The Downside of Client Relationships

By Michael W. McLaughlin

It’s no secret that most professional service providers aim to grow their businesses by building their relationships with clients (even if it’s not always clear that’s what clients want). The goal, of course, is for the investment to pay off in follow-on work and future referrals.

Accenture, the global consulting firm, for example, reports that nearly 85 percent of the firm’s 100 largest clients have been clients for ten years or more.

Naturally, there are advantages to on-going relationships. Over time, and with the completion of flawless work, you and client can build mutual trust that allows each to take risks that wouldn’t be possible with purely client-vendor transactions.

When a client-consultant relationship works well, both parties benefit. With strong, trusting business relationships, consultants report lower cost of sales and higher project profitability; they can define and deliver work more quickly, and with a lot less hassle. That should mean higher quality work, at a lower price, for the client.

The Trade-Offs

In spite of all the good reasons to grow your client relationships, there are trade-offs. I know consultants who have found that great relationships with a small number of clients stalled their careers and long-term financial success.

One colleague built a strong, trust-based relationship with a key client executive that led to several substantial engagements. For three years, the consultant rarely left that client alone for more than a day or so.

Sure, this type of relationship can be profitable, and it’s comforting to have a steady and predictable backlog of work. Focusing on one client for an extended period of time can certainly simplify your professional life.

But my colleague learned that, once you hunker down with a single client, you expose your practice to unnecessary risk.

For one thing, it’s easy to lose touch with the market when you devote your time to a single client. Any marketing momentum you’ve built is likely to suffer—unless you make a concerted effort to stick with your marketing program, which many single-client consultants fail to do.

One consultant told me that marketing while serving a single client was foolish. After all, he said, “If you generate a lead when you’re too busy to take on new work, you are only going to upset the prospective client. It’s best to put marketing on hold until you can handle the work.”

I got a blank stare when I replied, “That logic is like saying you should wait until you’re hungry before you look for a job.”

Too Much of a Good Thing

When consultants work on a full-time basis with a single client, it’s common to see them shift their professional development activities to the back burner. As you immerse yourself in the day-to-day work with your client, it’s easy to put off that conference, industry meeting, or workshop that you know you should attend.

And when you’re with the same client for an extended time, it’s tough to maintain your objectivity. As time passes, you become part of the organization and its culture. I know one consultant who spent so much time with a client that he had a spot on the company’s org chart.

On the surface, that may not sound bad. But in reality, it defined and limited the consultant. He no longer had the freedom to move around the organization. He was neatly pigeon-holed, with well-established boundaries.

Even though a long-term engagement may be good for the bank account, it can be stressful. One of my clients, who was working on a multi-year project, told me of a nagging feeling he had almost every day about the things he should be doing to prepare his business for the future, but wasn’t.

When You Stay Too Long

There’s some truth to the saying that familiarity breeds contempt. So, how do you know if you’ve been with your client too long? It might be a hint if…

• People ask why you weren’t at the company Christmas party
• You help interview all the new hires
• The first email box you check each day is your client-issued one
• You are a regular guest writer on the company’s blog
• You don’t need your company badge to get a discount at the company store
• You are routinely invited to staff meetings
• All of the building security guards know your name
• In client meetings, no one asks who you are
• You regularly wear the client’s logo apparel on the weekends
• You are on the client’s softball team
• The receptionist recognizes your spouse’s voice on the phone
• No one uses your desk while you’re gone.

How Can We Miss You If You Won’t Go Away?

It’s a good idea to take a breather every now and then from any client. Pursue and complete other work with a new client. When you do go back, you’ll have a new perspective on the problems your client faces. Your relationships will be stronger for the break and you can distance yourself from the company’s politics.

It’s possible to benefit from on-going relationships with your clients without sacrificing the long-term success of your practice. The best way is to be selective about the work you choose to take on. Look at each potential assignment and assess how that work will impact your ability to stay visible in your market, keep your skills sharp, and maintain your objectivity.

For example, some consultants jump at the chance to fill interim executive positions, such as COO or CFO. That’s fine if taking on such roles is the focus of your practice. But for others, taking on interim executive positions is famous as a career-limiting move.

Client relationships that result in a regular source of work—broken up over time—offer an ideal situation, especially for small firms. You have to learn, for your own practice, when the actual and intangible costs of those relationships exceed the value. And that will vary by the client, practice, and individual.