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Another reader question

post # 466 — November 14, 2007 — a Client Relations, Strategy post

My question to you and all your website contributors;

What have been people’s experiences with the strategy of targeting only working with one client per industry sector and deliberately broadcasting to the market that that is your “modus operandi”? It’s a bit clumsy, but, for example- “We guarantee our clients that we will not work for their competitors, thereby preserving exclusively for our clients, the commercial advantage of partnering with us”

I know the applicability may vary with the type of services one offers, but do others have any thoughts on this approach?


Jim Donovan said:

It leaves you very vulnerable to the ups and downs of a cleint’s workload, and worse, you can be trapped by a dripfeed low level of work just to stop you working for their competitor.

We used to promise exclusivity, but rarely got the sought-for benefits. Now we are pitching vertical market expertise (and organised ourselves accordingly). It’s not only differentiated us from our generic competiotors, it’s enabled us to lift rates and get more complete assignments and longer term relationships with more stable teams. We’ve always had a good professional reputation, so our clients trust us to manage the conflicts and confidentiality issues.

So we only sign up for exclusivity if it’s outside our target verticals, and the longterm contracted stream of work is worth it.

posted on November 14, 2007

Jim Stroup said:

My approach is somewhat different, although with a similar effect: I maintain absolute confidentiality. I never discuss who my other current or former clients are, or who my prospects are. I don’t use my client list as a reference or marketing tool (I only discuss in general, non-ascriptive terms, the sort of work I’ve done in what industries of what general size and type in what parts of the world).

If word of mouth is going on in the background to bring work to me, that’s fine, but if one of my clients indicates that so-and-so referred them to me, I provide no verbal or other indication that they have a basis for doing so.

The result seems to be that I am able to get to the bottom of things a bit more quickly than I might otherwise. I also don’t have a lot of qualms from clients about who else in the industry I might be working with, although I try to be careful about that myself.

If I feel there might be a conflict, I make a “sanitized” disclosure to the prospect, indicating the general nature of the work I’m doing in a way that makes identification impossible. If the prospect wants to close the deal, before doing so I make a similar sanitized disclosure to my current client, then make my final decision based on their reaction.

I think the results have been excellent on a number of important levels, from client openness to various ethical and professional considerations. Moreover, it doesn’t really seem to hurt the marketing, either.

posted on November 14, 2007

John Corr said:

I suspect you are shooting yourself in the foot in terms of attracting more clients to your business (this comes from someone who takes a very similar approach to exclusivity in a sector once we start working on a client’s agenda).

The problem you may come across is the (perhaps unspoken) desire of clients that you have worked on lots of problems almost exactly like their’s. It’s a paradox, since clients always tell you that their set of issues are incredibly unique – and especially if they’ve not worked with you before – they need the reassurance that you have indepth expertise on sorting out their individual issue(s).

On a personal front, if you were waiting for a needed triple bypass surgery, even if the professor of throat operations offered to operate on you in the morning – you would turn them down. You would probably insist on an expert triple bypass surgeon to operate on you. In a similar way, you risk clients overlooking you for someone who has focused their market position on their specific issue.

You might think of marketing yourself as an expert on solving whatever is similar about the underlying issue(s) your clients have and signing up an exclusivity clause if and only if they insisted.

Best wishes John.

posted on November 18, 2007

Charles H. Green said:

This is exactly what Bain & Company did in the late 70s and early 80s, and it made them the highest-profit, fastest-growing major consulting firm in the industry for a number of years.

They combined that pitch with a few other related concepts. One was that their stated aim was to improve the competitive positioning of their client vis a vis its competitors, which therefore led to another concept, namely they should have access and entree to the client “from the board room to the shop floor,” since after all their aim was solely to help the client’s competitive position.

Say what you like, it was a persuasive argument to a great many clients. It had another interesting economic result, which was to essentially convert all time to billable time. If you were never going to work for anyone else, and everything you did was aimed at improving the client, then there was, by definition, no selling time. Hence no unbillable time. It was, for many reasons, but perhaps particularly that one, a recipe for very high profitability.

Implementing that strategy on a solo operator basis obviously is more complicated, and there are as you suggest many other factors to deal with, but–there’s one data point to say it’s not a dumb idea!

posted on November 20, 2007