Every IP firm and professional wants to grow their book of business. This usually entails initiatives to win more clients by increasing brand awareness, networking, speaking and writing and other business development activities.
It takes significantly more time, effort and resources to win a new client than it does to increase the revenue from an existing client, up to 5 to 10 x more.
Enter account-based business development
Client relationships are like any other relationships. They need attention to thrive. Every client wants to feel like the only client you have.
As a practical matter, once your client base is large enough, it won't be possible to give every client the same level of attention. Some clients will benefit from a monthly review while others a quarterly review, for example. Some will want to hear from you more often and others prefer to not be contacted regularly. You need a system to identify the clients, or accounts, that are key to your practice and have the greatest potential for growth.
Account-based management helps you focus your time, resources and effort on your biggest opportunities. When done right, account-based management can result in increased revenue and happier clients.
How do you know which clients should have an account-based business development strategy?
There are two types of clients that lend themselves well to account based business development. The first are high-value clients. The second are high-potential clients.
High Value Clients
To identify high value clients, we look to Pareto's Principle. This is a theory that states that 80% of any outcome comes from 20% of effort or input. This concept is commonly used in areas ranging from economics to time management.
For our purposes, using Pareto's Principle, we can assume that 20% of your clients generate 80% of your revenue. These can be identified by any performance indicator that is relevant to your practice. Considering, in particular, a patent client: tracking indicators could include, for instance, revenue brought into the firm, the profitability of the client, or the number of new files received in a specific time frame. This benchmark performance indicator will be dependent on the type of practice you have and the success indicators you track.
Whichever indicator you opt to focus on, you will want to follow a consistent model for identifying client and tracking progress. For these types of high value clients, you will want to at a minimum arrange an annual catch up meeting. But the relationship may benefit from more frequent personal contact, such at invitations to events or STATOY type emails.
These clients are important to keep happy owing to the impact their loss would have on your practice. They may already be sending you all the work they have and it is work you want to keep receiving.
But have you considered how you might be able to leverage these relationships to grow your practice?
By asking for introductions and referrals. A loyal, happy client is more likely to provide a credible referral.
If the client is happy with you and your services, they may be likely to be happy to suggest you to others. Make the ask if they know anyone or can introduce you to anyone that may benefit from your services.
Identifying high-potential clients requires a little investigative work. The idea is to identify clients that have more billable work to offer than you currently are receiving. There are two ways to approach this.
One type of high-potential client is the client that is funneling work to more than just your firm. The idea here is to develop the client relationship so more, or ideally all, of their work is being directed to you. For example, does a foreign associate send patent filings to multiple firms in your jurisdiction?
The other type of high-potential client is the one where you could provide additional services that are in their best interest and they are not even aware that they would benefit from this work. These are clients that could benefit from other firm offerings or additional service lines. When you can provide more value in the form of billable work to a client, this will lead to increased revenue. For example, has a corporate client acquired a new business and do they require additional services that you offer?
Keep in mind, that these high potential clients might currently be relatively smaller clients but have the potential to become high value clients by bringing in additional work.
All of these types of clients are suitable for an account-based approach to business development.
Time to strategize
Once the clients of focus are identified, a strategy for each client can be developed.
These clients have been singled out for a reason and they require a more targeted and strategic approach for growth. So how do you create an account-based business development strategy?
You want to start with putting together a team that is focused on that client. There should be a lead (every ship needs a captain) and team members. These would be selected based on the service lines and experience as appropriate. You may want to also consider diversity options which is proven to result in stronger, more creative teams.
So for example, if you are targeting a patent client and trying to get their trademark work, you team should include an appropriate professional from the trademark department.
The team should be an appropriate size, as well. It's important to include enough of the right people, but the team should also not be too large to keep the team dynamics effective. Three to five people can be ideal.
Once the team is assembled, the team should work on developing a profile for the client. Consider the parts of their business you service and those that you don't. Who are the key players and do you have a strong relationship with them, and if not, how can you improve it? How is the current level of client service? Do you need to conduct research into the client's business/tech area?
From there, start brainstorming ways to approach the client beyond merely servicing their needs. You will want to leverage your knowledge of the client in approaching the client.
Put in some effort to make the client feel important. This can include social acts like treating them to lunch or inviting them to an event.
Ideally though, your approach should be more valued added. Show the client you care about them by thinking about their business needs. For instance, have you noticed that their IP portfolio is weak on design rights? Consider how you can help strengthen the protection and approach to discuss with them. Even if they do not proceed with the additional work, you have strengthened the relationship and bought some authentically-earned good will.
Useful tactics to employ
Account based business development is based on identifying areas that you can provide real value to your clients. There are a few tactics that can be used to ensure you are offering services that the client truly needs.
Include the client in this process and ask them questions - Access to the client is an advantage that your competitors cannot leverage.
Keep the offering relevant to the client's business - make sure your offers truly benefit the client.
Provide targeted solutions of appropriate scope - be realistic and make it easy for the client to say yes.
Be transparent with the costs, risks and benefits - communicate clearly and accurately so that the client can make strong decisions.
Be proactive, not reactive
An important step in an account based business development system is to monitor progress and success. The team should meet on a regular basis and action items should be assigned and followed up. Performance indicators should be monitored to identify trends.
The strategy may need to be adjusted from time to time based on current data. For example, if it seems the client could benefit from another service line not currently being offered to them, you may need to update members of the client team. This will require you to keep the client profile, data and research up to date. This can be accomplished by setting up a Google Alerts or by scheduling regular searches.
Firm or practice growth does not only stem from winning new clients. Account based business development may be suitable for certain clients that require a a focused approach. This type of approach can help you develop business from an existing client, which provides a genuine service to the client and increasing revenue for your business.
By continuing to monitor the client, adjusting your strategy and adapting your value offering in line with their evolving needs, you can grow your practice without needing to find and court new leads.