The Classic Client-grading Grid

This one's a review and update of an earlier piece, a matter of critical importance for any professional or entrepreneur. It's also useful for other relationships such as Facebook "Friends", but that's for you to figure out!

In very simple terms, clients can do you good or do you harm. Cumulatively, they will make or break your career. There are two ways of thinking about this - the first is economic, which is the subject matter of this Briefing, the second is reputational, which we'll examine shortly.

In any study of economics you consider the input costs against the returns, and this grid is that simple. Some clients take a lot of resources, some very few. Some clients yield large income, some give you little. It doesn't take a "rocket surgeon" to figure out you'd like to get the mostest for the leastest.

Everybody quickly understands that in a perfect world, every client would be the "A Client", and the more you gear your practice or your business to achieving that, the better.

It's also pretty obvious that the "D Client" is the least desirable, and the better you are at avoiding them, the better for you. Where it gets trickier is deciding what to do with the "B Clients" and the "C Clients".

The "C Client" is a high-revenue proposition, so would at first seem attractive. If they are consistent, predictable, and manageable, there may be something to be said for them. The problem is that the "High Cost" factor is not always just simple line-item overhead, but more often intangible hidden costs such as staff friction, inefficient use of time, and most often, professional risk. It's usually the "C Client" who can suddenly go sideways on you, dragging you into a nightmare of negligence claims, professional investigations, and staff turmoil. Even if you survive all these, the costs can be staggering.

The "B Client", on the other hand, is kind of like coffee for McDonald's. Not a big dollar profit on each cup sold, but a million cups can make for a pretty good payday. If your system is efficient and your staff well trained, equipped, and organized, you can make a lot of money if you have enough "B Clients".

But there's more: "B Clients", properly nurtured, can turn into "A Clients", or they can introduce you to "A Clients". The lovely old couple for whom you do a small renovation project may have a daughter who is an orthodontist who has been looking for someone really competent but really approachable to help her design her dream home on the lake.

Now, hopefully, little needs to be said about the "D Client" except this: without careful client intake and management, these people will find their way into your professional life, waste your time, burn your profits, and make you miserable. Your front lines of defense against these clients are well-trained, intuitive staff, and thorough, picky, intake processes which allow no exception.

In an upcoming Briefing we'll revisit this analysis, but from the perspective of the reputational benefit of the client interaction.

(This message is especially important for early-stage professionals. Do one a favour and pass this along. Tell them I do a lot of consulting for early-stage professionals at pretty modest rates, if the case is right.)

What I do: I help professionals and their firms exploit the magic of their unique Giftings. [email protected] 613-862-3489