© 2013 U PSTREAM A CADEMY, LLC U SING T IME W ISELY : K EY P RINCIPLES O F T IME M ANAGEMENT 1 W ORLD C LASS T RAINING: G ETTING Y OUR F IRM O N T RACK P RESENTED BY S AM M. A LLRED, F OUNDER & D IRECTOR O F U PSTREAM A CADEMY C LIENT M ANAGEMENT : S ELECTING A ND K EEPING A -L EVEL C LIENTS P RESENTED BY S AM A LLRED D IRECTOR OF U PSTREAM A CADEMY

© 2013 U PSTREAM A CADEMY, LLC 1.Observations about the clients we serve 2.Screening for A-level prospects 3.Moving the Bs & Cs to As 4.ELA participants answer key questions 5.Question and answer session 2 P RESENTATION M AP

© 2013 U PSTREAM A CADEMY, LLC  O BSERVATIONS A BOUT T HE C LIENTS W E S ERVE 3

© 2013 U PSTREAM A CADEMY, LLC Our firm can be no better than our clients allow us to be. O BSERVATION #1 “It’s axiomatic: You’re as good–or as bad–as the character of your Client List. In a very real sense, you are your Client List.” Tom Peters 4

© 2013 U PSTREAM A CADEMY, LLC Every firm has some bad clients. Not all difficult clients are bad clients. A bad client is just that: a client who is not worthy of our time and resources–not now, not later. O BSERVATION #2 5

© 2013 U PSTREAM A CADEMY, LLC Bad clients cost us a fortune. Not only do they consume resources that could be dedicated to more profitable and rewarding clients, they add tremendous stress to our lives. Bad clients live in Quadrant I and require all who serve them to become trapped in that energy-sapping quadrant. O BSERVATION #3 6

© 2013 U PSTREAM A CADEMY, LLC The only clients for whom we can provide A-level service for any length of time are A-level clients. Serving A-level clients improves our quality of life substantially because these clients are better able to help us have successful engagements. O BSERVATION #4 7

© 2013 U PSTREAM A CADEMY, LLC 8 “ Along with your human capital, your customer selection and retention criteria are the most important aspect of crafting your firm’s success.” Ron Baker

© 2013 U PSTREAM A CADEMY, LLC We generally keep bad clients for one of four reasons: 1. Fear (of conflict, wasted effort, lost revenue, reprisal) 2. Pride or stubbornness 3. Compelling need to grow 4. Book of business culture O BSERVATION #5 9

© 2013 U PSTREAM A CADEMY, LLC Serving D-level clients is extremely difficult for all members of the firm. Failure to hear complaints doesn’t mean the pain is not there. Here are some actual comments from managers of a Top 100 firm regarding what it’s like to serve D-level clients. O BSERVATION #6 10

© 2013 U PSTREAM A CADEMY, LLC It’s demoralizing. They don’t allow us to be professionals. We’re not excited to serve them or even call them back. D-level clients lie to us. It’s discouraging. It stinks to work for D-level clients. They create enormous stress. D-level clients are anti-culture. I feel totally out of control. These clients are destroying everything we’re trying to create. D-level clients defeat and undermine the firm culture. They cause friction among directors, managers and staff. They try to trap us and are looking to cause problems. Our reputation is hurt more by serving these clients than by firing them. R EAL F EEDBACK F ROM M ANAGERS 11

© 2013 U PSTREAM A CADEMY, LLC Most firms are better talkers than doers when it comes to culling D-level clients. History has shown that it’s much easier to lead clients in the front door than it ever is to escort them out the back door. O BSERVATION #7 12

© 2013 U PSTREAM A CADEMY, LLC  S CREENING F OR A-L EVEL P ROSPECTS 13

© 2013 U PSTREAM A CADEMY, LLC One of the biggest weaknesses in our profession is that we celebrate the landing of all new clients – regardless of the quality of the client. The bigger the new client (engagement) the bigger the cause for celebration. 14

© 2013 U PSTREAM A CADEMY, LLC Many firms have a poor screening process for selecting new clients. In many firms, prospective clients are considered good candidates if they have a checkbook and can fog a mirror. The idea of performing appropriate due diligence with prospective clients is foreign to many within our profession. 15

© 2013 U PSTREAM A CADEMY, LLC One of the biggest mistakes a professional can make is to play the role of a vendor rather than a consultant. It’s vitally important for both the prospective client and the firm to perform due diligence. 16

© 2013 U PSTREAM A CADEMY, LLC The fact that the economy is tough right now makes it all the more important to select the right client and not one that will inflict more pain into your firm. Saying “no” to the wrong opportunity leaves us in a better position to say “yes” when the right opportunity comes along. 17

© 2013 U PSTREAM A CADEMY, LLC The primary purpose of a client screening process is to detect as early as possible whether the prospective client is A-level or D-level. It is much easier to part ways with prospects when we have not invested significant time pursuing them. 18

© 2013 U PSTREAM A CADEMY, LLC Identify the characteristics of A-level clients (may be different by department). The objective is to identify early on whether a prospect is an A-level client. Develop a formal screening/due diligence process. 19

© 2013 U PSTREAM A CADEMY, LLC A-L EVEL C HARACTERISTICS The ability to attract and retain quality people 2.An attitude of teamwork and commitment 3.A strong upper management team 4.High commitment to technology 5.Belief in a thorough planning process for change 6.Recognize and pay for quality services 7.Reasonable expectations 8.Willing to take advice (teachable) 9.Investment vs. expense approach to change 10. Good profitability and strong position in industry 20

© 2013 U PSTREAM A CADEMY, LLC Commit all stakeholders to follow the process. Make the partner in charge the gate keeper for acceptance of new clients. Manage client expectations right up front. 21

© 2013 U PSTREAM A CADEMY, LLC A-L EVEL C LIENT C HARACTERISTICS D-L EVEL C LIENT C HARACTERISTICS Growth potential Good economics (value and pay for quality work, good realization, good profit, refer other clients) Low client risk (client has integrity, takes a team approach to engagements, competent staff, willing to ask for and follow advice) High enjoyment factor Limited growth potential Bad economics (poor profit, slow paying, poor realization, excessive write-offs) High client risk (client lacks integrity, tries to trap us, turns their problems into our problems, disorganized, not willing to take advice) Low enjoyment factor 22

© 2013 U PSTREAM A CADEMY, LLC Great personnel (Great to work with, longevity, treat our people with respect, realistic expectations) Low engagement risk (client is well organized, good management, attracts and retains good people, timely in providing quality records, good internal controls) Enhances firm reputation Weak personnel (extremely demanding, unrealistic expectations, constant turnover, treat our people poorly) High engagement risk (disorganized, weak management, unable to keep good people, inadequate and untimely records, weak internal controls) Diminishes firm reputation A-L EVEL C LIENT C HARACTERISTICS D-L EVEL C LIENT C HARACTERISTICS 23

© 2013 U PSTREAM A CADEMY, LLC “Supposedly, professionals are among society’s most bright, educated, and elite members–people who are supposed to have more career choices than anyone else. Yet they seem to be willing to accept a work life made up largely of ‘I can tolerate it’ work and clients, and they feel that they cannot safely do anything about all that.” David H. Maister 24

© 2013 U PSTREAM A CADEMY, LLC  M OVING THE B S & C S TO A S 25

© 2013 U PSTREAM A CADEMY, LLC Identify clients you feel are good clients with potential for a better relationship. Identify specifics that separate the client from your A-level clients. Prioritize your list for addressing the issues with these clients. 26

© 2013 U PSTREAM A CADEMY, LLC Schedule a face-to-face meeting with the client (avoid a meal-related meeting). Express a desire for a better business relationship. Ask what you can do to be an A-level provider. Share with them your expectations for a strong relationship. 27

© 2013 U PSTREAM A CADEMY, LLC 28  ELA P ARTICIPANTS A NSWER K EY Q UESTIONS

© 2013 U PSTREAM A CADEMY, LLC 29 We have asked a number of ELA participants to respond to several questions. Offering responses to these questions is not limited to the participants who have been contacted in advance.

© 2013 U PSTREAM A CADEMY, LLC What benefits would you expect to receive if your firm served only A-level clients? Q UESTION 30

© 2013 U PSTREAM A CADEMY, LLC How would it benefit your firm to transfer your D-level clients to your competitors? Q UESTION 31

© 2013 U PSTREAM A CADEMY, LLC Why do firms struggle so much to get rid of D-level clients? Q UESTION 32

© 2013 U PSTREAM A CADEMY, LLC If managers feel so negatively about serving D-level clients, why don’t they voice their feelings to the partner group? Q UESTION 33

© 2013 U PSTREAM A CADEMY, LLC 34  Q UESTION A ND A NSWER S ESSION

© 2013 U PSTREAM A CADEMY, LLC 35 Thank You!