People have relationships with people. Theoretically, clients can have a relationship with an organization and a brand. In reality, the dimensions of such relationships are much more difficult to define. It is so much easier to get confused about what “relationship” really means. At the end of the day, if we as business owners want the clients to have a relationship with our firm, we need to put faces to the firm and ask multiple people to represent the firm in its relationship with the client.
My personal bank gets very confused about our “relationship.” I frequently get letters from them that say “we have enjoyed our relationship …” but the reality is that I do not know a single person in my bank. Not a single individual. To be honest, when I need to go to a branch to deposit some checks, I tend to go to the ATM by the front door rather than the clerks. I certainly am not the only one—many times I have seen a line at the ATM while the clerks are standing in an empty lobby chatting with each other.
In advisory relationships, people represent the firm. The more involved and engaged those people are, the stronger the relationship. We can’t replace the person with the brand no matter how strong that brand is. As a result, we are tempted to rely and even over-rely on people and their talents. Advisory firms often talk about “intimacy” in their relationships with clients, implying that the relationship is one-on-one. Unfortunately, this means that the pendulum has swung too far the other way.
This has its own drawbacks. Picture a long line at the grocery store where the clerk is engaged in a very active and very long conversation with the client in front of them. This is great for the relationship but boy is it frustrating for the line!
The researcher and consultant Heidi Gardner studied the client base of a large accounting firm and published the results in her book Smart Collaboration. She found that 75% of clients who only had exposure to one professional said that they will leave the firm if that professional left. Conversely, 90% of clients who had relationships with multiple professionals in the firm said they will stay with the firm if their primary contact left.
Adding the firm to the mix helps retain clients for more than one reason. Gardner actually found in this and many other case studies that collaboration on a single client relationship improved also the ability to identify new opportunities for that client and the ability to handle complex issues. The net result is increased revenue for the firm generated from the “shared clients.”
The balance between firm and professional brand in the relationship with a client defines the firm. It determines the staffing of client service teams, the people who choose to join and those who choose to stay. The balance between individual and firm also drives the compensation philosophy of the firm and ultimately determines the size of the firm.
In Business Development
We often get e-mails from our website that say something like, “We are interested in working with a consultant.” Then comes a very important second statement—sometimes it says, “Could Philip reach out, we would like to talk to him.” Sometimes the message says, “Could one of your consultants get in touch with us.” The difference is of tremendous importance to us. One message signals that we still develop new clients as individuals, the second version implies we attract clients as a firm.
Every new client chooses a professional (advisor) and a firm that the professional is affiliated with. The two are always present in the decision even if one is dominant. It is entirely possible that the client only cares about the professional and is really not very concerned about the firm. The opposite can also be true—early in my career, a number of clients worked with me only because I represented a firm they trusted—Moss Adams.