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by Brad Langley | May 4, 2017

Brad Langley"I'm working twice as hard for the same amount of profit." That's what I hear all the time from third-party planners. It makes me wonder… We devote so much time and energy to winning new business, but do we ever stop to think about what makes a good customer?

Some would answer simply, "the ones who pay." But revenue tells only part of the story. For example, do you have customers who always pay late? Require you to pay deposits or labor costs upfront on their behalf? Are they labor-intensive, constantly changing direction, yet expecting you to meet the same benchmarks?

When evaluating a customer's real value to your business, it's important to consider not only revenue, but profitability, too. Here's a new formula -- the Customer Value Quotient (CVQ) -- that provides a holistic approach to evaluating customer worth. It takes into account revenue as well as cost to serve, including staff time (sales, support, billing), cash flow, brand reputation and employee turnover.

CVQ = Customer Lifetime Value/Cost to Serve

How do your customers rate? A score of 3 or less is a problem, and you're in the clear with a CVQ of at least 4 and preferably 5 or higher. Let's say your client retains you to produce one big meeting annually for two years at an estimated total revenue of $750K. Sounds pretty good, right? Diving deeper, though, you find your estimated cost to serve is $275K. That puts your customer in the Danger Zone, with a CVQ of only 2.72.

With the goal of elevating your entire client roster to CVQs of 5 or more, take these steps below to set the stage for mutually rewarding relationships.

Collaborate to win
Toss the old-school way of thinking that clients only want to see the end product of your work. Event planning today is all about collaboration. A new generation of sourcing technology is specifically designed to build transparency and keep customers in the loop. These tools supercharge planner efficiency. So you can raise CVQs easily by reducing your Cost to Serve -- while improving customer service, too.

Start by sharing bid summaries and updates regularly with customers via read-only web links. Or, kick transparency up a notch and provide a direct portal into your planning process. Let customers see bids returned and concessions won in real-time. You'll gain their confidence faster when they understand the value you add throughout the planning stages.

Sourcing today is a dynamic process. The upside of transparency is timely feedback, so you can stay in step with customers' evolving needs. Your team will stop wasting time on non-value-added activities and gain valuable insights to achieve customer goals fast.

Put dollar value in the limelight
Are you being too modest? Most of us expect others to automatically recognize the value we add, but that's hardly a winning business strategy. The reality is, clients are too busy to capture and document value added and expect planners to do this as service providers.

Use collaboration tools to showcase the dollar value you add in three categories: Concession Savings, Risk Mitigation and Cost Avoidance. This is no time for a data dump; be selective and key in on the data that aligns with your customer's reasons for hiring you.

There's no longer a need to "stop the presses" to pull data. Let technology capture and aggregate it for you based on your event's key performance indicators. With analytics tools doing the heavy lifting, you can hone in immediately on essential data points. Examples include: savings and spend, past rates paid, brands your organization and customer books and saves with the most, other meetings in the works companywide and more. Adopt a broad, companywide perspective that enables you to see opportunities customers at the division level often miss. Leverage these insights to gain additional concessions to further increase meeting ROI.

With the right analytics tools, you can quickly create simple graphs that show dollar costs going down and savings on the rise. It's a powerful way to showcase all the value you drive.

Winners
Winners separate themselves from the pack and lead clients to better meetings tomorrow. In a fast-changing market, these are the ways to differentiate yourself from competitors:
· Know your ideal client profile
· Stop wasting time on non-value-added work
· Use data to quantify and showcase your worth

With the latest advances, you can give customer loyalty a giant boost and elevate every CVQ to an impressive 5+.

Brad Langley, CITE, is a 30-year incentive- and travel-industry veteran and vice president of third-party markets at etouches.