When I began consulting with Jim Redpath of Redpath & Co. many years ago, we discussed my experience in the large accounts division of IBM where the focus was on strategically significant clients. At the time, the St. Paul-based firm was doing $7 million in annual revenue. Today, with organic growth fueling a $40 million-plus revenue stream, Redpath is a model of "going up-market."
Ryan Everhart, the current managing partner, has been integral to that growth and anticipates leading the firm to even greater heights. In a recent conversation, he explained how Redpath, an employee-owned firm founded in 1971, has innovated, climbing up and over the accepted definition to redefine the strategic client growth experience. The approach is built on a foundation of discipline, organization, accountability and measurement.
Dramatic disruption
Jim Redpath led the initiative to disrupt the norm, opening the firm to a dramatic uptick in large-client revenue. Known as a "client manager system," the approach is unique in mid-market firms, because clients are developed at the top and trimmed from the bottom. The focus on the largest accounts was achieved primarily by introducing a five-figure minimum for new business, and as partners retired, smaller clients were moved on. Rather than leave them out in the cold, though, Redpath helped them find a soft landing at firms where they were a better fit.
The method recalls my experience at IBM, where professional account executives drive revenue in selected large accounts. In public accounting, by contrast, partners often serve as gatekeepers. Proprietary about their book of business, they sometimes protect and limit access to clients, restricting their access to potentially attractive services. The client manager system is an example of an account executive implementation. And the AE approach is at the foundation of a key client program. In addition to establishing a firm minimum and trimming low-revenue clients, Redpath:
- Instituted a cap on individual partners' book of business.
- Upended the traditional partner-client ownership model, with a client relationship manager who "owns" the client and brings in experts to meet the needs — in essence, a "land and expand" focus, like an AE.
- Designed a compensation plan that rewards the CRM for all revenue generated in their "named" clients while still maintaining, per Ryan, the "solve, but don't sell" mentality.
- Rewards partners for bringing in business, even if it doesn't stay with them.
- Rejected hourly billing for a project/fixed-fee model.
- Made it easy for clients to communicate with the CRM.
- Instituted a quick, monthly team meeting to brainstorm, strategize and ensure coordination of each account.
- Holding at least one quarterly, in-person client meeting.
- Put in place a tracking system to increase accountability.
Proof of concept
The client relationship manager is measured on achieving same-day response to all client requests. Ryan credits the response policy with a nearly 100% client retention record. As well, revenue per client is religiously tracked as an important element of CRM compensation. Creating a responsive, proactive, innovative, value-driven client experience has become a strong competitive differentiator, all but eliminating small, one-off engagements for core services. Redpath's robust system has succeeded wildly. In growth-minded firms, the account executive approach creates relationship leaders who understand the politics and power in the client decision-making process. AEs use this skill to reach high-level influencers in client organizations, crafting and executing a strategic and tactical plan to drive significant revenue.
