There are a range of statistics around how important retaining clients is to a company’s bottom line. According to the Gartner Group, 80% of your future profits will come from just 20% of your existing customers. And Bain and Co say that a 5% increase in customer retention can increase a company’s profitability by 75%. So there is a clear case to be made for looking after your current clients and your market proposition plays an important role in this.
The best propositions enable your business to establish long-term relationships with your clients that deliver cumulative benefits to them and increasing revenue to you. By contrast, the weakest propositions only enable one-off engagements (sometimes known as “one and done”) with no opportunity for follow-on work.
The Holy Grail for long-term client relationships is to: analyze; change; operate. In other words, analyze a problem, change the environment, then operate the new process. Accenture are masters of this with their capability of managing entire functions for their clients in an outsourced model, often as a result of diagnosing the root causes of problems and improving the processes, systems and organization along the way.
When it comes to winning business from new clients, the best propositions enable your business to attract new clients based on a clear “right to win.” Consultancy cannot be easily tried before being bought, so the proposition must be true, relevant and provable so that clients have confidence in entering into an engagement with you. By contrast, the weakest propositions do not facilitate your ability to develop business with new clients.
Imagine selling $10 bills for $5 in the street. You wouldn’t have to be a world-class salesperson to attract many customers. Now imagine trying to sell $5 bills for $10 and see how good your sales skills have to be to sell just one. Your business proposition needs to be compelling and feel like the former to the client, so they feel they are getting real value.
Getting your market proposition right means that it will be appealing to clients you already have but also help you to continue to win new business. This should help your consultancy grow steadily and profitably, making it an attractive proposition to the right acquirer.
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