Evaluating your client base is imperative to growing your business. So, be sure to review the objective and subjective criteria mentioned in our previous blog, “Start Evaluating Your Clients NOW!” to identify what is important to the management team before proceeding with the client evaluation process. Once the management team has agreed on the importance, then it’s time to start using the data to boost your business growth.

Criteria to Consider

If you started evaluating your clients by simply the database in order of highest revenue, you may not get an accurate account of the value of each client. Revenue is normally one of the criteria utilized when evaluating, but not the primary one. Check out this example of criteria utilized by one professional service firm when ranking their clients (they used A, B, C and D to show their four levels of clients):

The firm started by asking these questions during a management team meeting:

  • On a scale of 1-10, rank the client’s
    • Attitude in dealing with the firm
    • Potential to grow
    • Current relationship with the firm or firm members
  • Using only a yes / no response, answer the following:
    • Do you / the team enjoy working with this client?
    • Is the client open to suggestions / changes?
    • Has the client referred business to the firm?
    • Does the client fit into a niche industry / service area of the firm?

Understanding the criteria or areas of importance to the management team helped the team focus less on the revenue the clients have generated for the firm and more on the ways the firm wishes to grow and prosper with strong, growth-oriented and dynamic clients.

Work with Clients You Like

In any industry, the importance of knowing which clients are profitable, give quality referrals and are overall “outstanding” clients is key.  Jennifer Wolfe discusses why firms should “Keep the Customers Who Are Worth the Effort.” By connecting her law firm to the movie, Jerry McGuire, she shares how imperative loyalty is versus money. I agree – and also think that the movie Moneyball would also be a great example.

Now What?

It’s time to begin the process! Once the meeting has taken place, dive into what it means to grade and eventually fire some of your clients. The following 7 steps can help guide the process:

  1. Involve every team member in the process
  2. Have each individual who interacts with the client complete a questionnaire (sample: Client Assessment Tool).
  3. If necessary, team members can skip questions that area not applicable to their relationship to the client.
  4. Collect all the data and begin reviewing openly.
  5. Develop a report that is sorted by the lowest scoring clients to the highest scoring (or your firm’s best) clients.
  6. Share and discuss why clients ended up where they did and develop a plan for next steps (if it’s a client that is worth saving, build a plan to do so, if they need to be fired, do so!)
  7. Remember there is no wrong answer – it’s just data collection – in order to find the clients who are “worth the effort.”

For the criteria items that are firm-controlled (pricing / cost structures, staffing / employee conflicts, schedule breaks, etc.) review carefully, but never hold them against the client.

Make the Process Manageable / Attainable

The sample criteria and evaluation form shown are merely to help you start the process. While assessing clients may be a cumbersome process, there are a few ways to make it manageable:

  1. Start with the top 10% of your clients
  2. Break the client list into industry / service areas
  3. Focus on the problem clients first (low revenue, bad attitude, poor ambitions, etc.)

By documenting the process and keeping it simple, a true client assessment will prove useful to your firm’s growth, to your employee satisfaction and to being more proactive with the clients you love.

Need help with facilitating a meeting that discusses the touchy client evaluation process, we can help!