Andrew Sobel: Client Loyalty

Andrew Sobel is a consultant and a thought leader on the subject of client relationships. Sobel has spent more than twenty years advising senior executives in more than thirty countries. He’s the author of the bestsellers Clients for Life, Making Rain, and All for One.

McLaughlin: In today’s market, some people say that client loyalty is a myth. Do you agree?

Sobel: I don’t think client loyalty is a myth, even in this tough market. The reality is that many clients are working with consultants to whom they are extremely loyal. In fact, I believe there is a client loyalty formula.

To understand what drives client loyalty, you have to look at why some clients, even in a very competitive market, continue to be loyal to their best consultants. In my research, I interviewed corporate executives and CEO’s to find out what characterizes the consultants they stick with through thick and thin, and why.

What I learned is that client loyalty boils down to three basic factors: first of all clients in this market are loyal to people who continue to add tangible value; second, they are loyal to the people with whom they have built trust; and, finally, they are loyal to the consultants who go the extra mile for them, who really care about them as clients.

These ideas may sound simple, but each has subtlety and complexity.

McLaughlin: How would you define tangible value?

Sobel: In terms of adding value, you have to go beyond the core value of the contract, beyond what the client contracts with you, the consultant, to deliver. That core value could be cost reduction, a new marketing strategy or re-engineering the supply chain, for example.

But, there is something more that I call surprise value. Client loyalty increases when you add value in ways that clients don’t expect, when you make them aware of problems and issues that perhaps they didn’t even know they had. So maybe you are hired to do a cost reduction project, but you end up making some insightful recommendations about organizational structure. You see the big picture and keep your eyes and ears open. You bring clients surprise value and they say, wow, that was really helpful.

McLaughlin: Do you think consultants put enough emphasis on surprise value?

Sobel: Some consultants don’t deliver much surprise value because they are content to do what Tom Peters calls a thoroughly professional job, but no more. To me that shows a lack of creativity–the client has hired us to do X, and we are going to do it. I also think that a lot of consultants don’t provide surprise value because they are, in my terminology, the classic expert for hire, rather than a client advisor; they hew too narrowly to their specialist expertise.

Clearly, you’ve got to stick to what the client hired you to do. You don’t go in there and say well I am here to do everything. But there’s a value mindset: I am hired to help my client reorganize and I am going to do a great job at that, but my overall outlook is, how can I help this client in whatever way possible?

McLaughlin: Are there other kinds of value that a consultant can add?

Sobel: Yes. Consultants should add personal value. Every client who works with a consultant has a personal agenda. I don’t mean that in a Machiavellian sense, but clients have hopes, goals and fears, and we need to understand their agenda.

For example, a client may want to learn some specific methodology from your firm, or have you come in for a day and showcase some best practices. Another client may have a relative who is interested in going to your alma mater, so you agree to lunch and do some college counseling.

Some clients like to feel important. When they call your office, they want to be recognized by your support staff. This might seem trivial to you, but it might be important to a client. I think we always have to look at the personal goals, ambitions and hopes of our individual clients because we may be able to provide them with that personal value.

The total package of value goes way beyond whatever contract you sign with clients. When clients look back at consultants they have worked with, they won’t necessarily be able to articulate it terms of added surprise value. But they might say, not only did you do a great job at cost reduction you also really helped us think though implementation.

We glibly talk about value added and exceeding expectations, but to drive client loyalty, you need to break down and understand the specific value that clients derive from working with you.

McLaughlin: What role does trust play in improving client loyalty?

Sobel: Many corporate executives I interviewed said trust is paramount, and that they felt let down, disappointed by the false promises and claims made about products and services in the past.

People feel uneasy about all the corporate scandals, which involved not just corporations but service providers, accounting and consulting firms. They are concerned that professionals may not be representing themselves properly.

Executives have been telling me they only want to deal with outside professionals, including management consultants, who adhere to the highest ethical standards, who have the highest level of integrity.

So clients want to work with professionals who represent their capabilities honestly. They also want you to care about their work and their organizations. Trust has always been incredibly important, but I think it’s even more important in the current climate of uncertainty.

McLaughlin: One thing that can increase clients’ trust is to reduce their risk in working with you. Any advice for how consultants can reduce a client’s risk without sacrificing profitability?

Sobel: Think creatively about reducing a client’s uncertainty about working with you. One simple thing is over-investing upfront in face time with a client. Instead of the usual–they call you and ask for a proposal, you go to a meeting, write the proposal and send it to them–invest in more meetings and more face time, because familiarity breeds trust.

Secondly, use flexibility in structuring projects and pricing. I don’t recommend discounting as a strategy, but be flexible. For example, take a large project and break it down into pieces with checkpoints for each piece.

Another way of reducing a client’s risk is through references and testimonials. Sophisticated clients often do a good job of checking references, but the more references and testimonials you can give a client the better.

I frequently ask clients for testimonial letters, just a couple of sentences talking about the work I did with them, whether it was a workshop, a speech or a consulting assignment. I’ll ask if they mind if I share these with a perspective client, and they say sure. Sometimes I’ll get an inquiry from a company and maybe they’re not sure about taking the next step. I’ll email them scanned copies of a couple of letters and say here are some testimonials from clients in your industry that I worked with in the last year.

McLaughlin: You said that client loyalty improves when the consultant goes the extra mile. Can you give some examples?

Sobel: For one client, going the extra mile could be the fact that you returned from your vacation a day early to attend a critical meeting; or the client might know that you and your team worked all weekend to get something out for a board meeting; it could mean that they know you put in some extra work and you didn’t come back to them with the usual change order. The extra mile is the client’s perception that when the chips are down, when I really need these people, they will be there for me.

We can teach people how to add value and about the mechanics of building trust, but no one can teach us to really care about clients, to be willing to go the extra mile for them. That’s a mindset, almost an emotion, and it’s really important to clients. In the past, there was so much demand for professional services that people were turning down clients left and right. I know consulting firms, PR firms, and law firms that started to treat clients very offhandedly. That attitude is coming back to haunt us. We aren’t sitting at the fax machine waiting for the orders to come in these days.

McLaughlin: Changing to another subject, do you think consulting relationships pass through stages?

Sobel: Yes, I think they do. I talk about four stages for consultants to assess where they are with clients. I call stage one breaking through with a client: The client has a problem and views you as an expert who can fix it; you have anywhere from three weeks to six months to prove yourself. You have to ask yourself what you need to accomplish in that proving period for clients to pull you into their trusted inner circle of advisors. Obviously, the core of breaking through is that you’ve got to do great quality work on the specific task they have asked you to address. But, to me, that just gets you in the game.

McLaughlin: Any tips for how a consultant can break through with a client?

Sobel: Sure. A classic way is to re-frame their issues. The client says I’ve got an organizational problem and, after analyzing the situation, you say no, you’ve got a strategy problem, or the way you have defined the issue isn’t the most productive way to think about it.

Speed is another way you can break through, speed and responsiveness. Move faster, get it done faster than the client had imagined was possible.

Creating an emotional bond with the client is also important to break through. Instead of having that arms-length-expert-for-hire relationship, really connect with the client using your powers of empathy. I have had consultants tell me that a relationship with a client didn’t really start until they had their first big argument. You’ve got to make an emotional connection with the client. Otherwise, you are just a vendor.

Providing unique information is another way of breaking through. That could be information about the market that the client hasn’t seen before, or it could be information from your proprietary database. You might know some key players in the industry and are able to provide intelligence to your client.

So in the early stages of a relationship, you demonstrate that you will do more than just perform on the deliverables and add the core value.

McLaughlin: Are there new objectives after breaking through?

Sobel: You want to move from being a steady supplier–doing one project at a time–to become part of the inner circle. Just because clients give you projects doesn’t mean they actually care that much about you or that you are privy to their innermost thoughts and issues. You can go along for years in a steady supplier relationship. The margins might be good and it keeps people employed, but there isn’t a lot of soul to it because you’re not really connecting at a high level with clients.

To grow a relationship from being just a steady supplier to something more, you need to get smart about networking with buyers in the organization, as opposed to just investing time on the project itself. Once you are working with a client, you have a great opportunity to get to know those other buyers.

You have to look for ways to help your clients with additional, broader issues. So the goal is to grow relationships, as opposed to being complacent and just being fed projects, which many consultants seem happy to do.

McLaughlin: Once you’ve established strong client connections, what’s the next challenge?

Sobel: The next challenge is to keep relationships alive over multiple years. There is a complex stage of a relationship that I call sustaining, and it applies equally to past and current clients.

A famous Jesuit priest in the 1600′s named Baltasar Gracian used the phrase brand-new mediocrities, which fits the situation some consultants face. Gracian said that it’s human nature to crave variety. Sometimes when people get to know you too well, they get tired of you and become open to brand-new mediocrities–others who aren’t as good as you, but seem newer.

I have a simple rule to head off the problem of brand-new mediocrities: you have to treat every old client like a brand new client; you must go to even the 100th meeting with a client with the same enthusiasm, the same freshness and creativity that you had for the first meeting. When you were wooing the client, you were at your best. If the client senses 100 meetings later that you are getting complacent, that you’re not coming up with many new ideas, that client may be more open to replacing you with someone else.

McLaughlin: Many consultants struggle to keep up with former clients because they’re so busy serving current ones. How can consultants stay on their former clients’ radar screens?

Sobel: Consultants tell me that staying on the radar is one of the hardest things for them to do because the day-to-day pressure of delivering on current work is so high now that to make time for the letters, calls and visits is very difficult.

McKinsey & Company consultants understood this issue decades ago. They were among the first consultants to really focus on sustaining relationships, getting out there every three to six months, having dinner with past clients and staying on the radar screen.

A client might have worked with you five years ago and really liked what you did. But when a new problem arises, if he hasn’t talked to you in five years, it’s human nature for him to pick up the phone and call the guy he had lunch with three months ago.

I recommend that you make a core list of the relationships you want to sustain over time. The number will be different for each consultant, but maybe it’s ten, twenty or fifty core people that you talk to, visit or send articles and books to once or twice a year.

Then you have your non-core group, which might be 100 or even 1000 people, and maybe you send a Christmas card or your newsletter to those people. All that is part of sustaining relationships.

McLaughlin: What’s the fourth stage in client relationships?

Sobel: The fourth, or final, phase is what I call multiplying, which is about how you get your best clients to help you grow your business and to expand your ideas and influence. Multiplying involves some simple things like asking for referrals and introductions, being proactive. A lot of us are very shy about doing that.

I think we are afraid that we are going to ask a client and they are going to look at us and say what are you crazy? As an example, I worked with one consulting firm that decided to initiate my suggestion to call past clients. I said if all fifty of you each call five past clients that’s 250 phone calls, and who knows what might come of it. They said, yeah, that’s a good idea. When I checked back six weeks later, nobody had made one call!

So we had another workshop and I said let’s pour our hearts out–why hasn’t anyone made a call? We wrote up all the reasons on a flip chart: I don’t know what to say; people are going to hang up me; people will think I’m trying to sell them something; it’s going to be awkward; why would they want to talk to me?

After some role-playing, people realized it wasn’t so bad and they starting making those calls. And, they brought in a bunch of new business. You may get a brush-off from ninety-nine people you call, but all you need is one person who says yeah we could use your help for the effort to pay off.

McLaughlin: Thanks for your time.

You can find out more about Andrew Sobel at www.andrewsobel.com.

You might also be interested in these interviews:

Andrew Sobel: Building Client Partnerships

Andrew Sobel: The State of Client Relationships

Andrew Sobel: Writing a Business Book