Data highway: How to make effective use of key client information
In the second in a series of articles on key account management, Meirion Jones explores how to improve the use and effectiveness of client information
One of the most important components of a successful key account management programme is a firm’s ability to make effective use of client information. This includes:
- having a system in place to capture client information in the first place;
- interrogating the information to identify new, timely client development trends and opportunities;
- circulating the key conclusions quickly and efficiently to those members of the client team who stand most to gain from it; and
- crucially, taking action as a result.
When this system of information-gathering and processing works well, it is like a healthy circulatory system, pumping nourishment where it is needed and ensuring a fit, responsive organism.
All too often, though, a firm’s information circulatory system is sclerotic: information is distributed slowly and is of poor quality. The consequences of this for a firm’s KAM programme include an inability to capitalise on new business opportunities – or to anticipate and respond to client’s wishes – and radically impaired competitiveness.
Information vs understanding
One commodity that law firms are never short of is data. They groan with it: statutes, precedents, client bibles, know-how libraries, credentials, matter lists, partner billing information and so on. The research-intensive nature of the profession puts a premium on access to information and, as data-generation factories, law firms are second to none.
When it comes to the management of client information, however, this capacity is a two-edged sword. Volume is frequently confused with value; data is confused with insight.
Many readers, I’m sure, have asked a PSL or librarian (or business developer) for an item of client analysis, only to experience a sinking sensation when they receive a telephone directory-thick slab of papers containing every scrap of data about the company in question but offering little insight or intelligence.
Distillation vs accumulation
Analysis is a deductive process. It is distillation rather than accumulation. It involves interrogating data to identify underlying trends and connections. It involves having the courage and commercial nous to discard irrelevant data. It makes links between separate silos and synthesises these to expand understanding and insight, and to identify opportunities for acting.
As the visionary 20th-century architect and designer, Frank Lloyd-Wright, said: “Get the habit of analysis – analysis will in time enable synthesis to become your habit of mind.”
Essence vs kitchen sink
Let’s consider the use of analysis by looking at a practical example.
A global media conglomerate recently decided to appoint one firm from its EMEA panel to its elite global ‘premium panel’. Several leading European-headquartered firms were invited to submit RFPs explaining why they should be appointed. Every firm was a strong contender, offering cross-practice strength in depth and strong media industry credentials.
Several firms submitted impressive credentials statements highlighting the numerous relevant matters in which they had been involved, together with detailed biographies of their key team members. Unfortunately, this ‘does what it says on the tin’ approach was described by the California-based procurement head running the process as “well-meaning pabulum”.
One firm, though, took a radically different approach. Rather than assembling an exhaustive credentials statement it provided a summary, in table-form, of the client’s constituent businesses and of the key challenges facing each of them. These challenges included piracy, patent protection, outsourcing and the impact on their businesses of disruptive technology and distribution models.
Next, the firm highlighted the key strategic options facing the client in responding to these challenges and the most effective likely course of action in each case. Finally, the firm provided short case studies to illustrate its practical experience of assisting clients facing similar challenges and objectives. These showed vividly how the firm would assist the client in successfully pursuing its likely courses of action.
This was a resource-heavy piece of work, involving not just extensive desk research but interviews with leading industry commentators and sense-checking with informed contacts at the client.
Interestingly, the client partner heading the project reckoned that the time involved in preparing this response was probably no greater than the effort of assembling a detailed, all-singing, all-dancing credential response.
It also generated a fair degree of scepticism within the firm. The sin of omission in law firms is one of the most egregious and, instinctively, firms often choose to overload their RFPs with content rather than risk missing an important fact. The notion of dispensing with this approach altogether and adopting a short, client-driven, issues-focused document was seen by some partners as highly risky.
The firm was appointed to the premium panel.
Describing the submission, the procurement head said: “This was a world apart from anything else we saw. [It was] very persuasive. The firm’s focus on our business and the solutions they could offer is such an obvious thing to do. So why is it that this is the first time I’ve seen something like this?”
Focus vs broad-brush
The difference between these two approaches is the difference between doing what’s expected – which every major commercial firm in the world can do – and using a deep, informed, analysis-led approach to the client to express a compelling, differentiated value proposition. Exactly the same principle applies to the challenges of creating and maintaining an effective KAM programme.
Key client information takes two forms:
- internal – including who knows whom, billings and work history; and
- external – including the client’s organisational structure, business strategy and market position.
Simply put, the best-run KAM programmes follow the Frank Lloyd-Wright edict by synthesising this information rather than collecting it in separate silos. The following steps show how this process works in an ideal world (or ideal firm).
1. Investigate the underlying trends of the client’s industry
As we saw in our media conglomerate example above, an understanding of the world in which the client operates is important for anticipating the particular pressures and trends facing the client.
All industry sectors face similar challenges and opportunities – such as the global downturn and the rise of Asia – but they are also affected by industry-specific trends – such as piracy in the case above.
This information is readily available on the web – in investment bank sector reports, for example, via the vertical market press, even in the markets and sector pages of the Financial Times or Wall Street Journal.
Equally, conversations with individuals from within the client – such as the head of strategy or a senior economist – will prove immensely fruitful in helping to deepen the firm’s understanding of the client.
This information is not only important for developing specific client relationships but will also provide the basis of powerful and differentiated thought leadership.
2. Consider how well the client responds to these trends
Faced with the same strategic challenge, five organisations may respond in five different ways. The second step, therefore, is to understand which way your client, specifically, is going to jump.
Does the revenue impact of piracy on our media conglomerate, for example, mean that it will dispose of its music interests, mount a global anti-piracy campaign to shut down illegal downloading sites, develop alternative distribution channels by acquiring a specialist web provider, or seek safety by merging with a competitor to create critical mass?
By narrowing down the likely options, the firm can anticipate how the client is likely to act, and position itself as best placed to support the client.?
3. Know what your rivals are doing
A trap that firms regularly fall into is forgetting that the client has other strong adviser relationships. It is a monumental waste of effort to chase after a piece of work if another well-qualified firm is already in place to do it and enjoys a strong relationship with the decision maker.
The challenge is to identify where your firm can genuinely differentiate itself and this means taking a hard, objective and truthful look at the opposition.
4. Undertake relationship analysis
Even having determined how best your firm can help the client, there is still the major challenge of getting that message to the right people.
In a sprawling company like our media conglomerate, decision making is devolved to a large number of country-specific subsidiaries and their own legal and business heads. Assessing who from within the firm knows who at the client, how strong those relationships are, how senior those individuals are and what buying responsibility they have can be an enormous and tedious job.
However, it is also one of the most important of all pieces of analysis as it helps your firm to determine where it is going to focus its marketing and relationship-building efforts.
Implicit in this exercise is the recognition that client development, especially when dealing with a complex organisational structure, is a team effort. It may well not be the client partner or the biggest billers who have the best contacts.
In one relationship analysis exercise, it was discovered that the only lawyer in the firm with a strong relationship with the newly-appointed and incoming general counsel was a non-equity employment partner. She was involved in the client planning process, effected introductions to other members of the client team and effectively salvaged the relationship.
One further challenge facing firms is data integration. Most firms collect key client information in a number of locations – such as accounting databases, client relationship management systems and knowledge management systems.
A small number of the most visionary firms have strategies for consolidating these different buckets of information. A handful of those may have even done so – achieving that holy grail of synthesis cited by Lloyd-Wright above. As for the rest, this is a long way off.
As with so much about law firm KAM, fortune favours the brave. Those firms that are prepared to look to make a genuine analysis of client data, that obliterate the silos that prevent information from circulating freely, and then use this insight to shape their actions, are the firms that will genuinely align themselves to their clients.
meirionjones@me.com