Increasingly, firms are reporting higher percentages of backlog because of increased repeat client work. It is quite natural to think of this as a financial strength. However, this strength can quickly turn into a tricky weakness.

Increasingly, firms are reporting higher percentages of backlog because of increased repeat client work. It is quite natural to think of this as a financial strength. However, this strength can quickly turn into a tricky weakness.

It’s in the interest of well-managed firms to keep backlog in perspective and resist the natural tendency to form unseasoned reactions to positive backlog reports.

Yes, certain kinds of risk can actually increase rather than decrease when a depth of backlog forms from repeat clients. This is akin to the analogy of having too many eggs in one basket without proper diversification.

Quite often when backlogs grow, and repeat work percentages advance, firms fall into the trap of providing incrementally commoditized services to their long-term clients. This can result in “service sameness” that grows tired with clients and threatens the vibrancy of the designer-client relationship. Risk-adverse professionals falsely assume that a depth of backlog will prevent them from financial surprise. However, as clients size up the sometimes bland and predictable service experience during these periods, they become restless for change. They want more, and this can be either incrementally or as a process enhancement.

The illusion of financial safety can be risky business. When fee backlog increases beyond 12 months and when 60-80 percent is from repeat clients, the risk is particularly high. Leaders in firms need to stay alert and stay relevant. Coach your professionals to:

1. Lead a culture of continuous improvement.

Don’t let your organization sink into mediocrity. Always measure and track the quality and productivity of your project management teams.

2. Assess client satisfaction.

It is wise to have an outside third-party interview clients confidentially once a year using a diagnostic that measures satisfaction. Regularly mine your clients for value migration data. Find out where the soft spots are and address them.

3. Position your firm well within the new demographic and service trends to stay relevant.

Each building sector is affected by regional economies and demographics. Your firm should deliver services more effectively each year. These benefits should be unique, measured, and clearly understood as a result of your position in the marketplace.

Remember, repeat business does not indicate client loyalty to your organization. It indicates a habit that may or may not equate with satisfaction. Client behavior can and does change fast. Behind your back, your clients may be paying the bills while interviewing other firms.

Apply a tighter grip managing the good times when backlogs are strong. Break the gravitational pull of complacency. Commit to raising the bar, and actively build even stronger relationships with your clients. Smart architects, engineers, and designers know that repeat client work is actually inherently paradoxical and is at once both delicious and dangerous.

—James P. Cramer