What’s the difference between a client and a customer?
That’s a question I found myself asking repeatedly as I read a book I’ve had on my shelf since last fall, when Georgie Shockey, a principal with Ruck-Shockey Associates, recommended it to me.
What Your Clients Won’t Tell You (and Your Managers Don’t Know) was written by John Gamble, president of Atlanta-based Tenacity, Inc. Gamble is a recognized authority on the subject of client retention, especially in the foodservice industry. It’s a pretty quick read, and at its base level, is a guide to his “Clients for Life” system, an approach to managing client relationships in ways to ensure that they have staying power when the inevitable contract-renewal bids come along.
On the surface, many of Gamble’s key points are basic common sense. But, as he points out in his introduction, “common sense is not always common practice.”
Gamble’s right about that. There are countless examples in our industry and others that show how easy it is for service companies—even those with top drawer reputations—to fall down on the job. And sometimes it can be weeks, months and even years later, when the business is up for bid, that senior management discovers how difficult it can be to retain an account if some very simple common sense rules have been broken.
And while the stores are filled with books on how to satisfy customers and manage customer expectations, the issue of client satisfaction goes quite a bit deeper than that.
So what is the difference between a “client” and a “customer?” Gamble points to one major difference in his introduction. “While there is no doubt that retaining customers is critical to the owner of a restaurant or auto parts store, the loss of any one customer isn’t likely to affect the viability of the business,” he says.
“In contrast, when an advertising agency, management services firm or engineering company loses a client, the ramifications to its business can be significant…A client’s business is usually committed for years at a time…the services provided are so important that a lengthy, negotiated contract guides their delivery…the transactions involve six and often seven-figure sums…and the decision to end the affiliation—which often requires as little as a 30 day cancellation clause—involves massive changes for both organizations.”
No wonder the subject of client retention receives so much attention from the contract management companies. In a mature industry like foodservice, much of the “low-hanging fruit” has already been picked. New accounts that are easy to land and service and which have the traffic volume and participation rates to generate reasonable profits are harder to find. The competition for “good accounts” is intense.
Mostly, new business has to be won away from competitors or has to be “converted” from self-operation. And that’s not as easy as it used to be, either.
One reason is that the directors at self-operated foodservices have increasingly learned to see their administrations and institutions the way management companies do. Which means not only running a great foodservice, managing a tight budget and exceeding the expectations of customers…but also learning to manage the client-like relationship an independent operator has with an administration.
That point of view is also becoming more important as foodservice directors increasingly find themselves in the position of running multi-location, multi-site operations. While a half dozen locations may indeed be part of the same institution, healthcare network or school district, the local administration (and staff, and customers) at each will have their own service expectations. Any FSD with multi-site responsibilities who tries to take a foodservice program—even an award-winning one—and make it into a “one size fits all” solution will inevitably run into the same kinds of client retention issues that management companies face.
The art of managing client relationships isn’t one that always comes naturally, and it isn’t something you can pick up overnight. But it is an indispensible professional skill in the foodservice industry today, whether you work for a management company or run an independent operation. The reason why is summed up well in one of my favorite quotes from Gamble’s book, one that is thousands of years old and comes from Confucius.
“To open a shop is easy. To keep it open is an art.”