Required Reading: The Keys to Activating Customer Loyalty

Today’s professional services sector faces a sharp decline in client loyalty. The classic “trusted adviser” model can no longer survive rapidly changing client expectations.

In The Activator Advantage: What Today’s Rainmakers Do Differently, Matthew Dixon, Rory Channer, Karen Freeman, and Ted McKenna, business development experts and partners at training and consulting firm DCM Insights, introduce a strategy that empowers professional service leaders to win, retain, and grow client relationships, drive greater client engagement, enhance collaboration, and optimize growth and profitability. CRM editor Leonard Klie caught up with Dixon to learn more.

CRM: Why has the professional services sector faced a sharp decline in client loyalty? Why is the classic “trusted adviser” model no longer valid?

Dixon: There are several reasons for this. First, professional services have historically been an area of soft spend where procurement didn’t get involved, but that’s changed. Today, it’s much more common for firms to have to compete for work through formal purchasing processes—and, even when firms win these competitive pursuits, they are often required to deliver services under new, alternative fee structures like fixed-fee or outcome-based pricing. Second, clients have an increased appetite to knit together capabilities from best-of-breed providers rather than work with one-stop shops, which has brought in boutique and niche players that used to be outside of the consideration set. Third is the rise of alternative service providers that were once only used by clients for low-end transactional work. Then, when you add AI to the mix, it’s created a perfect storm, and the impact has been pretty dramatic.

Can this be turned around, and, if so, how?

Yes, absolutely. To find a new way forward, leaders should look to what their top performers are doing to adapt to the changing client buying environment and understand which elements of their approach can be replicated. Once these behaviors are isolated, the rest of the firm’s client-facing professionals need to be equipped to do what those high performers have already figured out. And then firms need to invest in the capabilities, from incentive and reward systems to business development and marketing support, as well as data, tools, and technology that nudge their partners in the right direction and support them to develop these new behaviors.

For the book, you conducted a ton of research. What were the most surprising findings?

There were really two big surprises for us. The first was that every one of the 3,000 partners we studied could be placed into one of five statistically defined business development profiles. These profiles are completely different from those in traditional B2B sales organizations. But the bigger surprise was that, when you look at how these profiles perform commercially, only one shows a positive correlation with business development performance. The profiles that most partners fall into, and the ones that most firms have historically pushed—including the trusted adviser—are negatively correlated with performance. Put another way, it’s not just that traditional approaches are unproductive; they’re actually counterproductive.

In the book, you identify five business development profiles. Can you give a brief description of each?

The five profiles are as follows:

• Experts: Reluctant business developers who take a very reactive posture toward clients. They focus on burnishing their credentials and branding themselves as leading experts in their field, assuming that clients will find them if they need them.
• Confidants: The old-school trusted advisers. They look to build a small portfolio of key client relationships. They try to build a moat around these clients by delivering great work as well as highly responsive client service. They pride themselves on the depth of their relationships, seeking to build not just business relationships but, ideally, personal relationships. By doing this, they feel they have created a situation in which it would be unthinkable for a client to go with a competitor. If they have additional needs, they should automatically call their confidant for support.
• Debaters: The sharp-elbowed, opinionated know-it-alls. Their approach is all about reframing client assumptions to create differentiation and help clients think outside the box This approach can be exhausting for clients.
• Realists: These folks focus on being extremely transparent with clients about fees, timetables, outcomes, etc., telling clients what they need to hear, not just what they want to hear. They don’t do this because they’re “Debbie Downers” but, rather, because they know every client has had at least one bad experience with a partner or firm that overpromised and underdelivered. So they seek to do the exact opposite. Clients appreciate the honesty in their approach but don’t love the glass-half-empty posture they take and wish these partners would focus more on what could be accomplished by working together.
• Activators: The super connectors of the professional services world. They are heavy users of platforms like LinkedIn and live events like firm-sponsored client meetings and industry conferences. They leverage their networks to harvest paid client work. They convert connections into paying clients by proactively bringing new ideas to them—new ways to make money, save money, or mitigate risk—before clients ask for help. They don’t charge for this advice but instead try to use it to pay it forward with clients, earn goodwill, and shape the client’s understanding of an issue or opportunity. Activators look to bring their colleagues into their relationships.

Of these, only activators actually drive growth. Why is that?

At the highest level, Activators really are doing three things:

• First, they commit to business development. Unlike most partners who aren’t comfortable selling, Activators have a metronomic, rhythmic consistency to their business development. They carve out and protect business development time. They know it’s extremely risky to assume current clients will keep coming back, so they work hard to build a pipeline of opportunity.
• Second, they connect broadly and deeply. They build and manage professional networks to provide a ready source of leads. They also leverage their internal networks to deliver client value, always looking to bring in other practice groups and colleagues to deliver more holistic solutions to the most complex client issues.
• Third, they create value proactively and on a personal level. They don’t wait for clients to call; instead, they get ahead of the RFP by bringing new ideas to clients, often before clients even recognize a threat or opportunity. They also seek to not just deliver business and trust value but to layer on top of these a dose of personal value. They think about the things that matter to their clients personally and ask how they can support their clients on these priorities, which often fall outside the scope of paid work.

What is the one main message you want readers to take away from this book?

Most partners have the mindset that they will deliver value to clients and build strong relationships with them after the client agrees to hire them. Activators do the opposite. They deliver value and build relationships before clients hire them. For an activator, paid work is simply the natural evolution of a relationship they’ve already built and value they’ve already delivered.