Are Your Clients High Effort Or High Reward?

In the pursuit of growth, many of us take on clients out of necessity… to cover the costs and to cover the bills and to make the results we want.

Over time, if we take on clients for necessity, we end up working with people that don’t reward us for the effort we put in and that isn’t the business we want.

I’ve been working with two or three clients in the last three months who have clients that they really need to say “No” to. If they did, it would free up space for clients that would reward them more for the effort they put in.

If you want to evaluate the clients you have and you need a framework to think about who you should work with, read on, I’m going to talk through how to do that and what it might mean for your business.

Effort and reward. Here’s what it’s all about.

You have only so much capacity in your business, including the people, tools, and the resources you use working with clients.

Some of your clients can be high reward and some will give you low reward. In defining high reward I would say that is it’s not just money. It’s also – is there a good fit with your business? Do you like working with them? And is there a sustainable pipeline of work that is what you’re best at?

Low reward means no one enjoys working with them and they’re not really profitable.

One client I was working with had a problem because they were treating all their clients the same. You may recognise that – you treat all your clients the same and don’t have different models. One of the really cool things that comes out of this matrix is you can have different models for different needs. Clients who fit different places in this matrix. So let me talk it through.

The first line (low reward/low effort) is when you often start working with clients, they’re low reward, low effort, okay? This is kind of an investment, beause you’re not getting paid a lot. It doesn’t cost you a lot, but you’re hoping one day they might become a big client or more profitable. And that’s cool, I think that’s fine and the problem comes if a client stays here. If they stay in low reward/low effort, that’s a problem in the long term because they use space for another client.

The second area that we’ve got is high effort/low reward. Okay. These, I could write the word, but I wont. We all know what sort of client, these are tyre kickers. People who use all your resources, use all your stuff, but aren’t willing to pay for it. These are the dudes we’re going to say “No” to. Over time, try and move them from taking up too much capacity in your business. Over time, the ones we invest in from this category, they end up being high reward/high effort customers. And this is a great basis for a partnership.

With the high reward/high effort clients – if we put in effort, they pay for it and it’s awesome and they value us and that’s a real relationship of equals. It feels good. So ideally, the client I was working with, our first aim was to have five clients in the next 12 months that are this high reward/high effort level. We’re going to have some low reward/low effort clients that we’ll move up to high reward/high effort, but we’re aiming to have five clients in that partnership level.

I’ve been talking to this business owner about the fact that we want one client to move down to high reward/low effort and this is a really interesting space. This is where we get high reward/low effort. We’re getting massive rewards and benefits and money from working with them, but we’re not putting a whole lot in. This is where we start to get leverage.

Think about your client base at the moment and map them out on the effort and reward matrix.

If you could free up space and capacity in your business who would you say “No” to?

Are there one, two, or three clients that you could, respectfully, after having a value conversation maybe say “I don’t think were a great match. I think we need a divorce.” And if that freed up capacity, which of the one, two, or three clients that might be down here in low reward/low effort where you think there’s a good match could you move up into a partnership?

Also: are you overservicing your clients? Are there a couple of clients up here at the partnership level that probably don’t need as much from you but might get the same value? I know the company I’m working with, they overservice because they are a little bit insecure about what they provide. If you ask yourself the question of “Could we provide less and get the same result?“, then you may be able to move a client into this low effort/high reward space down here and that’s where things start to get interesting.

Is that helpful? If it’s helpful and you want to talk it through, get in touch and we can do this with your team – where we start to evaluate your clients and get you some focus for the next 12 months. I hope this has been useful, talk to you soon on The Reason & The Road.