Professional services firms like advertising agencies, auditors and lawyers are quick to characterize their dealings with clients as “relationships”. Some go further and even describe their dealings as “partnerships”. But how many firms really know definitively what these terms mean? What specifically are the important component parts that add up to a relationship? What specifically is expected of the professional services firm in a partnership?

And commercially, what does an effective “relationship” and a strong “partnership” mean to the botton line?

The Business Lifecycle

There are 3 distinct phases in the business lifecycle of a professional services firm and its client – the initial pitch, the ongoing servicing of the business, and the termination. All the profit derives from the middle phase – the ongoing servicing of the client’s business. So the imperative in the business lifecycle is to prolong as long as possible the ongoing servicing phase of the relationship.

Defining & Measuring Success

Crucial to prolonging the relationship is surely some kind of ongoing evaluation of performance and satisfaction. Evaluation programs typically involve some kind of survey of participants in the relationship. Typically for professional services firms the assessment criteria are based on qualitative questions.

The basic discipline of an evaluation program has great value for the firm or agency because:-

• It compels the client to identify what’s important to them in the relationship, and where the priorities lie. Once the firm knows what’s important in the relationship they know where to allocate resources and time;
• Early warning! Regular evaluation of performance and satisfaction will reveal areas of weakness before they become problems.

Relationship Is Glue

All this should be viewed in the context that surveys of clients consistently indicate that the quality of the relationship with their professional services firms is a key reason why they remain with them. Professional services firms may win business because of their performance in some kind of pitch or tender, but clients stay the distance because of the quality of the relationship. The relationship itself becomes the differentiator and the glue.

Evaluation Programs

So management at professional services firms may want to rethink the role and value of performance evaluation programs. They should be viewed as an essential business tool which:-

• Helps define expectations and priorities in the relationship;
• Determines how well the firm is meeting these expectations (early warning!);
• Cements the glue in the relationship!

Does your professional services firm undertake regular performance evaluations?

Author: Derek Groom (Decideware)