Trying to get work in the door can be a challenging process for A&E firms, and many may be missing the easiest opportunity of all. Getting more work from existing clients! You may assume that your clients are giving you all the work they have, but what if they aren’t? What if they don’t even know everything your firm is capable of?
Are Your Business Development Efforts Strategically Focused
I frequently see business development effort focused on getting new business while ignoring the greatest asset the firm has – it’s existing clients. Research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) shows increasing customer retention rates by 5% increases profits by 25% to 95%. And it is well known that it can cost 5 to 10 times more to acquire a new client than it does to retain an existing one.
While many A&E firms rate themselves as having excellent client relationships, the truth is that much of that is by accident. Only a small percentage of firms actually have a documented and strategic initiative to retain and grow existing clients.
7 Ideas for Growing Your Revenue From Existing Clients
There are only three ways to increase revenue – by acquiring new clients, by increasing the revenue per client, and by increasing the frequency that clients purchase your services. Below are seven ideas for strategically growing your revenue from existing clients.
1. Classify clients
When looking at your client base, not all clients are created equal. In fact, many firms I work with say they would love to fire some of their worst clients. I believe you could fire the bottom 20% of your clients and actually make more money! I recommend you classify your clients into categories such as A, B & C based on some agreed to criteria. In most cases the 80/20 rule will apply – about 80% of your revenue and profits will come from 20% of your clients. This will help you to start understanding the true impact of your best clients.
2. Focus on your “A clients”
Now that your clients have been categorized, take a good look at how you treat them. Are your best clients treated the same as your worst clients in some cases? Do your employees jump off of an A client’s project to answer a call from a demanding C client? A few things you can do to start to treat A clients with the attention they deserve include:
- Get to know them better – learn more about your best clients so you can dig deeper in your discussions and get to know them personally.
- Meet in person – make an effort to meet with them frequently in person. There is no substitute for human contact and personal interaction to build relationships.
- Create Client Retention Plans for your best clients – develop a documented strategy to retain and grow your top clients. Include specific actions that leaders and managers should be taking on a regular basis to better communicate with clients, improve relationships, and look for ways to get more work from current clients.
3. Get feedback
It can be very valuable to survey your clients on a regular basis to get feedback. The Net Promoter Score is one tool for understanding whether your clients are inclined to refer and recommend your company to one of their friends.
4. Evaluate options for cross-selling
Internal communication is a great place to start in cross-selling services between offices. Many times one office is not aware of clients and projects in another office and working together to cross-sell services can be a great strategy. Be careful how you incentivize your teams though – the wrong incentive plans can cause behavior that is not conducive to sharing information and work.
5. Educate clients about your capabilities
You may be surprised that your clients don’t really know much about you! Educating clients about your skills, expertise and services offered can open doors into other projects and even departments within their organization that hires from other disciplines that you offer.
6. Use a Client Relationship Management (CRM) system
A great CRM system can provide a competitive advantage in executing on a strategic client retention initiative. Collecting data on client contacts and competitors, as well as using Activities and reminders for regular client reach-out can really help a very busy professional.
7. Evaluate where you add value
One of the realities of doing business in the A&E industry since the recession is the pressure to reduce fees and profits to an unsustainable level. The key to getting out of this trap is to learn how to sell on value rather than price. This takes a concerted effort to understand where your firm adds value to your clients’ projects and being able to communicate that directly and through your marketing. One strategy for coming up with good talking points is to do some post-mortem analysis of some of your most successful projects and understand the following:
- Where did we save the client money and time? It is often in other places such as permitting and construction where your expert services keep your clients budget and schedule from exploding.
- How do we make our clients’ lives easier? Maybe your unique expertise of regulations or government compliance saves them a lot of headaches and avoids battles.
- Where do we help our clients’ avoid risk?
- Where do we really excel? Are you really efficient at getting things done? Get it right the first time? Have remarkable responsiveness? Do you have talent that no competitor has? Dig deep to understand your firm’s unique attributes.
Your Best Clients Deserve Your Best Service
By intentionally focusing on your best clients, and possibly even firing some bad ones, you can decrease your cost of Marketing and Business Development and increase revenue in very strategic ways. The first step is to know who your best clients are and ensure that all of your staff know this too. Your best clients deserve your best service and this will pay off in higher revenues and less stress of constantly having to feed the pipeline.
Invest in Yourself. Invest in Your Firm.
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Developing Superstar Employees
Date: Thursday, April 18th, 2019, 1:30 pm ET
Employees are the key to a professional services firm’s success. Yet many firms promote technical people into roles they are not prepared or ready for. As a result, project profitability suffers and there is frustration at every level of the organization. By enabling employees, through financial and systems training, automation, and accountability measures, the firm’s profit margins can increase substantially.