Editor’s Intro: One thing I learned fairly early in my market research supplier career is that the best business relationships are “win-win”: if we can make our clients look good, if we can help them demonstrate positive impact on their business through our research, it will lead to more business for us too. Unfortunately, I encountered too many people over time who never learned that lesson. In this incredibly important article by Simon Chadwick and Andrew Cannon, they discuss a process by which research companies and clients can create these win-win relationships by focusing on client ROI. This is well worth your time digesting and implementing.
A Recipe for Success in the Real-life Competition to Grow Key Accounts
Now is the time to act if you want to take the grand prize: 1-hour preparation time required.
We know that most of you are currently focused on closing Q1-19, with one eye on H1-19, and maybe half a thought for H2, but we are asking you to spend one hour of your time over the next few days to kick-start 2020. We can guarantee you a strong ROI on that hour spent.
You all know how hard getting new clients is, so whilst you need to keep feeding that funnel, we are offering you a 1-hour recipe to growing your business with your key clients before your competition eats your lunch.
So, are you ready to roll your sleeves and face the heat, or are you going to get out of the kitchen?
Step 1 – Digest the Rest of this Blogpost (10 minutes)
Over the past two years, we have interviewed, and worked together with, many client-side Insights leaders on the business impact of Insights. During the process, we have also gained a good understanding of the dynamics at play client-side when it comes to budgeting, which is one of the key factors determining whether your business will grow next year or not.
As an agency leader, you may feel that this is something which is outside of your control, but we want to convince you otherwise. True, you do not have direct control, but you have a huge power to influence your destiny when it comes to whether your clients’ budgets for 2020 will indeed grow or shrink.
Segmenting End Clients
We’re sure you already have a number of ways of segmenting your customer base. We recommend, however, that if you don’t do so already, you think about your clients in terms of the maturity-scale segmentation created by BCG, Cambiar and Yale. It gives an excellent summary of the end-client landscape and is an excellent framework, which you can use for segmenting your own client-base specifically from a budget perspective.
THE 4 STAGES OF MATURITY OF THE INSIGHTS FUNCTION
Why Segmentation is Important to You
If we combine stages 1 and 2 together and stages 3 and 4 together, and then analyze the key differences between these two groups, here is what we find:
The data is compelling:
As are the stories behind the data:
What Type of Clients do You Have?
For the purpose of becoming a MRX Master Chef, grab a pencil and spend a couple of minutes putting your key accounts into three buckets:
Now that you have an idea of where your clients sit on the maturity scale, you can implement a two-pronged strategy to deal with each type of client:
Strategy – Part 1: Moving Your Clients up the Maturity Scale
We hope you can see that you have a huge vested interest in getting your clients from stages 1 and 2 to stages 3 and 4.
Our research tells us that Building Business Impact is key to Insights functions moving up the maturity scale, but that few Insights functions are currently doing a proper job at both measuring and demonstrating the return on investment they deliver, which is central to building business impact.
So, why don’t most Insights leaders measure their ROI? The key reason is that it is not a straightforward thing to do, and most Insights leaders, therefore, don’t know how to go about it and how to get started.
Fortunately, GRBN has created a framework, which Insights leaders can use to measure and demonstrate their ROI, and has developed, together with Cambiar, tools to assist Insights leaders with implementation in their teams.
By giving your clients the opportunity to learn how to use the framework, as well as to learn from peers who are measuring their business impact, you will give them the keys to building a robust argument for growing (or at least defending) their 2020 budget.
You need to make sure that your teams do everything in their power to help these clients build that impact on a business decision level. Do your teams have the skills and tools needed to do that?
Strategy – Part 2: Forming an ROI Partnership with Your Stage 3 and 4 Clients
If you’re lucky enough to have clients in stages 3 or 4, you will be happy to know that their budgets are likely to grow (or at least be stable) next year and that they are likely to invest in innovation and experimentation. However, the chances are that you don’t have a monopoly with these clients, and your competitors are no doubt also looking to work more and more with these growth clients. So how do you grow your share of wallet?
From our discussions with Insights leaders in stage 3 and 4 functions, our conclusion is that an ROI partnership is an effective way to do this. These Insights leaders are looking to build their relationships with agencies they see as trusted advisors, and by extension concentrate more and more of their budgets on agency partners who can support them on their mission to increase the business impact of Insights.
So, What is an ROI Partnership?
At its core, it is a periodic review of the work you are doing for the client from a business impact perspective. The aim of the review is, together with each client, to answer 5 key questions:
- How much ROI did we help you deliver to the business during the period?
- What could we have done differently to help you deliver even more impact on the business?
- What should we do more of?
- What new services can we provide that will increase the amount of impact you have on the business?
- What should we do less of / stop doing? (i.e. activities, which are delivering a low ROI)
Done correctly, the ROI partnership will enable you both to help your clients grow their total budget and grow your share of that budget. As a bonus, it will enable you to more effectively sell in the new innovative tools and solutions your company is developing.
In addition to the periodic review, the ROI partnership needs to have a strong project-by-project business impact focus, both at the planning stage, as well as the delivery stage.
An added advantage of an ROI partnership is that it reduces the focus on costs, especially if procurement is involved, since this gives a concrete tool to focus on the real value of Insights, i.e. the value to the business, and how the effectiveness of the budget can be maximized, rather than a focus on how to budget efficiency can be maximized.
Whilst putting in place an ROI partnership is not rocket science, you do need people who have the skillset, and the tools, to proactively create and manage the ROI partnerships with these key accounts. Do you have such people on your staff? Do you have such tools at their disposal?
Giving Your Clients the Gift of Business Impact
So, we hope that we have demonstrated that you have it in your power to give your clients the gift of business impact. You can help them put in place a system for measuring, demonstrating and ultimately building impact. For example, you can host a workshop for your key clients to help them get started, or you can take it one step further and offer your clients a joint training program, where both they and the team that works with them go on a journey together to build the ROI partnership.
Step 2 – Plan Out Your Key Account Growth Strategy (50 minutes)
As a next step, we suggest you pull your key account management team together for a meeting. Firstly, get confirmation of which clients belong to which bucket, and then plan out your own strategy for either moving clients up the maturity scale and/or for forming ROI partnerships.
So, there you have it. One hour invested and you’re well on your way to growing your 2020 budget, which makes you one of an elite group of MRX Master Chefs. What are you waiting for? Let’s get cooking!