A 30-minute webinar record with KSU, “Starting the Climb Back.”

A discussion on ways we might emerge from the disruption of this pandemic (or any crisis) as a responsive and empathetic partner. We hope that the extraordinary commitment you can demonstrate now will serve to make the relationship stronger after emerging from the crisis period than it was when we entered it.

1) Understanding and Managing Client Expectations – Expectations are the key drivers of client satisfaction. Ultimately, people make value judgments about products or services based on how they actually perform versus their expectations of how they believe (or are led to believe) they should perform. Operating plans must be built and executed to consistently meet and exceed client expectations. Consistently exceeding prioritized corporate expectations drives provable and sustainable value for the client.

Our experience, over many years of working with leading service providers, is that generally the sheer volume of communication that transpires between the parties who have entered in to a contractual relationship is directly correlated to the health of the relationship. Even if the client is complaining or sharing negative feedback, it usually indicates that they care about what is happening and, that as difficult as the situation may be, they haven’t given up on it.

As background, Pareto first noticed that 80% of the land in Italy was owned by 20% of the population. Shortly thereafter, he realized that 80% of the peas in his garden were produced from just 20% of the pods.

Expectations are highly important to the successful management of client relationships. They are the key drivers of value. Did you know that there is a psychology of expectations and how they are formed?

Expectations come from two sources, communications and experience.

It can be gut wrenching — dissecting a failed relationship. In a divorce you might say the love is gone, the commitment broken, the magic lost. In a business relationship, usually the value has gone, the trust compromised, the enthusiasm waned.

Ultimately, value is the key word and the primary driver of retention. Value doesn’t have to be complicated – in fact it’s a pretty straightforward equation: V = Q ¸ C (Value is equal to Quality divided by Cost).

Picture, if you will, an account we’ve served for years. Like most clients, financial pressures intensify from time to time. They are thinking critically about their costs, staffing, overhead and general productivity. They take seriously their obligation to be productive managers and prudent buyers of goods and services. Everything is on the table.

We often find that the problem is not so much with the clients, but instead with the service providers. Possibly, because a service or function is outsourced to begin with, our clients may feel it is “non-core” and less important to executives in the overall scheme of things. Often they are a reluctant to ask senior executives for the time and attention necessary to optimize the relationship and facilitate vital communication. They’re too often and too easily intimidated.

Haven’t you ever been flattered by someone you know, but maybe not terribly well, when they remember something about you that you find surprising? That’s happened to me more often than I’d like to admit, particularly if I have very little recollection of comparable details about them. Surely we had a conversation some time ago and shared this kind of personal information with one another – our kids, our work, our interests. But they remembered and I didn’t – or maybe I was just too self absorbed to have asked in the first place. That’s definitely possible too. Nonetheless, I’m really flattered because they’ve made me feel as though I’m important to them. It’s nice to feel valued. It’s really nice to make other people feel valued.

It’s a bit like pastors. More than once I’ve heard a pastor, upon hearing an interesting or inspiring story, say “That’ll preach!”

Here are a couple of random observations on relationships and interpersonal dynamics:

Okay. So how do we know what problems are important to solve that simple we’ve asked them in the context of the meetings. We’ve held around their expectations. In fact, not only have they told us what problems are important to solve. They’ve told us what order to solve them in remember because we’ve insisted they prioritize the list.

Let’s sketch this out as we go deeper into the service lifecycle. In the diagram that follows, first sketched on the back of a napkin in 1998, the X-axis represents “Time” while the Y-axis is High and Low.

As with many things, there is more than one way to look at this graph.  When viewed from the service provider side, this is a great outcome.  We’ve successfully solved / reduced the clients problems and we are returning increasing revenues and profits to our firm.  This is great performance and exactly what we are trying to achieve.It looks different, however, from the client’s vantage point.  Once the lines have crossed, clients see a smoothly functioning / low problem operation that they are paying a great deal to maintain.  As time passes, we’re farther and farther from the hard work and massive value we created at the opening.  It’s natural for clients, who are always looking to trim costs, to begin to wonder, “What have they done for me lately?”

“What WILL you do?” Great stuff!

I think back to those commercials when I consider the dilemma of Revelation X™. Here, we’ve been doing a great job for our client – working hard and solving the problems they hired us to solve. At the same time, we’re doing an equally great job for our company – bringing operating efficiencies and fee increases that enhance our income and margins. We’re blissfully anticipating “Manager of the Year” awards while our client is struggling to remember just what they’re paying for and exactly what we’ve done for them lately. The “Value Gap” is staring us squarely in the face and we don’t even see it. But our contract is now at risk. “What will you do?”

If you recall from the immediately preceding podcast, the business big chill occurs when we experience a client contact change near the point where the Revelation X lines have crossed and the “Value Gap” is emerging.

Let’s revisit Revelation X again.  Last week we talked about the red line (the “Problem” line) and its role in closing the “Value Gap”.  Well, there’s only one other line that creates the “Value Gap” and, of course, that’s the green line (the Fee / Profit) line.  Whenever the green line goes up, value will decline, unless there is a commensurate quality improvement that is real and recognized.

Interviewing our client’s clients is one of the most valued services Tenacity provides. These assessments are FreshEyes® Reviews (existing clients) and PostMortem Auditssm (lost clients).

The Ten Commandments of Client Retention, also known as The Tenacity Ten, are revealed in our first book, “What Your Clients Won’t Tell You and Your Managers Don’t Know.”

The first two commandments given to Moses were about defining the relationship God expected to have with His people. In like manner (but admittedly less earthshaking), Tenacity’s 1st commandment of client retention is intended to define and govern the relationship that providers of services should have with their clients.

Tenacity Commandment #3: Expect Your Client To Have Expectations You Didn’t Expect They Would Have.

The third of the original Ten Commandments instructs us not to take the name of the Lord in vain. That can be a particularly difficult temptation when a client expectation surfaces that seems completely out of left field. But, it does happen, so just expect it to.

We’ve all heard the terminology; “Flavor of the Month”, etc. Once management acquires a reputation (internally) for managing this way, i.e. constantly shifting tactics (or worse – shifting strategies) – they risk losing both credibility and the attention span of their people.

“When the going gets tough …”
“The spirit was willing, but …”
“Drive for show, putt …” (Non golfers excused)

You get the idea. This phrase, in the title above, that comprises Tenacity’s 6th Commandment has that same resonance, not only with us, but also with our clients. Truer words were never spoken, at least in the world of business. “When people change …” is a phrase begging to be completed. We are at risk when people change – let’s deal with it. Now.

Do you remember “Attitude & Action?” “Action” means, “whenever we perceive a threat to our client relationship, we will take every action we know to be effective to eliminate the threat and defend our contract.” Changes in the client’s Web of Influence are a threat – every time – no exceptions.

We work with our companies directly to facilitate the renewal of major contracts. Of course, we advocate that all clients should be precious when 100% client retention is the goal – it’s just that some we REALLY REALLY can’t afford to lose. Right?

Hey, no worries. We have a year and a half left on our contract.

Those words actually mean it’s t-minus 548 days. And while that may be the actual number of days you have left before contract expiration, it’s time to really get to work because … well, question. Do you think your competition knows the expiration dates of your most important contracts?

#9: “The end of a contract doesn’t have to mean the end of a relationship”, and
#10: “How you close a contract is just as important as how you open one.”

It’s been stunning to us over the years, to bear witness to the truly bad behavior of some contractors upon losing then exiting a contract. We’ve seen it in professional service firms and in janitorial service companies and everywhere in between. The reactions range from petulant attitudes (as if toward a lost love) to outright sabotage of the operation and the incoming replacement firm. It is reminiscent of the childish disabling of the “W” keys on word processing and communication equipment in the West Wing when President Bush 43 came in to office. That’s the sort of thing we remember, isn’t it? And, certainly, not in a good way.

But there is a point in the clients for Life client retention process where effective and timely negotiating is particularly important. That point is after the new client has been sold, perhaps with a letter of intent, and just before the contract has been signed and services and begun.

In 2014, John and I, along with key administrators at Kennesaw State University, established the Tenacity Center for Account Management and client Retention at the Michael J. Coles College of Business at Kennesaw State University.

The podcasts that follow talk about the center, its purpose and its offerings and how it fits with our overall practice at Tenacity.
The Coles College at Kennesaw State University, KSU, encouraged us to establish the center for several key reasons, but specifically, Coles’s is all about engagement with the business community.

While it may feel we’ve been out to lunch, we haven’t. We are go for launch now with new tools for key account management that we think are truly game changers in assisting account managers to rapidly apply best practice methodology to their client responsibilities. So we’re go for lunch now and we want to provide you several options to learn more and to engage with us. So perhaps the best way to do so is in a frequently-asked-questions format.

So how would you describe these new tools you’ve been working on and announcing?

You know, it would have been too easy to call this section, “miscellaneous,” but indeed that’s what it is. Any podcast that didn’t fit neatly into one of the prior categories found a home here. My favorite dogs have always been the mutts and some of my favorite podcasts are in that category as well.

The first is called, “Indelible Impressions and Teachable Moments.”

There is a certain tyranny in the “new normal”. Humans have a tendency to normalize any situation – including the situation where we possess a client in our portfolio. They’re ours – we have them – we’re used to them. The thrill of the victory when we won the client has long since vanished. We’re off to the next new conquest – the next new client.

The Clients for Life® client retention process is an immensely powerful tool. Emanating from years of observing and codifying best practices in account management, we have demonstrated over and over how effective it can be in helping our clients keep the clients they’ve worked so hard to get.

Still, one of the fundamental truths is, “Clients for Life works – but only if you work at it.” It’s the diligent, persistent, proactive work our most successful clients exhibit (work that requires great tenacity) that inspired the name of our firm, Tenacity, Inc. We know great tenacity when we see it – and that brings us to Tenacity Award winner (and my friend) Dr. Hugo Keim.