How To Foster Customer Loyalty

Keeping a solution-provider business thriving means you have to work harder than ever to earn the merit badge for loyalty.

Emerald Solutions certainly earned one when it was hired by toy giant Hasbro to do traditional business strategy two years ago. Later, when Hasbro created its interactive division, Emerald showed up again to offer more advice.

"When it got to the point of getting into technology-related work [with Hasbro-backed Games.com], we rolled in both our design practice and customer-interaction and logistics practices," says Kevin Greenan, Emerald's vice president of the customer interaction practice. "Once we've gotten in with larger clients and proven ourselves on the first project, we've shown a good ability to stay in there."

Staying close to Hasbro and showing off its capabilities helped Emerald establish a long-standing relationship with the company. It also illustrates an important lesson in cultivating client loyalty: Take the initiative and show your client everything you can do.

Money Matters
The solution-provider landscape has gone through an upheaval over the past year, changing the way solution providers are building relationships with customers. In a time when customers expect more, solution providers have to go beyond just meeting deadlines and making courtesy calls.

Money, of course, can often become the biggest crack in the dam. For many e-services companies, the answer is striking deals that prepay before the work is started--heading off potentially damaging problems before they begin.

When Art Technology Group (ATG) sold $9.6 million of its accounts receivable to Silicon Valley Bank in the fall, analysts speculated the ISV was struggling with penniless dot-com customers. ATG, however, said the bank had offered it an attractive deal and that the 10 clients who owed money were not Internet companies or dot coms but "blue chip companies and credit-worthy customers," according to CEO Jeet Singh. However, Singh also says that the receivables were from "large enterprises that historically are slow-paying." The situation left many asking that if you can't get established billion-dollar corporations to pay their bills on time, then who can you count on to mail the checks?

"We do see [larger, slow-paying customers] sometimes," Emerald's Greenan adds. But Emerald has several agreements with bigger accounts that prepay for services. AT&T, for example, which has employed Emerald on about a dozen projects, had compensated the solution provider well in advance for work that was wrapped up at the end of last year.

The Next Level
Relationships frequently falter when a solution provider rests on its laurels. Hence, going to the next level--perhaps introducing a new strategy or technology--is vital to keeping customers loyal. If customers aren't demanding more services on their own, then solution providers must take that initiative.

Knowledge Strategies Group (KSG), a New York-based solution provider, faced this issue with its client, Bloomingdales.com. "It became clear we needed another technology for the site," KSG project manager Adam Beckerman says. So KSG took the reins, hammered out a new strategy and implemented cutting-edge software, including Allaire's ColdFusion, and the result was "a world of difference," Beckerman says. Mastering new software and heading in a different direction was a major undertaking for KSG, but one that was worth it. The solution provider is still working with Bloomingdales and has guided the company to an even higher level with another site relaunch last fall.

The Personal Touch
Familiarity is also a key facet to building client loyalty. For Emerald's five largest clients, the solution provider built program management offices with teams that stay in place for each project. "It's not a revolving set of faces for the client," Greenan says. "There's a cadre of senior people that are always in that relationship."

That kind of dedication may mean some Emerald employees know their customers better than they know their own co-workers, but it's a formula that works: Emerald averages more than four projects per client, and the number is higher for its largest customers.

Growing With the Client
Ultimately, customer loyalty in 2001 will rely heavily on what new services solution providers can actually provide, driving them to change and grow.

"One of the biggest challenges is breadth of services--how can a company have enough arrows in its quiver to continue to help a customer across its enterprise over an extended period of time?" Greenan asks.

That question led Emerald to build six national practices during the last few years, which included acquisitions of a strategy company and a design business. Many top solution providers have made similar additions. Boston-based Internet consultant Viant, for example, added a digital growth services arm last summer to help clients evolve after their e-businesses were built. Viant's Beantown neighbor Sapient created two new service groups to address the growing needs of customers in the retail, manufacturing and distribution fields.

With the benefits of long-term, productive relationships at stake, it seems if solution providers aren't growing, then they're dying. "That's the key," Greenan says. "Can you build the breadth of capabilities across the enterprise for clients?"

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