Understanding brand value is vital to the successful retention of clients in today’s business environment.
Successful retention of clients is fundamental for businesses to compete successfully and efficiently in today’s business environment. Brand has long been perceived to be a key element that attracts clients and builds loyalty. A firm selling tangible products, such as canned foods, may have built a brand based on a reasonably priced, widely available, broad range of safe and hygienic canned foods. Each of the firm’s products, is part of the firm’s brand and also has its own brand value embedded in its physicality; its design, wrappings, colours, shape, fonts, and taste.
But the brand value issues are of a different complexity when the business, and its revenue, is centred on the intangible, such as professional services. A professional services firm may base its organisation-level brand on the provision of timely, relevant, accurate, helpful, expert technical advice. The revenue is gained from sale of the product; the humans who deliver and conduct the service purchased. And in doing so, introduce a range of variability, not found in simple product transactions such as canned goods.
Local brand bias, as one form of assumption filter, can have several contradictory effects. Locals may be biased for or against local brands. Their purchasing behaviour may have an element of deep, national pride-based motivation to invest in their nation and its economic activity. Equally, it is often just as likely that some locals are strongly focussed on obtaining those external, global brands that are perceived as conferring on the buyer a perceived value or ‘status’ not obtainable from local brands.
In a market where local brand bias is a factor, as external professional service firms seek to build a sustainable client base who become advocates for them, they will need to understand the fundamental dynamics of what drives the local brand bias and then embrace a client-centred brand that resonates with a clear value proposition to their local clients.
The adoption of a client centric approach orientation will assist to leverage the relationships and activities developed in delivering the service. Numerous studies on brand loyalty found that the majority of adults are loyal to both product-brands (82 per cent) and retailers (84 per cent). 1 The good news is that in their recent study, the ICSC estimates that within two months of the COVID-19 pandemic subsiding, consumers will return to their preferred haunts. Consumers indicate that they feel comfortable returning to physical stores 67 per cent, open air shopping centres 65 per cent, and restaurants 55 per cent. 2 The question is how brand loyalty will drive any rebound for the business-to-business (B2B) and professional services engagement.
Today, with changing business dynamics and markets, the importance of a loyal client base and continuing to derive value, firms need to understand the basic elements of and drivers for their client relationships. The identification and development of client relationships that are of strategic importance to the firm requires an understanding their potential internal and external returns on investment and challenges such as key personnel changes, external regulatory developments and local brand bias.
A client-centric approach offers many benefits, such as building a sustainable and predictable revenue stream. Clients who feel understood and satisfied with a service, often can become advocates who might go on to recommend and endorse the firm to others. Client advocates are essential when local brand bias is an important factor as they lend credibility in the market and facilitate the enhancement brand recognition and positioning. To bolster such developments, a firm’s strategic decision-making should involve investment in the training and education of its staff to match current and anticipated client needs.
After identifying key clients that generate or have the potential to generate significant revenues and expected margins, plans and budgets can be developed for activities that enhance the relationship and client experience. Initiatives such as wrap-around, tailored services might include initiatives like training and networking opportunities for client staff, development of white papers and other forms of thought leadership, and participation in significant local social events.
These activities can be clarified, prioritised, costed, and more importantly, measured. Measurements may include number of services introduced to the client, revenues generated, number of leads, or invited pitches or the strength and number of relationships made within the client base, as well as referrals or support for the firm’s business.
A key benefit of establishing a loyal client base means that firms increase their opportunities to cross-sell to long-term clients, which helps diversify revenue streams. Satisfied clients are less likely to consider other providers and are also likely to become client advocates, enhancing the firm’s credibility and reputation and providing free and genuine marketing of services to other potential clients. These clients therefore cost less to service; cost less of the marketing budget to win; and in the case of retainers or ongoing work, can provide a reliable revenue stream that will help in the planning and management of budgets, schedules, and resources.
For services firms, the ability to successfully retain and then build on a client base is essential. Through the adoption of an external lens in their daily dealings with clients, firms are able to maximise the returns of their investment in each client. By adopting practices designed to create a loyal client base, especially when local brand bias is a significant factor, firms are able to meet the challenge of developing sustainable revenues from a group of stable, positive client relationships.
1 Businesswire, 15 August 2017, Low Prices Raise Customer Loyalty. Accessed via https://www.businesswire.com/news/home/20170815005733/en/Prices-Raise-Customer-Loyalty
2 ICSC Research Coronavirus Economic Impact Survey Series, conducted May 22-24, 2020. Accessed via https://www.icsc.com/news-and-views/icsc-exchange/icsc-research-consumers-are-ready-for-businesses-to-reopen [accessed 8 June 2020]
Daryll Cahill is a senior lecturer in the Department of Law and Accounting, Royal Melbourne Institute of Technology (RMIT) with research interests in measuring intangibles and intellectual capital.
Louise Robinson is a Fulbright scholar researching 21st century skills and an executive leader within the Technical and Vocational Education & Training sector in Australia. She is currently the Executive Director, Industry & Growth at Victoria University.
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