Andrew Sobel
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: 10 Strategies for Building Trusted Client Partnerships.
We asked Sobel how we can use his market-tested strategies to deliver extraordinary value to clients and achieve personal satisfaction and profitability for our businesses.
Interview Summary: What Does All for One Mean?
“The title All for One captures the need to mobilize the right people, ideas, and resources from wherever they may reside in your organization—the all—into each client relationship—the one. The one, of course, could also be the individual relationship manager who must be supported by his or her entire firm.”
Excerpted from All for One, by Andrew Sobel
McLaughlin: In All for One, you say that service providers have unprecedented opportunities for partnering with clients. Could you elaborate?
Sobel: Sure. One recent trend is that many clients are consolidating the number of service providers they use. Some multinationals are moving from using a dozen or so consulting firms to just three or four. This trend, by the way, is prevalent for all sectors in professional services, including accounting, law, advertising, financial services–you name it. A second trend is that clients want for more value for money–especially in this tough economic environment. They want to see a better return on their investment.
On the supplier side, consulting firms are struggling to create a whole that is greater than the sum of the parts. To add more value, they have to get much better at mobilizing the right people and ideas into each client relationship. They absolutely must do this to justify their overhead, which in some cases now supports a sprawling array of office locations, practice groups, and functions.
McLaughlin: You talk about six levels of client relationships, beginning with Level 1 and then progressing toward more trusted relationships. What is a Level 6 relationship?
Sobel: To achieve a Level 6 relationship, you progress from trusted advisor (Level 5) to trusted partner. I interviewed many clients about this, and here’s what they would say about a Level 6 relationship with a services firm: “We view the firm as a long-term partner in growing our business. They’ve built strong relationships with people throughout our organization and they consistently add substantial value. We feel we get the best the firm can offer.”
You don’t build a trusted partner relationship by being an arms-length vendor. Usually, it’s a multi-year relationship that goes beyond a specific project or program, and the client buys a breadth of services from you. You move from agenda reacting to agenda setting. You build many-to-many relationships at multiple levels. You devote dedicated resources to the relationship. You add value for the client along a variety of dimensions.
For example, a client might say it’s not just that you did a great job on our cost-cutting project, but working with your firm enriched the capabilities of our executive team. Or an executive might say the program we worked on together really helped my career.
McLaughlin: What’s your sense of the market demand for Level 6 relationships?
Sobel: When it comes to the potential for Level 6 relationships, there are three types of clients: Those who don’t build them; those who do; and those who might.
Some clients probably won’t ever seek these types of relationships; but you can still have good commercial relationships with them. Other clients really do like and pursue these relationships. And then there’s the middle ground of clients who might want to go there; you’ve got to work to show them how it can be done.
My view is that the market demand for trusted partner relationships is quite elastic—with the right investments and creativity, you can create them. Obviously, it’s a question of first identifying the right clients. And then you have to employ the various strategies we’ve been discussing.
McLaughlin: What elements does a firm need to have in place to facilitate an effective relationship strategy?
Sobel: A firm needs a culture that emphasizes two broad themes: Collaboration and client focus. You have to draw the right people, ideas, and resources into client relationships. To do that, your firm must have a collaborative culture that is characterized by an ineffable set of values and behaviors. That is, people really want to help each other and they want to do what it takes to make client relationships succeed.
The firm’s culture must also be highly client-focused at all levels. One way firm leaders can set the example for that client focus is by spending more time out in the marketplace. If you look at large banks and accounting firms, frequently you will find that the CEOs and others in top management visit a lot of clients. In consulting firms, it’s less common for the CEO or a member of the leadership team to be out there meeting with 50 or 100 clients a year.
Sometimes, I think consulting firm leaders get too caught up in firm management. It doesn’t matter if you are a strategy firm or in IT outsourcing. Go talk with clients about their business issues.
Firm leaders must set the tone for collaboration and client focus with leadership and communication; they must be role models for the firm’s values. Other elements are also very important, including measurement and reward. But the first enabler of a collaborative culture is inculcation. That means imparting the firm’s values during on-boarding and training, and at firm meetings and all other instances when senior management interacts with the rest of the firm.
McLaughlin: In assessing the potential of a client relationship to develop into a trusted partnership, what’s the first thing you look for?
Sobel: I use a set of screening criteria to assess that potential, which starts with relationship orientation. I ask questions such as, does this client or might this client build Level 6 relationships? Does the client have a history of establishing such relationships with outside service providers?
Second, I like to know if there is a senior client who wants to make a difference in the organization or the industry. Third, is there a capabilities matchup? Is this client’s need really in the firm’s sweet spot? Obviously, you also have to consider revenue potential. So you would want to know if the client is buying the kind of services you offer. What are the ongoing, multi-year revenue possibilities?
And then, do you have existing relationships you can leverage in the client’s organization? Starting from scratch is a lot harder than working toward a deeper relationship with existing clients that have potential. Next, how entrenched is the competition? Would you be going against a headwind? You might be up against a decades-long relationship the client has with another firm, and that could be very difficult to overcome.
Another factor that may be relevant is risk. Is there some company-specific risk with this client that leads you to believe that maybe you shouldn’t put so many of your eggs in this basket? Those are some of the typical criteria, and you can score a client on them.
McLaughlin: Let’s say you pursue a trusted partner relationship with a client and bring all the right resources to build it. How do you know if and when you have achieved your goals for that relationship?
Sobel: I think the ultimate litmus test for a client relationship is the quality of referrals that client provides. Will the client actively recommend you to friends and colleagues? In the end, we all want clients that will give us referrals. If you boil it down to a single test, that’s the critical one.
Another important question is do you have a seat at the table with this client? When they’re talking about tough issues or planning for the future, do they consult you and want you and your firm to participate in those discussions?
McLaughlin: Client relationships have cycles, with good years and bad ones. How should firm leaders think about those inevitable cycles?
Sobel: Trusted client partnerships represent a long-term development effort. Therefore, you must have a long-term perspective. You also have to syndicate the risk. By that I mean you can’t put the onus on a single partner or a single relationship manager and say you sink or swim on this–at least certainly not in the developmental stage of the relationship.
A trusted partnership may not necessarily grow 30 percent every year. In the early years, it may very well grow at that rate, but you may reach a more mature phase and the metrics need to take that into account. So you’ve got to be careful that you’re not beating people up to constantly increase business with that client.
McLaughlin: If you do identify an opportunity to build a trusted partnership, where do you start?
Sobel: Obviously, it depends on whether it’s an existing client or new one. But generally speaking, I think you need to start by creating a very strong point of view about the clients’ future success and how they can do a better job on particular problems or issues.
That is what I call agenda setting as opposed to agenda reacting. You’ve got to invest the time, energy, and resources to go beyond a basic understanding of the client’s business. You’ve got to develop that point of view because that’s how you’re going to engage senior management.
Second, I would identify the executives, the decision makers, who are ambitious and motivated and want to make a difference. And I would engage those people around their agendas because you’re not going to create a trusted partnership with a weak executive.
Third, you must make that client a focal point for your organization or team. Trusted partnerships are as much about focus and investment as anything, and you’ve got to make sure that your colleagues agree to invest in specific client relationships.
Trusted partnerships need a pretty big stage. They’re not built on little problems, but on important client issues. It doesn’t have to be on your first project with a client, but if you can’t eventually engage with the client on a major issue, you’re probably not going to get to Level 6.
McLaughlin: During the research for this book, what surprised you?
Sobel: What’s fascinating to me is why more firms don’t pursue the opportunities trusted partnerships can offer. And I think there are a number of reasons why they don’t, including the short-term pressure to close sales. It’s also the expert mindset and expediency over patience and long-term investment.
Another reason is that firms tend to be reactive and feel they must respond to every client request for a proposal. Responding to RFPs can be an entree into a company, no question about it. But if you’re spending most of your time doing that, you won’t have the resources to concentrate on building these trusted partnerships. I would say “no” to half the RFPs and double-down on the rest.
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 with him:
Andrew Sobel: The State of Client Relationships
Andrew Sobel: Writing a Business Book
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