How to make client relationships better

make client relationships better: heart padlock on chain

This post isn’t about winning a pitch or clinching a deal: it’s about building successful, long-term relationships with clients.

How? The clue is in the title: make client relationships better.

We’ve studied the behaviours and tactics of some of the industry’s best relationship bankers – talked with them, questioned them and listened to them – in order to define what actually makes them stand out. And at the heart of the their success is prioritisation: dialogue over transaction, inclusivity over isolation and content over ceremony.

Why make client relationships better?

Before we dig into the how, it’s worth remembering why relationship marketing is so important. While it is certainly more respected by clients, it also leads to more profits.

A study by Frederick F. Reichheld and  W. Earl Sasser, Jr. found that reducing client defection by just five percent, increased profits by 25 percent and MBNA America has found that a five percent improvement in defection rates increases its average customer value by more than 125 percent.

Why the big boosts in profit? Research by Bain & Co shows it’s because:

  • Established clients spend more
  • Regular clients cost less to serve
  • Satisfied clients refer new clients at no cost
  • Satisfied clients will pay a premium to Investment Banks / Advisors they know and trust
  • Retaining clients creates a barrier to entry and makes share gain difficult for competitors

Ultimately, if you spend time building better relationships you will have more loyal customers that trust you with more of their wallet share. They’ll turn to you for advice before anyone else and you’ll know about upcoming challenges and opportunities before your competitors.

Dialogue over transaction

Understand that approaching a client is a continuum.

The most important thing to remember when you’re building a client relationship is that it takes time. You have to take the time to learn about them and their market, listen to them and work with them to generate new ideas. And they need time to get to know you before they begin to trust you. This means a substantial commitment of time on both a corporate and individual level.

This also means consistency. A relationship isn’t something that’s built around a single transaction – it’s an ongoing dialogue with the client during good times and bad.

 Getting to know you

Personalise the relationship; be credible with a client (have the technical knowledge). Tell him something he doesn’t already know

In order to get to know a client – and we mean really get to know them – you need to:

  • Invest time in both professional meetings and social networking.
  • Spend as much time as possible at the client firm listening to what the client says – they know their own business, the market and other investment banking offers much better than you.
  • Work to gain access to the ‘C-suite’. As one interviewee said, ‘unless you talk to the CEO, you don’t know what’s going on.’
  • Know what’s going on in the market and the motivations of the different micro-segments within the industry group segmentations.
  • Understand the client’s investors.

Inclusivity over isolation

Make client relationships better: people working together in an office


Inclusivity works on both sides of client servicing: you have to include people from across the client firm in your interactions and you have to bring in a diverse team of your own to support the overall client relationship.

A client is the sum of its parts

Effective relationship marketing is dependent on strong relationships not simply with the ‘C-suite’ but other domains such as shareholders, influencers, partners, employees and alliances. It’s also dependent on understanding the relationships between and within those domains.

You must get to understand the internal dynamic of the relationships inside the client organisation – for example there may be problems between the CEO and CFO.

Identify the client decision-making unit and segment it by level of importance to your organisation and overall decision-making function to help you prioritise your time and your team’s resources.

You should also deploy your junior colleagues to network with peers at the client firm – you often get better information and they are, after all, the client base of the future.

Learning to let go

You need to find ways to interact with clients at different levels – a multi-touch approach.

The best relationship bankers don’t act as a gatekeeper to their clients, but gatekeepers to their clients’ interests.

Rather than simply encouraging other bankers to engage with the client, give them the latitude to lead key interactions independently of them. Encourage a team effort and keep your organisation informed of relevant developments at the client firm.

Why do this? Because no individual can cover every base in the client firm, which we’ve already established is vital.

Building a diverse team to service the client also generates better ideas and reach more balanced decisions. Many relationship managers don’t involve senior bankers because they fear failure, but knowing when to deploy the expertise and authority of senior bankers is key to developing the most successful client relationships.

Content over ceremony

The best relationship bankers provide valuable content that their clients need, when they need it, rather than sticking religiously to the ceremony of formulaic meetings.

Migrating from a financing to an advisory dialogue, however, has to be driven by the conviction on the part of the client that your thoughts are imaginative and innovative.

In order to create this content, you need to know what your client needs. And the simplest way to establish what the client needs is to ask them what they are interested in regularly.

Do more than just ask though. Challenge the client and challenge your own product team. Stretch your product knowledge and look for new ways to solve problems rather than running off the same product list the client’s seen a hundred times before. Know the market intimately, know the business intimately and know what your client needs to know.

Make client relationships better: the McKinsey value delivery model

The McKinsey value delivery model follows this process, turning the traditional product-focused marketing model on its head. The idea behind it is that clients buy promises of satisfaction, they don’t buy products.




Avoid failure: stay relevant

No advice would be complete without a few health warnings. If you want to make client relationships better, then you need to avoid common ‘trust breakers’:

  • Credentials. Don’t use too many and only use those that are directly relevant to the client’s needs
  • Ideas. Don’t pitch too many ideas otherwise it sounds like you’re reeling off a standard list. Make them specific and relevant
  • Don’t over-promise. Simple as.
  • Consistency. Remain consistent in your advice and in your coverage and be sure to follow up effectively.

Finally, be sure to show a little humility. It’s not so much a trust breaker, but if you can admit when there’s something you can’t provide rather than forcing the wrong product to fit, your client will thank you for it. Point to a competitor product that will meet the client’s need you’ll gain credibility and trust, elevating your relationship so that the client will be more likely to come to you for advice in the future.

Download Templar's free guide to maintaining long-term client relationships

Send an Enquiry