Pros and cons of starting a client network
Is it worth the trouble to run a formalized client network if you are a professional service firm like a law practice or consulting firm? Here are five reasons you should, and three why you shouldn’t.
Relationships are the most important business generator for most professional service firms. With an established client base, your company sits on a pile of gold. I know a lot of thinking goes into how to mine this resource more effectively. A client network can take many forms, but what I am talking about here is some form of network with invited members, who meet regularly, and who you expose to ideas and relevant group discussions. Over time ideally the network will form relationships both among participants – and with key people from your organization.
Done right it can be very valuable, but it does take considerable effort in terms of curating and recruiting participants, scheduling and planning events, and making sure everybody is happy. Getting a new client is much more expensive that upselling an existing one. Retention has a much higher ROI than newbiz. But is it worth going the extra mile and offering your clients a more formalized network opportunity run by you (or by a trusted external partner)?
Let’s examine some of the benefits:
#1: Knowledge is power
If you are used to having a lot of one-to-one discussions with your clients, you will be surprised at how the dynamic changes when they are in a room with their peers. You are creating a setting that is not a beauty contest, not a negotiation, not a business transaction, but a space for learning, inspiration, networking. If you bring the right people to the playground and make sure there’s an atmosphere of trust, you will learn a lot more about your client, their pains, and their mindset, than you will from any RFPs they might have sent you over the years. Understanding your client, their psychology, and even their response to the ideas of others, is extremely valuable.
#2: You become a catalyst for value creation
When working with clients, the onus is on you to solve their problems, to add value, to shift things forward. Bringing the right people together is a way of unlocking synergies and creating value as a facilitator rather than as a provider. This has an exponential potential for both you and your clients, but it requires that you are willing to relinquish a bit of control, and that you can comprehend of your own role in a different way. Making this happen is an art, but if you do, chances are a lot of that value and stardust will also land on your head.
#3: Generosity looks good on you
Extending an invitation is as ancient as human social interaction itself. Being generous and sharing your knowledge and reach with others is a great look on most organizations. Also, it is human nature to want to reciprocate, so eventually karma will come back and reward you. My mom always told me: Tell me who you associate with, and I’ll tell you who you are. A vibrant and impressive network under your name will add to your company’s brand value and not in a cheap way.
#4: You are power charging key employees
This I fear will be controversial. But client networks are also a way of plugging in your own people. Their network is your strength as a company. The more connected your people are, the better they will be at making connections and ultimately business. And if you are telling me that this is a double-edged sword, because it will also increase the risk of them one day jumping ship, you have a different problem all together. Regardless, if you do harbor that fear, a client network is actually a better way of going about external networking, because you will have more control as a company, and your can ensure that the loyalty it generates will be to the firm first and foremost.
#5: Relationships give you a leg up
At the end of the day, having a deeper and more personal relationship with your clients will mean something. And why shouldn’t it – if I’m hiring someone to help me fix something, wouldn’t I rather it be somebody who understands me? Who wouldn’t need as much onboarding? Of course. It will not do the work for you, but it will reveal doors you wouldn’t have seen and help your open them with great success rate. And as an added bonus, it will probably also make the job funnier, because it is typically more rewarding to work with somebody you know and like, and where you are able to follow them after the engagement and see the lasting fruits of your work.
Three reasons not to formalize a client network
I am probably a bit biased in this, because I happen to believe that a client network, when done right, is a great tool for deepening relationships, increasing client retention, and generating meaningful and valuable business, but I recognize that it is not for everybody. Here are three reasons to consider before jumping on board:
#1: It’s not about selling
At least not in the short-term. Nobody wants to sign up for that and you should quell any over-eager aspirations to turn network events or meetings into a sales-pitch. Don’t even try to sneak it in. Client networks work best when they are deeply embedded in your organization and not just run by marketing or salespeople (who can be absolutely great allies and resources for the client network by the way). If your best client-facing people and most imaginative problem solvers don’t have time to participate, you will not reap all the benefits of having a bunch of clients in a room with you on a regular basis.
#2: Don’t do it if you don’t mean it
Harvesting value from a client network takes time and patience, and you need to be willing to commit the necessary resources. If you expect immediate results, you should try something else. A way to account for this challenge is to have a clear plan for where you want to take the network. And you should engage the participants in this so that they have a say and ownership of the masterplan. This will help keep focus and will also be much more motivating for both participants and your own stakeholders.
#3: Be prepared to lead, not just manage
Mixing clients is inevitably a loss of control. What happens if there’s a conflict between two participants? What if the network wants to go in a direction that does not resonate well with the company’s overall focus or strategy? What if, what if. If you are too much of a control freak, don’t go down this route. A vibrant and value-creating network needs a lot of management. Not just around each meeting, but consecutively. But you need to realize that you cannot manage everyone completely. This is where leadership comes in. The difference between a great group and a mediocre one is often down to leadership. How to lead is a story for a different article, but make sure you have someone who can and wants to take on that challenge, otherwise your client network runs the risk of fizzling out after a couple of meetings. Often, leadership involves going out on a limb, and taking a bit of a personal stand. If this sounds like something your company would be terrified of, then think twice.
Now’s a good time
Why are we having this discussion in the first place? Well, because now is actually a great time to consider this. Covid has shown how a lot of professional service firms have managed to continue serving their clients virtually without a hitch. Many teams in fact have experienced increased productivity because they save time on travels and small talk. But the pandemic has also shown the limits of virtual business interactions: Zoom is not as good as in-person for creating relationships, building trust, and exploring ideas and opportunities that are not already on the agenda. And there’s a need and a desire out there for inspiration, deeper as well as broader professional relationships, and quite simply for meeting other human beings and having adult conversations that are not about homeschooling or mask mandates.
Tell me your experiences
I would love to hear any experiences with client networks or company networks in general – both good or bad either as a comment or as a direct message. Are you considering this for your company? If not, what is holding you back? Do you agree on the benefits? Please feel free to connect if you want to discuss further.