Chapter 7: Building Long-term Relationships

Question 1

What are the types of relationships typically seen in the corporate world? (4)

Answer 1

1. Hands-on/High Involvement - personal, very close, sometimes physically involved relationships between clients and employees (eg. medical doctor, dentist, RMT, chiropractor, etc.).
2. Face-to-Face - client and company interact on a regular basis in a personal environment (ie. office, home) where they see and talk with each other.
3. Distant - client relationships that involve less frequent contact and less likelihood of face-to-face meetings, typically meeting via technological platforms.
4. Brand - relationships that consumers have with major/large brands (eg. Nike, McDonald’s, Kraft, etc.).

Question 2

What increases client profitability? (3)

Answer 2

1. Clients tend to spend more money with a business the longer they deal with it.
2. Involvement with brokerages by clients increases with comfort level.
3. Loyal clients may make referrals to friends & family.

Question 3

What makes serving long-term clients less costly than serving new clients?

Answer 3

Employees already know what the long-term clients typically want, and are less prone to making mistakes and consequently recovering from those errors.

Question 4

What is the mistake made when determining which client is the most important?

Answer 4

Using only the metric of amount spent by a client is a short-sighted method in determining the most important client(s).

Question 5

What can a brokerage do to attempt to recover client relationships that are at risk?

Answer 5

The brokerage must first identify the source of dissatisfaction, and if possible, make a counter offer that the client will find attractive.

Question 6

What is at the root of the service - profit chain?

Answer 6

Internal quality service

Question 7

Why is internal quality service so important for a brokerage?

Answer 7

When internal quality service is prioritized, employee satisfaction typically rises. With that, clients are likely to perceive greater value when their needs are met by employees that go above & beyond [effort/enthusiasm].

Question 8

What aspects go into internal quality service?

Answer 8

Workplace/office design, decision-making latitude, employee development, rewards, etc.

Question 9

How can brokerages capitalize on mistakes made when servicing clients?

Answer 9

Brokerages can use these mistakes as opportunities to impress the client(s) by resolving the outstanding issue(s) in a way that satisfies the client’s needs.

Question 10

What are success factors in client relationship management?

Answer 10

Areas of opportunity in which brokerages must focus attention. These areas are imperative to the success of client relationship management strategies.

Question 11

What are the (7) success factors in client relationship management?

Answer 11

1. Client activity - knowing what services and products the brokerage’s clients already use.
2. Employee activity - tracking measurements of performance by client, product, employee, and by branch.
3. Process effectiveness - creating routines and procedures that enable employees to more effectively deliver high quality service.
4. Loyalty recognition (eg. referral fees, better rates for packaged products, etc.).
5. Consultative selling - bringing awareness to the available products that may be of interest or relevance to the client.
6. Financial management
7. Commitment - ongoing dedication of all employees and leaders is imperative to the success of any relationship management system.