IS YOUR BUSINESS GROWTH ORGANIZATION BROKEN?

It’s not always about redesigning the growth organization; it might be time to refresh the business growth process

As many professional services firms are struggling to reach their growth goals, they are questioning the effectiveness of their sales organizations. Business growth organizations are well-designed and likely to succeed as long as they have all the necessary elements aligned with the growth strategy of the firm: support tools, systems and skills, as illustrated in this simple grid.

Before undertaking the complex and time consuming process of re-designing the sales organization, I’d first look at updating the sales process, sales tools and the roles of the various business-growth-related parties, such as marketers, business developers, billable professionals and sales leaders. These upgrades are driven mainly by smarter and better informed buyers who are squeezed by constant cost cutting demands.

Much has been written and said about the evolution of the business growth / sales process over the past few years, especially for professional services firms. You’ve most likely run into a number of proprietary ones with fancy acronyms. They still follow the very traditional process of “awareness – education – sale – loyalty”, albeit the various stages being called something else or further segmented into smaller ones. One thing that’s become clear and I’ve been advocating is the shift from pre-packaged solution-based approach to “insight selling”, as coined by Brent Adamson, Matthew Dixon, and Nicholas Toman at CEB. I have been referring to it as a consultative or problem solving selling technique. Its differentiation and strength is multifold:

(i) Cultivating prospects who are most likely off the radar of competitors (because the identification criteria are different from the traditional ones of industry, size, etc.);

(ii) Gathering intelligence and developing business understanding that goes beyond the orthodox one of budgets, purchase decision maker, etc.;

(iii) Sparking dialogues that don’t steer towards uncovering already recognized needs and solutions, but leading to unrecognized problems and drafting solutions jointly; and

(iv) Building client value and long-term relationships, which facilitate future, post-engagement conversations and additional opportunities to work together.

It’s an approach that calls for upfront investment in terms of updating the roles and skills of the business growth parties, as well as the sales tools, and in return positions the organization on a different level from competitors to avoid price bidding and dictate deeper terms of engagement.

Based on extensive research, Adamson, Dixon, and Toman recently released another article on “insight selling,” titled “Dismantling the Sales Machine” (for HBR, November 2013). As always, I appreciate their professional research, which further supports the consultative approach I’ve been advocating. In this paper, the authors refer to “insights selling” as a process where “sellers challenge customers with disruptive insights into their business and offer unexpected solutions.” It no longer encourages certain “check-the-box” compliance sales process and activities, but rather emphasizes the importance of identifying the right prospects, giving professionals the freedom to make judgment calls, and expanding the use of innovation and creativity to design solutions. I wholeheartedly agree with this approach and couldn’t have defined it better myself, with one exception. Unlike Adamson, Dixon, and Toman, I am a supporter of “compliance” of the sales process and believe its value should not be understated. A couple of the statements in the article make it sound as if the authors believe that results justify sales actions, regardless the associated cost. When it comes to compliance I am not referring to supporting the use of certain sales activities, but the process, which is critical in measuring efforts and effectiveness and efficiencies of these activities. What I support is that when it comes to sales activities, a/k/a business growth tactics, one size fits none. Successful sales tactics vary from one professional to another. Compliance should ensure that there is a process in place that guides the sales professionals and ensures that activities that work for professionals are taking place.

As I’ve mentioned in the past and as spelled out by Adamson, Dixon, and Toman’s research, this new sales approach calls for updating the various business growth roles, changing team formations, skills and tools. Sales professionals (a/k/a business developers, billable professionals, etc.) should work on developing their advisory skills and use both emotional intelligence and IQ. Sales leaders (a/k/a CSO, CMO, Managing Partners, etc.) should become coaches, facilitators of information and encourage idea generation and collaboration. They should emphasize the power of individual networks and a long term view to prospects. The latter dictates a fundamental shift away from the traditional transaction oriented approach towards the one of creating value for clients and developing true relationships. In order for that to succeed, sales leaders must look for quality of their business growth pipeline opposed to velocity as key performing indicators (KPI’s) and most likely re-write the existing compensation model. Sales leaders and organizations should equip sales professionals not only with new skills, but also with tools that help identify prospects and prioritize actions, create demand and spark solution innovation, and lastly, provide decision making guidelines for making confident judgment calls.

Is it time for you to refresh your sales process, cease the bidding war with your competitors and improve your business growth results?

By Mira Ilieva-Leonard

© 2010-2013 Copyright Mira Ilieva-Leonard / iStile All rights reserved

WHAT HAVE WE LEARNED FROM THE COLLAPSE OF DEWEY & LABOEUF

An organization development case study for professional services firms

A year and a half ago I posted my piece “For the greater good or eat what you kill”, which used the much talked about collapse of Dewey & LaBoeuf to explore hypothesis behind the destruction of intelligent professional services firms, and make recommendations to avoid such a fate. It is that same unfortunate story of Dewey & LaBoeuf, told by James B. Stewart for the October 14th 2013 edition of The New Yorker that inspires me now again to share my thoughts and re-emphasize on the key organizational development factors for professional services firms.

It is a story worthy of an Oscar® nominated movie script. There are mafia connections, luxury lifestyle, disturbing emails, and backstabbing, peppered with greed and egoism. I am not talking about Tom Cruise’s movie “The Firm”. I am referring to Stewart’s recent article for The New Yorker titled “The Collapse” . For juicy details I urge you to look up the article; for the purpose of this blog I’ll focus on the key takeaways.

After a careful study of the characters, the various circumstances and the storyline of the events, leading to the bankruptcy of Dewey & LaBoeuf, James B. Stewart concludes that “cooperation and mutual respect” is at the heart of successful professional services firms. I wholeheartedly agree with the author as I mentioned in my original piece.

Building up to that conclusion and referring to industry benchmarks, Stewart talks about a number of factors that influenced, or one might say accelerated, the faith of Dewey & LaBoeuf: size & structure, compensation model, and culture. While industry and economic trends might have guided many firms like Dewey & LaBoeuf to look for alternative growth models and structures, the “vereins” have yet to be proved successful, at least in the legal industry. Vereins, defined by Stewart is “a constellation of separate legal entities doing business under a single brand.” I see how the author reaches that conclusion however, I am not fully convinced. Looking across industries to the advisory world of the BIG 4, their model, in terms of size and structure, doesn’t seem much different than the one pursued by Dewey & LaBoeuf. They, however, have seem to have managed to make it, although they have suffered a decrease in their numbers today. Therefore, while size and structure matter, I’d advocate that the compensation model and culture are the heavily weighted levers that make the ultimate difference, and the ones that lead to demise in Dewey & LaBoeuf’s case.

As seen in Stewart’s article, a compensation model, mainly incentivizing rainmaking can encourage wrong behaviors and be counterproductive. Similarly, a culture allowing for a digression from the clearly defined traditional firms’ values of “loyalty and collegiality,” often has a hefty price. Interestingly, this is where Stewart’s statements support my hypothesis of the grave and destructive effect for firms, using compensation models feeding the “eat what you kill” mentality and encouraging narcissistic behavior, as outlined in “For the greater good or eat what you kill”. This piece and blog is not about being right, but about identifying problems and applying lessons learned to solve them. And so, if compensation models that heavily weight rainmaking and narcissistic firm cultures are directly correlated to the failure of Dewey & LaBoeuf, and potentially other professional services, then what’s the solution?!

It all comes down to “cooperation and mutual respect”. That’s the culture that successful firms foster and Dewey & LaBoeuf blatantly ignored, according to Stewart. In my past articles I refer to that as collaboration and encourage organizations to reward it, because it provides for learning, best practice sharing, better solutions design and a team client approach…for the greater good. Taking a prescriptive approach to collaboration, similarly to the one in my “One for all: all for one” article, here are a few tangible points to consider when looking to inspire collaboration:

• Explore a firm development strategy with collaboration as a core attribute, or even as a sustainable competitive advantage. Take an all-encompassing approach: from recruiting and retaining talent, to growing the firm and boasting team performance.

• Define an organizational structure that fosters sharing and cooperation, spread throughout the firm: from basic operations to compensation models, as well as support and client facing practitioners.

• Employ tools and systems that encourage communication, knowledge sharing and transparency, which are some of the key components of collaboration.

• Establish functions and recruit / develop professionals who not only understand the value of collaboration, but have the necessary skills to build and cultivate collaborative culture.

© 2010-2013 Copyright Mira Ilieva-Leonard / iStile All rights reserved

ON THE TACTICAL SIDE OF BUSINESS GROWTH I: Growing the firm and the role of the marketing team

Here’s a short series focused on business growth implementation, a collection of my thoughts, popular opinions and current trends...

The importance of lead generation and what it means for marketers

New clients are necessary not only for the overall development and growth of a firm, but for its survival. Clients come and go. In a competitive world, driven by tight economics and intelligent buyers, clients’ attention is constantly distracted by multiple, smart service providers who test loyalty and threaten client relationships. Firms discounting the value of constant development of new clients are laggards or soon to be such. On the other hand, firms understanding its importance know that a strong marketing team is instrumental for the business development process and fully utilize and enable those resources.

The definition of the marketing function and its deployment depends on firms – their size, strategy, and outlook. For some firms, marketers should be focused on brand management and internal and external communications only – i.e., they facilitate branding activities, develop and distribute newsletters, maintain communication materials (websites, brochures, etc.), create client and firm events, etc. For others, marketers are a key part of the executive team in charge of leading and developing the firm, and are involved in the entire sales cycle. In this latter scenario, in addition to managing branding and communications, marketers are engaged with strategy and service development with the BD and sales teams as well as client retention, and all of the support tasks that accompany this strategic function: from gathering market intelligence, supervising the CRM systems, developing proposals, and creating loyalty programs, among others. These two examples demonstrate polar opposite views of the role of marketing in professional services firms. As long as firms realize the need for constant client acquisition they should define the marketing role to ensure it includes direct connection to growth, especially if that’s not already the case. Marketers should also realize that they have an opportunity to have a bigger impact on the overall development of the firm and provide a greater value by tying their activities to revenue generation.

In other words, marketers should consider that part of their responsibilities includes engaging, inspiring and supporting both the firm and professionals to grow the firm. So, what might that mean and look like for marketers? Managing the lead generation process...
I’d recommend that marketers start by having a clear understanding of the strategic direction of the firm as a whole, and its constituent practice groups and/or individuals to ensure proper prospect targeting. They must know what “a good lead” looks like so that they can better find them and communicate with them. Marketers must work with the rest of the parties involved in business growth (partners, business developers, etc.) to define growth objectives in terms of revenue numbers, and translate them into leads to incite actionable plans.

Measuring processes, tracking systems and reporting tools are critical for lead generation. Here marketers must look to the IT and financial teams for cross functional support. When elaborate CRM and budget tracking tools are already in place then marketers must recognize their full potential, adopt them and demonstrate their key benefits to the rest of the stakeholders. If no such systems or processes are in place, then marketers should develop and use simple practices and tools such as excel sheets. Remember: one can’t manage what one can’t measure!

A big part of managing the lead generation process is the tangible execution. Marketers must set up and run lead generation campaigns: often a combination of thought leadership platforms, social media tactics and direct outreach (see “lead generation tools” below). The objective this time is to go above and beyond the traditional awareness building campaigns. It is to identify and engage prospects into a two-way communication, which will eventually facilitate connection and develop a relationship. This is often a long and multi-step, multi-dimensional task that calls for patience and discipline.

The proper implementation of lead identification, touch and follow up with the right content and the appropriate frequency are just as important as equipping the firm and its professionals adequately in order to convert leads into an actual prospects and revenue. Marketers should communicate the value and plans of the various lead generation campaigns to the key stakeholders. They should create tools, cheat sheets, articulating value propositions and key talking points, and “how to” guides for specific thought leadership platforms. Business growth is a team discipline. Everyone in the firm has a role to play. The more prepared and the better equipped players are the higher the chances of success.

Professional services marketers today have a wide range of lead generation tools at their disposal. Industry best practice ranks thought leadership as the number one method for effective lead generation. Marketing professional services is “selling the invisible” as Harry Beckwith calls it. It is about demonstrating knowledge and differentiation, and for that knowledge-based materials are best. White papers, articles, newsletters, case studies, books and e-books, presentations – in-person and webinars, and surveys are just a few of the popular tactics employed by marketers. Properly structured and executed they can be very effective.

Growing professional services is also about building deep relationships and trust. In managing the lead generation process, it is marketers’ responsibility to tee up relationship building opportunities and put professionals in positions to demonstrate their know-how, start new conversations and earn trust. Continual education platforms such as seminars, on-line technical courses, conferences, issue-based events, community initiatives are examples of live and on-line forums, facilitating relationship building and lead nurturing. Again, it is imperative that marketers realize that the full value of these events spreads beyond building awareness and amplifying the brand to facilitating relationship creation and demonstrating subject matter expertise.

While some conventional lead generation tools such as direct outreach with call to action, telemarketing, list purchasing, contests and free trials are losing their attractiveness, social media is gaining popularity and increasingly becoming the default channel to fueling the lead pipeline. The novelty of LinkedIn, Twitter, blogs and microblogs, Slideshare, videocasts and podcasts, and infographics might evoke resistance in some firms. It is marketers’ duty to articulate their value, make the cost/benefit case to the firm stakeholders and to utilize them in a way correlated to revenue generation.

So, what’s next? Introducing and implementing new processes and tools is challenging and requires executive buy-in and support. Start small. Run experiments and learn what works and how. Build upon that to increase the number of followers. Share wins. Be patient and determined. Ultimately everybody will win – the firm and the marketers.

© 2010-2013 Copyright Mira Ilieva-Leonard / iStile All rights reserved

ON THE TACTICAL SIDE OF BUSINESS GROWTH II: Challenges facing marketers, Important data analytics for CMO'S, Relationship building insights

Here’s a short series focused on business growth implementation, a collection of my thoughts, popular opinions and current trends...

*********************************************************************************************************************************************************** "What Are The Biggest Challenges Facing Marketers According To New IBM Study?"

According to a hot-off-the-presses study conducted globally by IBM (500 marketing managers) across 15 different industries, creating growth (through the acquisition of new customers) and sustaining growth (through superior loyalty) is at the very top. 42% of respondents suggested that acquiring new customers and 36% suggested driving loyalty and satisfaction were the biggest challenges facing their organizations.

While these results aren’t earth-shattering as it is likely that a survey a decade ago would have yielded a similar pattern, what is surprising is the items at the bottom. Only 21% of the respondents suggested that measuring ROI was the most challenging problem they faced, behind branding, leveraging data, understanding and effectively using social channels, and creating positive experiences for consumers. A few years ago, measuring ROI was at the top of everybody’s list. This perhaps suggests a sign of the times – a tough marketplace, increased competition, a more global marketplace, and more savvy consumers have made growth especially challenging.

Other key findings from the survey suggest that the marketers who are driving better firm results are doing something different than their less successful counterparts. They tend to be significantly more adept at tracking, technology, and analytics and use these tools to develop more sophisticated and adaptable solutions. They are more engaged in all customer service interactions and tend to personalize marketing offers. In short, stronger firm-wide leaders are more engaged in all customer interaction, and seem to have greater competency in what is necessary to be successful today. See a summary table that compares the top performing marketer performance with the balance of marketers (from IBM 2013) below.


For details, read on here: http://www.forbes.com/sites/kimberlywhitler/2013/05/21/what-are-the-biggest-challenges-facing-marketers-according-to-new-ibm-study/

*********************************************************************************************************************************************************** "The 80/20 Rule of Analytics every CMO should know"

With all the talk about Big Data and Predictive Analytics – both of which involve complex, advanced skills and tools, driving millions of dollars in marketing – it is hard to believe in the power of simple analytics.

The truth, however, is that only 20-30% of the decisions really need the use of advanced techniques like predictive analytics. Seventy to eighty percent of marketing decisions can be judiciously addressed with simple analytics techniques, which can be learned by any marketer and executed on an Excel spreadsheet.
For the benefits of data analytics simplicity, read on here: http://www.forbes.com/sites/piyankajain/2013/05/26/the-8020-rule-of-analytics-every-cmo-should-know/

*********************************************************************************************************************************************************** "Here's How To Build A Win-Win Networking Relationship"

Here is a business-building rule of thumb: Don’t waste your time networking if you are not prepared to develop win-win relationships. Trust me when I say, I know what I’m talking about.

I am the organizer of a local business organization with a membership of over 400 self-employed women. I was shocked when I learned that most of the members attended only one or two meetings and then did not return. When I sent out a survey asking why they stopped, the majority replied that it was because they had not gotten any business.

Hadn’t gotten any business! Were they kidding me? They expected people to buy what they are offering after only a couple of visits? Hadn’t they heard that potential clients/customers need time to get to know, like and trust you? What happened to building win-win relationships?

Here’s my advice: If you aren’t networking for the long haul then don’t bother networking at all. Frankly, you are wasting your energy if you expect instant gratification. Here are five key networking tips that I share with my organization of women entrepreneurs:

1. Understand your target market.
2. Know exactly what you bring to the networking table.
3. What is your networking goal?
4. Networking rule of thumb: Give value to receive value.
5. Follow up promptly to develop and maintain win-win relationships.

For the full article, read on here: http://www.forbes.com/sites/womensmedia/2013/05/21/heres-how-to-build-a-win-win-networking-relationship/

© 2010-2013 Copyright Mira Ilieva-Leonard / iStile All rights reserved

LEADERSHIP LESSONS FROM MARGARET THATCHER

Margaret Thatcher, one of the greatest leaders of the 20th century, passed away this week. While a lot has been said and written about her policy, style and personality, not much has been highlighted as lessons to be learned by today’s leadership.

A few years back, after seeing “The Iron Lady”, a semi-biographical film, I was taken by the leadership evolution of the main character. So much so that shortly afterwards I did a good bit of research and discovered that true to the film, Margaret Thatcher had indeed dedicated time to develop her Executive Presence to become the strong leader the public came to know. Ever since, I’ve used her as a prime example of a leader exuding Personal Gravitas, when discussing its importance and development with the next generation of leaders of professional services firms (see also "Where In The World Is The Next Generation Of PSF Partners?" )

I encourage you to take a look at this 2-part interview with Sir Bernard Ingham, Margaret Thatcher's chief press secretary, and note the difference between charisma and gravitas, and the four key characteristics of personal gravitas. Which quality(ies) will you and your leadership team work on developing?





© 2010-2016 Copyright Mira Ilieva-Leonard / iStile All rights reserved

MAKING PROFESSIONAL NETWORKS WORK

Increasing the chances of success of alliance relationships

Over the past several decades, globalization and regulation have forced the creation and development of a multitude of global professional networks a/k/a alliances or associations. Their purpose is to provide a structured framework for independent local firms in different jurisdictions to come together and cost-effectively provide services to clients across borders. While the majority of these networks are found in law and accounting, they also cover industries like tax, insurance, real estate, architecture, etc. Recent research shows that these networks employ more than a million professionals and staff, and have cumulative annual revenues in excess of $200 billion. Throughout the last few years, I’ve personally worked with about a dozen networks across various industries, witnessing both best and worst practices, hence this article.

Whether it’s an extremely well structured network (like the Big 4), or one more loosely organized, for the network to function, its member firms must have shared strategic objectives that lead to strategic value creation, contributing to a feasible venture that can withstand competitive pressure and environmental change. That’s mainly manifested by the members’ ability to receive referrals from other members, the quality and reliability of firms to which they can refer, the potential to attract and of course, retain clients by being able to provide services in other states or countries, as well as the members’ capacity to exchange knowledge that can reduce risks in their own firm's operations, and access to other resources. Clients are in the heart of the member firms. The network’s purpose is to provide a platform to facilitate meeting members’ objectives by offering support like branding, market positioning, technical knowledge, etc.

As with all organizations, their success depends on shared objectives, long-term commitment and collaboration. Professional networks have to work very hard to become and remain successful. According to industry data and my professional experience, the most common challenges for networks are unbalanced relative contribution, differing short term vs. long term priorities, culture clashes, and incompatible styles and objectives of members. And what is the solution?! A reconciliation of at least two sets of the following: business systems, people, cultures and structures, plus added sensitivity to the cultural and environmental specificity of each member.

It makes sense, right? If you think of the leading, well-structured networks, they all share a common brand, business systems and perhaps people and organizational culture (although the latter might not always be the case). So why won’t more organizations adopt this model? Firms often perceive that these networks will impair their strong local brands, threaten the independence of their operations, and require unacceptable levels of data and relationship sharing. In sum, these concerns indicate a lack of trust and an unwillingness to incur additional cost.

Firms will get as much out of their network relationships as they are ready to contribute. Before joining (and during membership tenure), firms must make the cost/benefit analysis, assessing the true cost of the membership, beyond the annual dues, inclusive of the time and resources necessary to assign to the relationship. Firms must keep in mind that network memberships offer them a global development strategy at a fraction of the cost and time necessary to create such a strategy from scratch. They must clearly articulate their strategic objectives and ensure they are in line with the ones of the rest of the members. They must recognize that a network membership is a partnership and for it to work they have to get to know, like and trust their partners, at least the ones who share their strategic growth direction. They must be willing to commit and at the same time work to earn the respect of their partners. They must be prepared to compromise and be patient – networks are long-term commitments.

On the other hand, networks must demonstrate the value of its membership, and work to build and develop a collaborative environment. Many of the collaborative principles outlined in my article “ONE FOR ALL: ALL FOR ONE” are applicable here. Networks must enable relationship building and knowledge sharing. Joint training and development of professionals’ technical and advisory skills are essential. While networks must set clear expectations and contributions, they must recognize and allow for flexibility. Markets and conditions change and so will members’ circumstances. Networks must offer and maintain shared backbone business systems, and request member adoption or compatibility. This is a much less burdensome process today because so many firms are technologically savvy and more willing and able to integrate new systems. Last but not least, networks must take a segmented approach to serving its members. They must assess their capabilities, gauge their involvement interest, and engage them accordingly.

Making professional networks work is a complex process with a multi-party commitment. It can certainly be a worthwhile venture for both the network and its members as long as there are shared objectives, long-term commitment, and collaboration.

© 2010-2013 Copyright Mira Ilieva-Leonard / iStile All rights reserved

GROWING PAINS: HOW TO IDENTIFY AND ELIMINATE THEM

Focus business growth resources and attention where it counts

I often ask leaders of professional services firms “What is holding back their business growth?” Rarely do I get a clear answer. Why is it that most professional services firms do not have a grasp of their business growth process? How can they know how to solve their business growth issues, and where to focus resources and attention, if they don’t recognize the problems at hand? I often hear the excuses like “it’s the economy”, “the competitors,” and “it’s the people” but, I rarely ever hear plainly articulated points such us: “it’s converting leads into proposals,” “it is the win/loss rate”. In my experience, a leader can troubleshoot those growth pains and address them properly only when he or she has a full picture of the business growth pipeline and can clearly identify bottlenecks. Here are a few questions to help you, leaders of professional services firms, identify where you might have business growth leakage. Start by examining your business growth pipeline. Where’s the bottleneck? Lead generation, conversion, client retention rate, etc…

How are you loading your pipeline? Are you measuring the quality and quantity of your leads? If you are not, consider launching a process to help you do so. Knowing the sources of business so that you best spend your limited money and time is significant to the business growth process. Calculating ROI on marketing and BD spent is a sound, but unfortunately uncommon practice.

How often are you connecting with leads to build awareness and how? Traditional marketing dictates that in order for a message to come across it needs to reach its audience three times (3x). This conventional wisdom is challenged, as recently demonstrated by the Edelman’s Trust Study (see "Edelman Trust Barometer: Where is the Trust?”) and today, it takes a minimum of 5x for a message to resonate. It’s double the work for marketing and communication specialists. The good news is that social media is providing a cost efficient way to communicate and engage with audiences. The bad news is that social media has also created a massive clutter of data and communication apathy. Staying consistent, on point, focused on quality content and respectful is the key to cut through the information mess and connect with your audiences in a meaningful way.

What is your conversion rate? How many of your leads become actual prospects? If the number is too low, consider changing and/or increasing the marketing and BD tactics (thought leadership initiatives at this level work best for professional service firms) to better and more frequently position you in front of prospects, allowing you to demonstrate your technical capabilities, engage in dialogue and identify opportunities. What’s the velocity of your pipeline? Do you have a massive number of proposals that are not moving forward? Why are they not moving forward? Have you rushed into a proposal without fully understanding the situation: the need, the stakeholders, and the purchasing decision making process? If so, work on your advisory and problem solving skills to learn to better scope the problem, and in the process to better help the prospect and move to the next stage of the business growth process.

What is your proposal win/loss rate? What can you do to improve it? If your rate is low, question the reasons: is it pricing or is it the solution? If the latter, take a look at the pipeline velocity questions above and work on improving the problem solving skills (are we solving the right problem?) and solutions offerings (do we have the proper solution?). Professional services firms often bypass an important stage in the business growth process: education, and jump immediately from awareness to sale - this is frequently seen when a firm participates in an RFP or beauty contest. It is likely your pipeline is filled with these opportunities and therefore, whether you know it or not, you are competing mainly on pricing. This is a good place to stop and re-examine your current (and aspirational) position in the market: are you a low cost provider, or a high-end, value-adding adviser? You cannot be both successfully. There are only a select few organizations that can afford to be both and flourish in the long term. If you choose to be a low cost provider, RFP’s are a viable channel to fill your pipeline. In this case, if the win/loss rate is low then I would suggest you revisit your pricing strategies, analyze your efficiencies, and examine how your relationships are managed. You see, even with RFP’s where pricing is usually the lead selection criterion, relationships do matter. Thus, the education stage can mean relationship development.

What is the retention rate of clients? How many of your clients’ needs are you satisfying? How many of your clients are willing to try other of your service offerings and are recommending you to peers? Businesses exist because of a need or love for their services, products, etc. If you can master to win on both counts, you’ve reached the holy grail of business. Thus far, professional service providers have relied on the need of their services and have completely ignored the second, building loyalty. To sustain, if not even grow business, that approach is no longer an option. A couple of months ago I referred to the latest Financial Times survey on Efficient Client Adviser relationships and the importance of the clients’ recommendations it highlights: commercial awareness, added value services, contribution of management and people support. All of these call attention to building trust and loyalty between clients and their professional service providers. If you are having troubles expanding your client relationships or your client retention rate is deteriorating, take a closer look at those points, and better yet, talk to your clients.

Now that you have a few key questions to help you identify the bottlenecks in your business growth process, I urge you to assess your business growth tactics. Hopefully (and most importantly), your firm has a system in place to address the answers to those questions. Look for more on that and how to best leverage your assets in the next segment of this blog.

© 2010-2013 Copyright Mira Ilieva Leonard / iStile All rights reserved

EDELMAN TRUST BAROMETER: WHERE IS THE TRUST

How to go about building and sustaining it?

For over a decade Edelman, one of the largest and independent public relations firms, has been researching and publishing an annual study of the state of global consumer trust. The results have customarily been revealed during an event, called “Edelman’s Trust Breakfast.” Four years ago, while witnessing one of the most disastrous global financial crises, I had the opportunity to attend the event and hear the discoveries of the study first hand. Now, at the dawn of a very public act of distrust - the confession of one of the most celebrated athletes of our time, Lance Armstrong - I am glad to review the recently published study, titled “Crisis of Leadership,” compare it to the study from four years back, and report a few positive trends.

GENERAL FINDINGS
2009: US consumers have generally lost trust in the business sector and especially when it comes to certain industries like banking and automotive. Biotech and technology are the least affected areas due to the idea of innovation and hope that consumers attribute to both of these fields. What that meant to professional services firms (“PSFs”): biotech and technology will most probably experience the highest growth in the upcoming years and we should position our practices / industry groups for that.

2013: Trust free-fall has finally come to a halt; more than that, it is stabilizing and even improving for some countries (Germany, France, UK, France, etc.) While trust is on a rise for institutions – after dips in 2009 and 2012 – the gap in trust between businesses and governments is still significant, with NGO’s and businesses leading the way. Technology remains the most trusted industry sector. While the Automotive industry has been able to regain consumers’ trust since 2009, understandably the Banking and Finance sectors are yet again at the low end of consumer trust barometer. What that means to PSFs: True to my 2009 forecast, organizations should continue to invest in their Technology-focused strategies. Even with the low trust ratings, firms with strong Banking and Finance capabilities should stay close to their Finance clients, many of whom will need help rebuilding their images.

SIZE & LOCATION MATTER
2009: While consumers have lost trust in corporate America, they will be most willing to trust small size and entrepreneurial organizations, because they can get to know the leaders, especially those who are hands-on with the organizations and have direct control over them, and they are overall more transparent. What that meant to PSFs: look for opportunities with emerging small and entrepreneurial organizations.

2013: Small businesses are still trusted more in the West while the big businesses have the upper hand in the emerging markets. Businesses headquartered in the Southern European States and the BRICS are lagging in acquiring consumer trust in comparison to the ones based out the developed countries such as Germany, Sweden, Switzerland, UK, US, and others. What that means to PSFs: Consider how this affects your and clients global development strategy and make the necessary adjustments. Continue to look for opportunities with small and mid-cap clients in the developed economies and align yourself with the leading brands in the emerging ones. Keep in mind that the geographic location where you and your clients conduct business has become even more important.

WHAT INFORMATION SOURCES WOULD CONSUMERS TRUST?
2009: Surprisingly, internet-based information doesn’t appear to be considered as a reliable source as one might believe, even with the younger generation. Market analysts and business articles seem to be some of the most credible sources, though friends and employees follow very closely. What that meant to PSFs: Company websites providing their own information and statements are no longer enough. Include client testimonials and quotes from current and alumni employees in your materials. Give your advocates venues like websites, public events and annual reports to underwrite you.

2013: Trust in media has gone up since 2009, “as a result of diversification of options and strong coverage of scandals.” The older generation (aka decision makers) prefers traditional media in the developed markets; in the emerging ones, trust is evenly spread out across the communication spectrum – from traditional to social media. While trust in CEO’s has increased, consumers continue to consider academics, technical experts and people like themselves as the most credible sources. What that means to PSFs: These are important findings for marketing and communication experts. They should keep them in mind when selecting media delivery channels and spokespeople.

HOW LONG DOES IT TAKE TO MAKE A MESSAGE VISIBLE AND BELIEVABLE?
2009: The marketing communication norm that it takes 3x to communicate a message for it to register is no longer valid. Given the current consumer cynicism it appears it takes closer to 5x for a message to make an impact and to become believable. What that meant to PSFs: increase the frequency and consistency of your messaging. Keep in mind your statements will be questioned, so be clear, precise and consistent.

2013: Consumer skepticism carries on; majority of consumers still need to hear a message between 3-5 times to find it believable. What that means to PSFs: My 2009 prescription is still valid. Pump up the volume. Keep your messaging simple, short and to the point, articulating the value to your clients opposed to solely boasting accomplishments.

HOW DO WE BUILD AND SUSTAIN TRUST AND RELATIONSHIPS?
2009: Trust is fragile and hard to come by today. Reframe your thinking and hone in on the following trust building elements:

Diplomacy - demonstrate your corporate responsibility; take a stand on global issues like regulatory ones; get your leaders out in the community and make sure they are actively involved and offering solutions.

Social responsibility - clients and their customers will be looking for what your organization stands for and how you go about demonstrating that. If being “green” is important to your organization make sure your clients know about it, not only by telling them but also by showing them.

Shared sacrifices – “walk the talk;” communicate to your clients and prospects what your organization is doing to share their burden (i.e. instead of spending on a large client Holiday party make a donation on their behalf, etc.)

Continuous conversation – open two way communication lines with your clients via blogs, intranets, client interviews, etc. More than ever clients would like to share with you their experience, both good and bad, and in order to keep their trust you should be willing to listen and take notes.

The bottom line: service and leadership as well as authenticity and transparency will matter the most in sustaining and building relationships.

2013: The need for organizations to go above and beyond operations to build trust is clear. While this year Edelman has expanded and segmented the trust building attributes into five main components: engagement, integrity, product & services, purpose and operations, my 2009 recommendations listed above remain important and valid. Engage your clients and employees and increase the two way communication. Be transparent and take responsibility for actions. Consistently deliver quality services and exceed clients’ expectations. Shift behavior from “license to operate to license to lead” and embrace a model of inclusive management.

For copies of Edelman’s Trust reports, visit the following website:
http://www.edelman.com/trust-downloads/global-results-2/
http://www.edelman.com/trust/2009/

Portions adapted from the Series "Oldies but Goodies": The Lost Trust (first version published Wednesday March 4, 2009 by Mira Ilieva Leonard, Partner, Creative Growth Group)

© 2010-2013 Copyright Mira Ilieva Leonard / iStile All rights reserved