Retention of Hi-Value Clients is the only way forward in a 'Managed service' business. A 'Managed Service Business' is one where the Vendor has a Term contract for delivering the Service. Think of Industrial Food Service, Facilities Management, Air conditioning, Industrial Laundry Service etc. Think also of ATM implementation, POS machine and other Financial Services implementation etc.
Many of these require the Vendor to make upfront investment, with the promise of recovery over a longer horizon. The Pricing is skewed accordingly as well, with heavier part of the recovery happening in the second or the third years of a three year Contract.
The first and the most immediate challenge that arises is that the Solution in which you have invested so heavily and which the Client and their Eco-system thought was absolutely fitting starts appearing very jaded soon. The yearning for 'Novelty' kicks in. The pressure to try something "new" makes its presence felt. And very importantly, by this time the original issues that were plaguing the Client's business have started getting addressed and have reduced in severity.
Arrival of the Competitors in the scenario at this moment complicates matter further. Competition does its level best to "educate" and "confuse" the Client. Competition displays a tendency to de-value and commoditise your solution, with the aim of being able to replace it at some time.
Role of people
What is often missed is the role of the "People" in the DMU. Any change in people can really complicate things and bring in many more equations in to the picture. Similarly, a change in key people handling the Account at your end could also complicate things if adequate attention has not been given to this change management.
The only way you can retain a high-Value, progressive Client is by growing your 'Vision' of the Solution in line with the Client's Vision. Actively listening to the Client's growing needs and handling it in a progressive and agile manner is the way forward.
In fact, we have to learn to thrive on these "Change Requests". Ideally we should be able to listen and empathise with the Client's changing Need and understand its 'value'. This will give us a clue of how important the suggested change is for the Client and how we can best recover the same.
A systematic but agile and responsive approach to Client Retention is the basic solution. Our "Clients in Perpetuity" framework is built around the 5 Pillars of Transparency, Inspection, Adaptation, Openness and Professional Competence.
Though it's a simple Framework, it is meticulous in its approach to systematic work.
It enables the Service Team to create structures where the Client is mandated to work together with the Vendor Team to Review work.
In. a VUCA world, agility in thought and Action are the only possibilities.
We believe in it as we find repeated success in it.We would love to share it with you and your Teams that are engaged in the task of retaining and growing Client business.