Smarter ways to grow client relationships: taking account management to the next level
Account management has become an arms race for professional firms in the effort to attract and retain clients. Added-value services that would have been considered novel and differentiating five years ago are now merely the norm. “There is huge demand for more client management resources,” observes Michael Michaelides, Associate Director of Business Development at Allen & Overy. “This comes both from partners at the firm, and clients themselves.” Allen & Overy’s experience of increasing demand is far from unique.
When executed well, account management can have measureable impact on a firm’s profitability and client satisfaction. But as the account management arms race escalates, firms needs to ask themselves two important questions: does their account management programme actually add value to client relationships, and does the investment in time and resource actually pay back to the firm in generating more business?
To answer these questions, and to establish what the ideal account management programme for professional services firms looks like, Meridian West assembled an expert panel to discuss their experiences at a roundtable event in partnership with RBS and the Account Managers Network. This paper summarises the main points arising from that discussion.
The Meridian West account management panel:
- Bruce Macmillan, general counsel at Legal Practice Technologies and previously senior commercial legal counsel at VISA;
- Greg Bott, heads the Client Development Centre at Addleshaw Goddard and is writing a PhD on account management;
- Eddie Bowman, formerly Global Marketing Director at EY;
- Michael Michaelides, Associate Director of Marketing & Business Development at Allen & Overy, and
- Ian Bennison, Marketing Operations Director at TMF Group.
Two dramatic shifts form the backdrop to the account management debate. First, there is a shift away from a traditional model of account management whose purpose was to demonstrate to clients that their business was valued by the professional services firm to a new model where the client has come to expect tools which are genuinely and practically useful. Clients now expect added-value above and beyond paid-for engagements.
The second fundamental shift is from account management as an added extra which resides with the business development department of professional firms to account management as an essential part of firm-wide strategy, which requires cross-functional teams to collaborate to deliver it successfully.
In the light of these fundamental shifts we explore four practical steps your firms can follow to take its account management processes to the next level.
1: Change your approach from reactive to proactive
To be truly effective, value-added extras should be offered to clients proactively rather than reacting to changes in client needs after they have occurred. Michael Michaelides cites as an example the amount of resources which are currently being spent by CRM teams at law firms on reporting requirements for banking sector clients. “Law firms’ systems are often not able to produce the information requested efficiently, so reporting can consume a lot of a CRM team’s team – taking them away from other value-added activities,” he says.
The solution is to become more proactive in understanding exactly what clients value in order to eliminate a lot of the admin time required to service their reporting demands. Without a more open conversation about this at the outset, the risk is that CRM resources are used in the wrong way.
Proactively finding ways to standardise your firm’s account management infrastructure as much as possible can free up resources that can be reinvested to deliver genuine value elsewhere. Creating templates for meetings, reporting and internal comms also make it much more straightforward for fee-earners and other internal audiences to engage with your firm’s programme.
2: Really understand your client
There is little doubt that understanding client needs is an area where firms have improved, but could still do better. As a senior buyer of legal services Bruce Macmillan explains that there are many levels at which a firm needs to understand its clients: “I want my advisers to understand me, exactly who I am as an individual. Then they need to understand my team, my technology platform, and my business environment as well. Understand who I am addressing, my internal clients, and the wider market I operate in.”
|“I want my advisers to understand exactly who I am as an individual, my team, my internal clients … as well as the wider market I am operating in.”
– Bruce Macmillan
A more detailed and personal understanding allows a firm to tailor its account management offering towards things that will really add value to individual relationships. For example, an innovative new technology solution to mapping contract risks may offer excellent functionality which could really benefit the client, but if it cannot be integrated with their current systems then it is wasted time and resources.
The most effective way of developing this understanding is to integrate direct feedback from clients into account management processes. For key clients this may be through regular in-depth relationship reviews, whereas for less important clients an annual online or telephone questionnaire may suffice. Embed this insight – about client-specific needs and preferences as well as firm-wide trends – into account management decisions about where to prioritise future investment.
3: Take a focussed approach
In reality there is always a balance to be found between providing a resource-intensive, bespoke account management package to every client and a cheaper, but less flexible, standardised offering. A segmented approach works best with firms sparing no expense to provide a premium account management experience to its very top clients, while smaller clients receive a set-menu of account management offerings.
Eddie Bowman explains this approach: “We decided that there are somewhere between 250 and 300 accounts in our business which are special: they have to be generating about £25m in revenue now and be capable of generating £50m worth of revenue by 2020. Once we identified these organisations, we had to align the organisation behind focusing its resources on these accounts.” In practical terms this means providing enhanced or bespoke sector insights, access to the firm’s expertise and customised account management options to key clients.
For clients designated non-key clients, firms need to commit to offering a lesser, but still tailored, level of resource otherwise risk over-servicing theses smaller accounts. “At EY I think we were quite brave in saying that these other accounts are not going to get the same level of resource as the top 250,” says Eddie. “Instead what those accounts get is determined in a more local way. Often this means providing a set of self-service tools for everybody else that allow local teams to meet client needs but take the strain off central delivery teams.”
4: Make account management an integrated part of your firm’s strategy
Our panel agree that one of the most significant challenges of account management is how to allocate responsibility and accountability. At present account management is most likely to still reside within CRM teams and is not properly embedded across the organisation. Yet account management cannot remain the concern of only one team, but must be integrated from the top down as a vital part of the firm-wide strategy for winning new business and developing existing client relationships.
|Aligning business strategy with account management is a vital step in moving towards a more client-centric operating model.|
There are two reasons why this is the best approach. First, without an integrated programme it will by almost impossible to provide a consistent approach to managing client relationships across departmental and geographic borders. Second, aligning business strategy with account management is a vital step in moving towards a more client-centric operating model where the firm is driven by the wants and needs of clients not just partners.
As Ian Bennison of TMF Group has found, a lack of consistency in account management means that one bad experience, even if only very small, can have a major impact on a client relationship. “Our big clients tell us that although they may love what we do for them in 25 different countries, if one country lets us down it puts that relationship at risk.” Often the best way to overcome this problem is to have a strong executive or heads of departments of country offices who work very effectively together and with account managers to take a more strategic, holistic view of how best to support client relationships.
“Key account management works best where it taps into the client care culture of a given firm,” says Greg Bott. “This means a strategic view is required. For example, does a firm’s remuneration structures drive behaviours that support or work against effective account management? Who are the best people to take responsibility for owning and growing key accounts? This may not always need be a fee-earner.”
A virtuous cycle for account management
Critical to running any client-focused firm is to understand the needs of clients and to deliver effectively on these needs. This requires moving beyond excellence in the provision of core technical services to developing more consistent, and sophisticated, added-value offerings and account management frameworks.
Best-in-class account management is a virtuous cycle that builds in continuous improvement. The leading firms take a proactive approach to maximise the impact of their account management spend. They recognise that understanding clients is a multi-layered process, and that spend should be proportionate to a client’s current and future value to the firm. Most importantly they consider account management not as an added extra, but as a key part of their firm-wide strategy.
Despite the challenges, good account management can deliver dramatic rewards. Bruce Macmillan cites one example: “One firm went from generating no revenue from me to £200k worth of revenue in the first quarter, to all of my revenue across Europe and Asia in the second quarter, and to be on the path to taking over work outside of my area from other divisions within six months.” How did this happen? “An account manager came over from Vancouver to set up something that they had done before in Vancouver for an American client which one of my team knew about; essentially they invested in setting it up a SharePoint solution for me and a project manager to make it work. This really helped how my legal functional worked on this area of law and how it communicated with and worked more effectively with the business.”
By understanding the client’s individual and business needs, showing a commitment up front, and a willingness to invest for the long-term term similar opportunities are available to any firm prepared to rise to the challenge of implementing a best-in-class account management programme.
Ben Kent, Alastair Beddow, Joseph Minchin