Business Development: An Introduction to the 2-4-8 Model, Revenue Gaps, and the Relationship Bell CurveShirley Anne Fortina
The 2-4-8 Model
This model compares revenue against time allocation, helping us to make informed decisions around clients, productivity and sustainability.
Identify each of your clients in descending order by revenue ($) or profit margin (%). Place each client into the grid below, inserting your highest value client at number one and so on. You can continue down to 16 or 32 or 64 should you wish to.
Now consider the respective relationships in your grid and the amount of time you and your business spends servicing each client – for example:
- Client No. 1 generates 20% of revenue and takes up 5% of time;
- Client No. 7 generates 3% of revenue and takes up 20% of time.
Do we spend enough time with those clients that we should, and too much time with those that we shouldn’t?
Now consider the revenue over the past three years. Is the revenue for each client trending up, down, or no change?
Do you have the capability to increase your share of wallet with Client No. 7? If yes, work out a plan. If no, this client may not be financially sustainable in the long term and you need to consider your options.
This approach uses the three-year 2-4-8 analysis to project out future revenues. Use a grid chart to identify gaps in your revenue.
In the example above, March has no projected revenue; therefore, based on the Relationship Bell Curve concept (see below), we should have looked for opportunities to close the gap 6 to 12 months ago!
The Relationship Bell Curve
We live in an environment where everything operates at speed. We want everything and we want it now.
But effective relationships take time to develop, and to build successful, profitable relationships you must embrace long-term thinking vs short-term thinking!
It takes on average, around 6 to 12 months to develop a relationship (70%). In some instances it may happen a lot quicker (15%) and, in other cases, it may take a lot longer (15%).
Mahatma Ghandi said “The future depends on what you do in the present”.
Make sure that you are working on your relationships well in advance!
Are You Driving your Bus?Shirley Anne Fortina
You are a walking / talking brand!
The way you dress, the way you communicate (both in-person and over the phone), the way you present – all have an impact on your personal brand. Your brand in turn can be linked to your success.
Are you aware of your brand, and are you driving your brand?
We all have the choice to define ourselves, or to be defined by others. What do we want to be known for? What do others say about us? Personal branding is our promise of value and we need to be in the driving seat! To be in a position to define ourselves we need to know who we are and what we stand for.
We need to:
- Become more self-aware; this will help build our confidence levels, increase the options that are open to us and help us manage any self-limiting beliefs;
- Develop our presence and the impact that we have on others;
- Be assertive: state what we want, what we need and the costs of not getting them;
- Manage our career and our personal brand, which is 100% our responsibility;
- Evaluate what we are passionate about, our skills and our values, and then be determined enough to take action.
How are you driving your bus? Are the distracting influences of day-to-day issues and stresses badly affecting how you cope, or are you in control of “your bus” – “your brand”?
We all need to take ownership of our lives to avoid being swept away by the challenges of our busy lives. For many of us, our lives and our happiness are determined by the subtle and not-so-subtle expectations of others. We let them drive our bus.
We all would have experienced this at some stage; for example, our parents wanting to live vicariously through us; our friends or life partners attempting to persuade us to do something their way; and even the typical expectations of the companies that we work for. And it’s easier to go with the flow than resist.
When we get to the point of self-determination, at which we take responsibility for our lives, then we drive our own bus. However, with responsibility comes accountability and the realisation that each decision we make carries with it a consequence of that decision. We cannot blame anyone but ourselves for the outcomes of our decisions. We cannot blame them for who or what’s on the bus, nor where the bus ends up. We are at the wheel and we have the map book (or TomTom)! It is up to us to decide where, when, where, why, with whom and how we drive the bus.
We all need to use our own set of unique skills, our strengths, our talents, our passions, our intellects, and not be influenced by others’ expectations. We need to find this sense of self, where we can answer not what we want but who we are, where we want to go, who we want to be, what is important to us, what we value and what we believe in. It is when we take time out of our overly busy schedules to slow down, to stop and think about these questions that we start to take control of the bus.
So what should we do? Well, we all know that speed kills – it kills creativity, fun, health and wellbeing, it increases stress levels and most importantly we miss out on the journey because we are going too fast. So let’s slow down and – dare I even say it? – Stop! Stop the bus and take the time NOW to invest in yourself. Start with some proactive self-reflection – it will be one of the most important activities that you will do in your lifetime. Self-reflection is the foundation to your life. Once you find that inner you, that’s when you can shine anywhere, any place, any time because it comes from within.
Norman Vincent Peale said ‘One of the greatest moments in anybody’s developing experience is when he no longer tries to hide from himself but determines to get acquainted with himself as he really is’.
In a world that is constantly changing and providing us with challenges, honest self-reflection is key to our sanity, development and growth. We should regularly examine what has, and hasn’t, worked, despite how painful it may be to look in the mirror. Self-reflection helps us with direction, our communication and our life experiences.
For self-reflection, we need to stop, sit back with that glass of wine, coffee or tea and answer the following questions:
- Who am I?
- Who do I want to be?
- What do I want to do?
- What is important to me?
- What do I value?
- What do I believe in?
- What do I have to offer?
- What are my attributes?
- What are my dreams?
- What do I want to experience?
- What are my goals across my ‘wheel of life’ (mental, educational, health, social, cultural, spiritual, family, home, finance, career, etc.)?
- What are my successes to date? (To answer this one we need to first define what success means to us, because it means different things to different people.)
Once we have stopped and thought about where we are at and where we want to go, we then need to set some SMART goals (specific, measurable, achievable, relevant, time-bound) to help us get there.
Business Development: Strategic Client Relationship ManagementShirley Anne Fortina
Remember the old adage “The Client is King”? Put more baldly, the reason your business remains in existence is because you have clients. To lose sight of this carries the risk of losing clients. You know that the world you operate in is highly competitive and aggressive. You also know clients are (mostly) sophisticated buyers of legal services with high expectations and demands. The better you know your clients, the better the relationship – and therefore the less chance your clients will look elsewhere. It is well understood that it costs more to discover and develop new relationships than it does to look after existing ones. In addition, you do not need to have new clients to grow your business; you could quite possibly grow your share of their wallet by extending your service offering to your current clients through effective cross selling.
It is assumed that your firm has a clear plan and strategy which encompasses strategic client-relationship management, namely:
- You have a clear and well communicated Firm Strategic Plan, Business Plan and Operational Plans that are understood in all parts of your firm (HR, IT, Finance, Secretarial & Administration, Reception and all Legal Staff);
- The Strategic Plan includes: Vision, Values, Purpose, Mission, Key Success Factors, Key Strategic Objectives; Practice Objectives; Goals and Actions;
- You have identified your Ideal Client.
With this in mind there are many business development aspects to take into consideration when looking after existing clients. It is important that you align all business development activities to your firm’s overarching strategic plan – so the day-to-day activities feed into the business plan, which feeds into the strategic plan. If they do not, ask yourself this: What is the purpose of these business development activities?
Client relationship management should be your number one business development activity. How well you do it may have long term impacts on your relationships and therefore the success of your firm. Here are a few questions which will help you work out how well you know your clients and explore the type of relationship you want with them.
In regard to your client:
- Do you know your client’s strategy?
- Do you know what significant business issues your client is facing?
And what about you?
- Do you make it your business to understand what is special and unique about your client?
- Do you care about your client?
- Do you offer a clear explanation of what you are doing for them and why?
- Do you keep your client sufficiently informed on progress?
- Do you make sure that you are accessible and available when your client needs you?
- Do you keep your promises on deadlines and targets?
- Do you keep within your scope parameters?
- Do you make your clients feel like they are important to you?
- Do you make an attempt to be interested and helpful beyond the particulars of the tasks?
- Are you consistent in all your communications and interactions with your client?
In regard to the relationship:
- What type of relationship is it and how would you rank it out of 10 (1 low; 10 high)?
- What are you doing to maintain, build and / or enhance it?
- Who is / are the key contact points for the client? Do they like them? Do they know they can change their contact?
- What is your current position with your clients – panel appointment or transaction / commoditised / project based work?
- Where do you want to position your firm – preferred supplier, trusted advisor role?
- Have you completed a client plan and identified measurable goals?
- What is the total annual spend on your services by the client? What percentage do you get? Can you improve on this?
- Do you have the right people on your client service team?
- Who are your competitors and in what areas?
- Have you done any client listening lately? Health checks, debriefs, client conversations? Do you have a 12-month client listening plan? What regular relationship meetings do you have with the client?
- Getting closer to the client – Have you developed a relationship matrix: i.e., who are the people you need to know and service within the client’s business?
- Do you have single or multiple relationships with key contacts – looking across the firm and the client?
The wonderful Dale Carnegie said, “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” The same goes for business relationships. Get interested in your clients – invest time, effort and energy into your relationships!