Part 3 (2/2)

Growth rate10 per retained client: 5 percent

YOUR REVENUE RETENTION IS UNIQUE TO YOUR FIRM

What should the revenue retention from current clients be for a professional services firm? That al depends on the nature and type of your service Youless than 90 percent retention would be bad; whereas for a firm that has a turnaround or workout practice, any client retention over zero percent would indicate trouble As a law firm, you ht be 100,000 one year when the client company buys another business, and 15,000 another year when al it needs is your review of a few contracts While your industry es or rules of thuet should be unique to your firm

Given these assumptions, here's what your returns look like: REVENUE RETURN OVER TIME BASED ON EXAMPLE 1

It doesn't et is 60,000, 16andleads to a pipeline (such as outlined earlier) is inefficient at best, and ets a green light al the ti spreads in the trade azines and business journals: ”We need to triple our advertising budget to keep up!”

Your coain: ”We need a PR retainer fast!”

You need un business developerlet's buy search engine adslet's sponsor the big conference and send everyone to network and bring hoet serious about o, new data sheets, and a neeb site!”

What does al of this spending get you? Wel, it definitely gets you spending And et other benefits, too, but probably not what you could be getting if you approach building a ine that ork for you in the right way

Playing with the assumptions Back to our exaoals you expect to achieve though yourand business developh, if you could make incremental improvements to your conversion rates?

Suppose, for exaet-to-lead ratio moves from 8 percent to 10 percent

Your ratio of leads to qualified opportunities moves from 30 percent to 35 percent

Your ratio of qualified opportunities to client wins moves from 30 percent to 33 percent

Your client revenue retention moves from 60 percent to 65 percent Therefore, 12 percent of your initial leads close for this exae revenue per client per year: 150,000

Retention of revenue from year to year: 65 percent

Growth rate per retained client: 5 percent

METRICS OF SERVICES IN DEMAND-EXAMPLE 2 Here's what happens:You win 23 clients instead of 14

Revenue in the first year is now just under 35 her than in Example 1

The four-year revenue streaeneration activities is now 85 her than before

REVENUE RETURN OVER TIME BASED ON EXAMPLE 2

Results have moved up quite a bit as a result of proactive choices you've enerate, how many of those leads become qualified opportunities, how often you close new business that's in your pipeline, and hoel you do getting those clients to co department should help local offices understand and identify the i Our offices are located in large metropolitan areas-the population is often in the roups and individuals-may only be a few hundred individuals What people think of as ”public” visibility isn't necessarily e need to achieve in professional services Creating high visibility aets requires a different set of tactics”

-Kevin McMurdo, Chief Marketing Officer, Perkins Coie You also could have increased:Your overal target pool, which, assuinal set, would have yielded you e size of your deals

The annual revenue growth rate per retained client

Note as wel that if you typicaly get referrals from current clients, every new client you win increases your referral base Fro you should keep in enerate

Only Seven Levers Matter Boil it down, and only seven levers matter to increase your revenue: 1 Nuets

2 Number of overal leads

3 Number of qualified leads

4 Number of pipeline opportunities converted to clients

5 Revenue per client

6 Revenue retention

7 Growth rate per client

Everything you could possibly do in h the lens of these levers You shouldn't pursue any tactic inand business development that doesn't move one of these levers up, or keep one of these levers fro

Here are just a few paths you could pursue to ht direction Note that each successive point builds on previous points

1 Increase the Nuets PreparationCreate a universal definition of what a good target client is for your coraphies, industries, or functional specialties within your fir)

Research the overal universe of good targets for your firm (Are there 200 of them, 2,000 of theyLaunch new services to existing clients or existing services to new industries, geographies, or functional areas

Launch or package existing services for targets outside of your current target definition (ie, package services for ser companies)

Database PopulationIdentify co sources, such as data compilers, associations, and third-party list sources

Identify target companies one by one

Identify decision makers, influencers, and referral sources one by one

Increase house list with:Stepping-stone service offers and stepping-stone h direct outreach (mail, e-mail, telephone); semidirect outreach (speeches, seminars, teleseine opti, public relations, social )