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.

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