Here’s a not wholly unusual scenario: we engage over several months with a prospect firm’s BD Director (BDD), regarding a client listening project. They like our research proposal, strategy and target outcomes, budget is fine and they view Nisus as a market leader.
All systems go, just needs the final sign off from the CEO to proceed. But despite the evidence presented, case studies and a proven track record, the CEO is unconvinced of the return on investment.
So, what went wrong?
The BDD is fully committed, sees the benefits of independent client research, but the CEO is divorced from the BD process and believes 10% growth is sustainable in the long-term without this or any other investment.
Sustaining double digit growth without paying any real attention to those providing the growth? Oh dear. This is like getting a plane up to the desired altitude and then turning the engines off in the belief it will sustain altitude, as if by magic. This will save fuel in the short term, but in the long term…
Any CEO should be looking at any investment and what the return will be for their business, over a given timeframe. Despite all the articles and evidence we provided, this one wasn’t persuaded. That’s his right, and an easy conclusion when the horizon looks rosy. The issue is that past performance is no indicator of future performance: thats ‘rowboat’ management – rowing forwards when looking back.
The value of listening
Had I been faced with this CEO, I might have regaled the story of a client interview I undertook last year. Another law firm sent me to see one of their second-tier clients. The brief but went something like this,
“We’ve had them almost since they were a startup seven years ago. They’ve grown hugely and not just in this country. We’ve done an acquisition and refinancing, as well as IP. We get the lion’s share of their work. It’s now worth about £250k a year to us and growing. We have one of the best relationship partners on it. Should be plain sailing.”
Except it wasn’t. When I got in there, it quickly came out that the client was feeling unloved, which had caused them to contemplate an affair with someone else, probably as a prelude to a divorce. And, trust me on this, divorces are expensive.
Long story short: the firm pulled its finger out and saved the day. The so-called best relationship partner was so good they had overloaded him with relationships (presumably because everyone else was rather less good) and by his own admission, he had neglected the client. So, that’s £250k that was about to walk out the door – well over a million across the previous seven years and, if they play their cards right, more than a million in the next seven. Shandies all round.
If this didn’t bring our managing partner friend in from the Dark Side, the matrix below might have helped him to see that it is one thing to achieve double digit growth and quite another to sustain it without the investment required to make absolutely sure the firm is on top of its clients’ views and concerns.
The client focus matrix
Our client, who almost lost their £250k rated client places in the bottom left quadrant to start with, but then were able to take action. Client listening saved them from an unwelcome hole in this year’s budget. However, our prospect, let’s call him Double Digit, assumes that given his impressive rate of growth that all his relationships fall in the top right quadrant or, very occasionally, the bottom right. Either way, they know what’s going on – and he may be right. Of course, if he’s wrong, then it could be ‘bucket with a hole in it’ time.
To invest or to ‘trouser’?
If he is right, there is no need for research, far better for his partners to trouser the fee instead. Although he’d miss out on all sorts of other intell’.
Decent client listening is that little bit of insurance for those occasions when the partner thinks he knows but (and whisper it very quietly), actually doesn’t, not necessarily through any fault of his own. But good luck to Double Digit and his firm, we wish you and all your partners well on your journey into the unknown.
About the author: Tim Nightingale
Tim founded Nisus Consulting in 1996 with the aim of helping professional services firms become more client focused. Tim has an MBA from Cass Business School, is a Fellow of the Chartered Institute of Marketing and a full member of the Market Research Society. See Bio…