Client service has always been my biggest focus at work. You’re thinking “Right. You’re just writing that because your clients read your blog.” While that may be true (many of my clients read my blog), my focus on client service is not quite as noble as it sounds. The truth is that I love a gold star. I like to be able to point to a client’s success and say “I helped do that!” A client service focus also ensures that clients keep coming back to me.
Which brings me to today’s topic: whether you are a lawyer, broker or other service provider, how should you measure client service? The most obvious way is to ask your clients how you’re doing. To that end, I’ve already written this blog post about Net Promoter Score surveying. You can also sit down and interview your clients annually, an approach so valuable that books have been written about it. Finally, you can track client metrics including retention, growth, and spending.
Client retention is nuanced but still relatively easy to measure in a commercial real estate context. If a client has a multi-location portfolio, I ask whether I am getting new assignments each year as transactions occur in the client’s portfolio. I may not have all of a client’s work because of geography, but are they regularly calling me to help with their transactions?
By this measure, my biggest success is SAIC. To date, I have represented them (either directly while I worked at JLL, or co-brokering with JLL) in every geography in which I have lived for over twenty years. I am so grateful that their real estate team continues to trust me to help them achieve their real estate goals in Alabama.
In the five years I have been at Colliers in Birmingham, my partner and I have lost only one existing client (and that loss was to a business partner of that client). For every other multi-location client, we have done at least one transaction per year. For clients with only one location, we track whether we are able to maintain the relationship across each lease term. While the data tells us that we have a good track record, we know that the second we lean back, we are sunk.
If you haven’t seen revenue from a regular client for an unusual length of time, it is probably time to ascertain the reason.
Growth by client is tracked differently depending on the service provider’s industry. In real estate, we track by number of deals. If we are increasing the number of deals done annually for a client either nominally or as a percentage of the client’s total deals, we are headed in the right direction. We can’t necessarily track growth in dollars because some deals/locations may be smaller and thus generate less revenue whereas one large transaction can falsely inflate annual growth numbers.
In law, individual client growth may be tracked either by revenue or by the number of matters handled for a client. Each firm needs to determine the best metric for their practice. The key is that whatever the metric chosen, regular tracking allows for measurement and improvement.
Law firms can also use revenue growth data to compare trends in revenue for one specific client across practice groups. Is one practice group increasing their revenues with a client while another practice group is losing revenue from the same client? Such data can trigger an inquiry to determine whether the client is sending that work to a competitor or just does not have as much of that type of work any longer. Sharing this information with the client team allows them to diagnose and address the issue.
Finally, in some industries, growth can be tracked by client spend.[i] In the legal industry, tracking client spend year over year can quickly indicate whether a relationship is growing or dying. If your client is a public company, you can check their 10-K statements to determine their annual revenue growth. If your client revenues are not increasing in rough proportion to their corporate growth, it can be a sign that you are losing revenues to competitors or work is being pulled in-house. In either case, it is probably time to get busy righting the (relation)ship. You can also use the data you gather from this exercise to identify your client service successes and then determine how your firm/company served those clients differently than your client service challenges.
If you have identified other metrics that are helpful for measuring client service and satisfaction, please share them in the comments or give me a call. I would love to hear about them!
[i] Office tenant representation growth is not as easily measured by this metric because our fees are paid by landlords so, in a perfect world, our clients never spend a dime compensating us for our services.