google or Gmail account. You’ll find the spreadsheet here:
Click “File – Make a copy…” to get your own copy to edit and work on.
This spreadsheet is similar to the previous one but its columns are different. We won’t be using a numbered rating. Instead, we will use this sheet as a way to compile the results of our research.
I’ve included a fictitious client to give you an idea of the kind of information that could go in the sheet. You may have some of the information already. In either case, I recommend starting with doing a web search for your client and see what pops up. That will tell you something about recent events and news affecting the client.
The first columns (A and B) are for the client and client representative names. You can use the other columns as follows:
C: What Need Does This Company Satisfy and for Whom?
These are the customers of your client whose needs your client addresses. Essentially, this is the reason your client exists. For an insurance company, it would be to help people make risks financially manageable so that a fire won’t ruin their lives. This is what you and your services help your client achieve or deliver.
D: How Does This Company Satisfy That Need?
Companies deliver their products and services by different means. Some find a niche by only using digital channels. Others invest in classic brick and mortar. Fill in what you know about how your client delivers its services.
E: How Does This Company Differentiate Itself?
What makes this company uniquely positioned or able to address the needs in column C? Entrepreneurs love talking about “unfair advantage.” All businesses have it, but not all of them have discovered it. If you know your clients’ unique and unfair advantage, you can help your client make use of it.
F: Which Are Their Competitors?
List names of competing businesses, a rough number of employees and turnover and what makes them unique. Do some research into their product lines to understand if they’re different and if so, how.
G: How Does This Company Make Money?
Where is your client’s revenue coming from? Subscriptions, products, services? What are their major costs? What is their average margin? This information helps when you’re pricing your services. Key financial numbers are public in many countries. Chances are you can find them in databases. How you find the information depends on your client’s country or state.
H: Where Does This Company Need to Go and How Do I Contribute?
Based on the above, make a recommendation. What avenues for growth and expansion do you see? Think about how the company would go about achieving it. Describe the role you could play in taking this client to the next level.
Step 3: Decide on Actions that Strengthen Client Loyalty
Finally, analyze all the information you have gathered. Write down your conclusions in the form of actions and put them in column I as bullet points. Each action point should be something concrete that you can do that results in higher client loyalty.
Such an action could be pitching a workshop to the client. It could also be creating a short 10 slide presentation about where their competition is going. You might realize you don’t know enough so you could also commit to learning about their specific market niche. The important thing is that it’s something you can plan to do.
How to Find Information About Businesses
Some of the information above may be hard to come by, especially key financial figures. As I noted, in some countries there are public registries and databases of business with financial numbers.
Quarterly and annual reports are also useful. Even companies that aren’t publicly traded sometimes provide these on their websites. If they’re not, chances are you can ask your client for it. You can explain and motivate your request by stating that you want to understand their business better. They’ll probably happily oblige.
If you have problems finding the information you need, post a comment and I’ll see if I can help.
Conclusion: To Build Client Loyalty, Think About Your Clients’ Business Situation on a Regular Basis and Take Action
Keeping your clients happy, and loyal to you, isn’t a black art. But it requires wanting to actively understand why they hire you to do what you do. The more you understand about the conditions their business operate under, the better decisions you can make. Your advice and recommendations will improve, and so will their trust in you, and by extensions their loyalty.
The method I’ve described here is just one way of doing it. It might not work for you and you may want to tweak it or use a CRM system. If so, do it. Just remember to consider the questions in this article on a regular basis. Constantly strive to learn more about your clients. It will help you do a better job and your future cash flow will look so much better.
Who are your most loyal clients? Why do you think they choose to be loyal to you?
Please share in the comments. I read all of them.