Take a Look—Client Relationships: Get Practical / Get Profitable

01.01.02
By Deborah McMurray
Published in Strategies: The Journal of Legal Marketing

Look outside the legal industry for tomes that discuss client loyalty. (If you want the best gauge of loyalty, don’t measure client "satisfaction." Studies show that even "satisfied" clients fire their law firms.) HBR OnPoint is a series of booklets packaged by topic by Harvard Business Review. They cover most management, sales and marketing maxims about which we’d care. "Profitability: Fuel yours with High-Octane Customer Loyalty" is worth buying. You can order it from hbsp.harvard.edu/hbronpoint.

One article suggests dividing clients into four categories—loyalist/apostle, defector/terrorist, mercenary, hostage. Yes, the war metaphor might be extreme, but isn’t the battle for clients one that our firms wage every day? Compare the loyalist/apostle whose satisfaction is "high," loyalty is "high," and behavior is "staying and supportive" to the mercenary whose satisfaction is "high," but his loyalty is "low to medium" and behavior is "coming and going; low commitment."

Take your top 25 clients by gross revenue and break them into these two categories to start. Your loyalists will be the most profitable and most enjoyable. Clients that fall into the mercenary category will be less profitable, perhaps MUCH less, and will wreak emotional havoc in your workplace.

The defector/terrorist has low to medium satisfaction, low to medium loyalty and his behavior suggests he is leaving and he’s unhappy. The hostage has low to medium satisfaction, but high loyalty—strange bedfellows? Not really. The hostage believes he can’t switch; he feels trapped. Perhaps he inherited the law firm from a predecessor or the decision to hire was handed down by the CEO or chairman. The hostage may stay with your firm, but the resentment will continue to build. The hostage won’t refer your firm inside or outside his company.

Now divide your top 25 revenue producers into all four categories. The challenge is altering client perceptions and attitudes about your firm in everyone but the loyalists. This may take time, but the financial and psychic benefits to your firm could be enormous. If the cost of doing business with a certain client (mercenary, defector/terrorist) is too high, consider firing them before they fire you. These clients are not loyal and may never be.

Deborah McMurray is a strategic marketing consultant to the legal industry. She can be reached at 214.351.9690 or mcmurray@contentpilot.net.

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