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4 responses

17 02 2010
Nick Mayhew

Great article Mark, hope you don’t mind I have posted it up to my senior management group.

Best wishes

17 02 2010
intelligentchallenge

Thanks Nick; the more people it reaches the better!

15 09 2010
Ron Pol

Absolutely. When I speak with law firms I often ask them how they identify their 20 top clients. Easy, they say. Last year’s billings; ranked 1-20. Yet this misses the point, sometimes dramatically. We then discuss the relationship ladder, at the bottom of which firms are not used, then used occasionally, then on the panel, etc, up to trusted adviser at the top of the ladder. I then ask them to think about a big client on their ‘top 20’ list client for whom they are an occasional supplier. Let’s say a big corporate with $20m+ legal spend of which they get say $2m, but for whom, frankly, the client would hardly notice if another firm was doing their work. (Easy pickings – there’s always a client like this, often rather too many as it turns out). Then I ask if they can think of a client not quite on their top 20 list (and not getting a whole lot of loving as you say) but for whom they get the client’s entire legal spend of say $1m (I have found that this example scales well for whatver size firm) and the client thinks they are the best thing since slicved bread. OK, which is your most valuable client of these two? Even now, most partners still say the $2m client. OK then, I say, even putting aside that that client wouldn’t even notice if the firm disappeared tomorrow, how do you measure the referrals that flow from each of these clients? This is typically met Homer Simpson style. Duh? What’s the most compelling marketing message? Love the marketers, they’re smart and persistent, but it ain’t them. It’s ‘someone like me, recommending someone that they think is brilliant’. So, is the $2m client recommending you? thney hardly notice you exist. Yet the $1m client, every opportunity that arises, at chamber of commerce meetings, businesss lunches, etc, whenever someone whinges about their lawyers, he/she says “well, the lawyers I use are just amazing, they…” Now, if that client has over the years darwn half a dozen other clients to the firm, with a total spend of say $500,000 each, how do firms measure that? Of course, not one of them make the grade of MVP client. Yet the reality is that the ‘only $1m client’ is actually drawing $4m to the firm, twice as much as the ‘top 20 client’ – yet is below the radar, alrgely ignored. Then let’s say the CEO finds that the price of his non-loving by the firm is that he’s paying rack-rates and getting none of the value adds that others receive? Hmm, does he/she feel quite so loved now? Is he/she recommending the firm quite so much any more? The sad thing is, firms don’t even notice, until it’s way too late, as these seiously most valuable clients quietly fade away. Nor do they notice, until it’s too late, as the recommendations drop away. You gotta see the loving, and give it back, for it to stay true forever…

15 09 2010
intelligentchallenge

Man, what an awesome comment. Brilliant. Telcos often talk about lifetime customer value, but your analysis, by incorporating referrals, goes further still and I think delivers even more value. Spot on.

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