Resetting the Client
Loyalty Equation
Professional service firms must strike the right
balance between meeting client expectations and
going the extra mile.
UPS/IndustryWeek
Management Briefing
Executive Summary
Recent research has found that consumer loyalty is driven less by exemplary service and achieves more success by
minimizing effort and hassle for customers. Professional service firm leaders should consider how this insight applies
to their businesses. Ease of doing business should always be a top objective because the senior leaders who renew
contracts base their decisions in large part on the attitude that their team has toward the service provider. When it comes
to client relationships, it’s critical to strike the right balance that ensures exceptional service while building client loyalty.
N
o doubt you’ve
heard the directive:
“We have to delight
our customers!” After all,
your willingness and ability
to respond to clients and
do whatever it takes can
separate your company
from the competition.
What could be wrong with always
trying to exceed your customers’
expectations? In today’s digital and
social media world, companies
like Zappos, The Ritz Carlton and
Nordstrom have received a lot
of press and positive word-ofmouth about the extra lengths
they’ve taken in order to delight
their customers. The trouble is,
for the vast majority of business
interactions, going above and
beyond can be costly and, somewhat
surprisingly, has little or no impact
on loyalty.
In 2010 researchers at the Corporate
Executive Board (CEB) upset the
customer delight apple cart. For
most companies, they argued in a
Harvard Business Review article,1
customer loyalty is not driven by
exemplary service. After analyzing
thousands of call center and selfservice interactions, they found that
loyalty correlates more closely with
meeting people’s basic desire for
minimal effort, not with exceeding
their expectations. In addition, when
it’s difficult or a time-wasting ordeal
for customers to get what they want,
or to have an issue resolved, that’s a
huge driver of disloyalty.
Obviously, call center operations
are different from professional
services, where loyalty and contract
renewals revolve around long-term
relationships and performance
reviews. But that doesn’t mean
reducing client effort and minimizing
hassle won’t pay dividends.
is, and then figure out ways to
mitigate that effort, he explains.
Many retail and consumeroriented companies from banks to
amusement parks have taken CEB’s
insights to heart and started working
on ways to make their customer
interactions more effortless. For
example, in addition to other
consulting services, West Monroe
Partners helps financial service
providers, banks, credit unions,
For this management briefing we
talked with top executives from a
cross-section of professional service
firms about how they drive client
loyalty, and what role creating an
experience that requires minimal
effort may or may not play in
achieving that objective.
Loyalty has to be earned on
multiple levels
Trying to delight your customers is
a laudable goal; it’s just very hard
to operationalize. “If you ask the
folks who work with customers
what it means to delight the
customer, you’re going to get 50
different answers,” says Nick Toman,
Managing Director at CEB. Toman
was one of the co-authors of the
HBR article and subsequent book2
detailing the results of their research.
In contrast, customer effort can be
measured at the transactional level.
Businesses can track how difficult
and time consuming each interaction
“The number one
loyalty criteria for the
senior people who sign
the contracts… is how
their team feels about
them.”
— Nick Toman, Managing Director at
Corporate Executive Board
UPS/IndustryWeek Management Briefing | 2
utilities and healthcare organizations,
measure customer effort in their call
centers, on their websites and at
their retail locations. The results are
highly actionable compared to more
traditional customer service metrics.
“Clients can drill down tactically
and find specific tasks that are
very difficult to do. Especially
ones that are difficult to do
compared to the industry norm,
and then focus on those areas for
improvement,” says Dave Nash,
Director of West Monroe Partners’
customer experience practice.
Of course, such discrete interactions
may be less common in professional
services. Ease of doing business,
however, is still worth pursuing,
even if it’s not a major differentiator
at the beginning of a relationship.
As in the consumer space, the
difficulty of working with your firm
can be a driver of disloyalty. Key
processes that professional service
firms need to execute well are
contract reviews, invoicing, credit
approval, and other interactions
between your firm and your client’s
finance and legal departments.
According to CEB’s research,
what actually matters most
for client loyalty is what the
client’s operational team thinks
of a particular provider. That’s
why loyalty has to be earned
multiple times at different
levels and touchpoints.
“What we know from our data is
that the number one loyalty criteria
for the senior people who sign
the contracts, who cut the checks
and determine who the company
does business with, is not how
well the company delivers on its
services,” says CEB’s Toman. “It
isn’t how good they are in the
marketplace. It’s how their team
feels about them. Does their team
like doing business with them?”
Align client expectations with
service delivery
This dynamic applies to the
evaluation phase as well, he adds.
Today, more and more stakeholders
are involved in the evaluation
and approval of service-provider
proposals and final agreements.
At the same time, companies are
becoming increasingly risk averse.
Having more people involved who
don’t know how to assess and
manage risk bogs down the decisionmaking and purchasing process.
“You see it in any type of decision
that companies are trying to make,
not just purchasing. The speed and
quality of decision making continues
to deteriorate,” says Toman.
Based in Des Moines, Iowa,
Businessolver manages the customer
experience on two levels. The 500plus employee company provides
benefits administration services.
The core of its service is an online
portal that the employees of client
companies use to sign up and
manage their employment benefits.
It also operates a call center to
provide assistance to the employees
of client companies when needed.
As such, Businessolver manages both
business-to-business and businessto-consumer relationships.
There is an effort-related opportunity
here, he adds. Firms can differentiate
themselves by making the purchase
experience easier, and by not
bombarding potential clients
with a bunch of information they
don’t need. Those firms that can
teach their clients how to make a
consensus-based decision—how to
select the right accounting partner,
for example—can simplify purchase
experience and accelerate it.
The key to managing both types of
relationships successfully, according
to President and CEO Jon Shanahan,
is clearly defining what success
looks like up-front with each new
client, and calibrating the type of
service they provide accordingly. For
example, some clients want their
employees to have a more personal
touch with a lot of hand-holding as
they go through the benefits signup process. Others want to push
employees toward a more selfservice approach.
UPS/IndustryWeek Management Briefing | 3
Businessolver’s customer service
representatives interact with
employees from multiple clients.
To maintain alignment with each
client’s expectations, the software
informs the representatives of the
targeted service levels when people
call in.
“We learned all of this the hard
way,” says Shanahan, explaining
that their business began with the
software. They added the call center
later in response to client requests.
“Everyone looks at customer service
so differently.”
The real estate management division
of CBRE also goes through an annual
client calibration exercise. They also
have quarterly review meetings
to maintain alignment with client
expectations. Based in Los Angeles,
the 44,000-employee company
manages over 3.5 billion square feet
of property worldwide.
Sharing their general knowledge of
industry trends during these client
review meetings enables CBRE to
shape expectations and contribute
to their clients’ success on a higher
level, and thereby earn greater
loyalty. Suggestions might include
opportunities for streamlining
processes or making other facility
usage improvements. According to
Jim Hayden, Executive Managing
Director of CBRE’s healthcare real
estate services, this type of guidance
is especially welcome in the U.S.
healthcare sector because of the
current cost-cutting pressure on
hospitals and healthcare systems
that’s being driven by the Affordable
Care Act requirements.
“At a certain level we just have
to meet expectations,” explains
Hayden. “Last night, if it snowed in
Cleveland, we need to make sure
that the driveway was cleaned off.
That’s a given. To have long-term
sustainability and grow with our
clients, we have to bring some
strategic input as well.”
CBRE continually works to make
resolving any day-to-day issues more
effortless for their clients, Hayden
says. Easy communication is a major
part of this. From a central call
center they manage and prioritize
responses to issues as needed,
whether it’s a light bulb in a closet
or a problem in a surgical center.
Use of smart phones and similarly
connected devices makes it easier
for client representatives to inform
CBRE of issues and to communicate
their response.
Maintain a personal touch
Doing the assigned work and
executing projects well are essential
to maintaining customer loyalty.
But that’s table stakes really for
professional service firms. Client
relationships themselves also have to
be managed proactively. Doing that
is a matter of communication.
“If you’re only focused
on one-off transactions,
that’s a really tough way
to grow our business
and be successful and
get paid for the value
that we think we
deserve. Then you’re
just a commodity to
some extent.”
— Adam Weissenberg, Chief Client
Experience Officer at Deloitte
Touche Tohmatsu
“We try to have many touchpoints
with our clients throughout the
year,” says Jeff Agranoff, Chief
Operating Officer of Friedman LLP,
a top-50 accounting and advisory
firm based in New York. “Most
accounting and professional service
firms generally only have contact
with their clients during peak
periods. In our case it’s usually
during tax filing time. But we’re
reaching out to our clients at least
once a month.”
in person multiple times throughout
the year. Such meetings are built
into their performance assessments.
Agranoff adds that in-person
meetings are critical in a world
where many companies rely on
email to maintain some semblance
of regular contact with their clients.
His firm makes sure partners and key
account managers meet with clients
When it comes to the day-to-day
work for its clients, the firm does a
number of things that are intended
to maintain client engagement and
loyalty. The first is a “no excuses”
mentality when it comes to meeting
project deadlines. They also strive
to maintain client teams, which
“Your best sales leads are from
your existing clients and contacts,”
says Agranoff. “In a lot of the client
conversations that we have, they
may ask us about an issue that they
have coming up, and about who
could handle it. About two-thirds of
the time it’s work that we can do.
It’s an immediate business driver.”
UPS/IndustryWeek Management Briefing | 4
preserves personal relationships and
knowledge of the client’s business.
Finally, when they are on-site at a
client location, they end the day
with a debriefing to review what
was accomplished that day.
Minimizing client effort and
maintaining a personal touch can
also be baked into your business
model, especially for a smallersized firm. “At the end of the day,
customers don’t want services they
didn’t pay for. They just want their
problem solved on time and on
budget,” says Max Aulakh, President
of Miamisburg, Ohio-based Mafazo
Digital Solutions.
Mafazo is a growing cyber security
firm that works with clients in the
defense sector, including the U.S.
Air Force, as well as commercial
businesses. They help clients protect
their data from hackers and respond
to security breaches. Their expertise
and tight focus reportedly drives
both loyalty and referrals.
“Our fundamental principle is that
our clients hire us to fill a specific
need. We don’t ever advise them
to do more than they have to. Our
measure of success is how well we
are filling that need alone before
we worry about anything else,”
says Aulakh.
Long-term client relationships
build on positive experiences
Clearly, there are times when all
that’s required is responding to
clients’ needs quickly and with
minimal effort on their part.
But in most professional service
client interactions, that’s a shortterm perspective, says Adam
Weissenberg, Chief Client Experience
Officer at Deloitte Touche Tohmatsu,
a global consulting firm with affiliate
offices around the world.
“If you’re only focused on one-off
transactions, that’s a really tough
way to grow our business and be
successful and get paid for the value
that we think we deserve. Then
you’re just a commodity to some
extent,” he adds.
Part of Weissenberg’s role is
to oversee the firm’s executive
development programs for corporate
leaders and executive teams.
Deloitte hosts these programs in
well-appointed leadership centers,
which it calls “greenhouses.” It
designed the centers and learning
experiences, or “labs,” to help
its clients cultivate and nurture
new ideas and solutions, and
work through organizational
changes and transitions.
“As a professional service firm, we’re
in the business of creating long-term
relationships,” says Weissenberg.
“Most of our clients, particularly
individuals, will move from one role
to another within a firm, or from one
client to another. We want them to
think about us in the long term.”
Because these programs take
senior leaders away from their
highly demanding jobs for a day
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or more, they have to be better
than time well spent. “We want
everyone to leave every one of
these experiences and say it was
phenomenal,” says Weissenberg.
To deliver an exceptional experience,
not only does the environment in
these leadership centers have to be
a far cry from a traditional classroom
environment, the content must
be superior. Deloitte has full-time
teams dedicated to the labs, its
senior partners participate regularly,
and the firm brings in exceptional
outside speakers. All told it’s a major
investment, for which the firm is just
beginning to calculate the return.
Of course, when it comes to
delivering a phenomenal experience,
the bar keeps getting higher. What
was exceptional eventually becomes
expected, so you have to keep
innovating. It’s a challenge that
Weissenberg embraces. “We’ve
been doing these for years, and
invested a lot of time and energy.
Sure someone can catch up with
us, but by that point we’ll be
on to the next thing,” he says.
In this case, exceeding client
expectations does drive longterm loyalty at the decision-maker
level, according to Weissenberg.
When it comes to day-to-day
execution, professional service
firms have to balance exceptional
service with highly competent
work and minimal transaction
burdens, all of which contribute
to long-term satisfaction and
loyalty. When it comes to client
relationships, it’s critical to strike
the right balance that maximizes
your client loyalty equation.
1. “Stop Trying to Delight Your Customers,” (Harvard Business
Review, July 2010).
2. The Effortless Experience: Conquering the New Battleground
for Customer Loyalty (Penguin, 2013).
UPS/IndustryWeek Management Briefing | 5