Most professional services firms, and many other companies where services are a significant component, are troubled by customers who do not perceive or understand the true value of what they are providing. They have difficulty getting customers to pay for upfront diagnostic/assessment work, concept modeling, prototype development, and so on. In some cases, professional services firms have difficulty sustaining the customers awareness and proper valuation of the work done during an engagement. This is a problem in financial services, for example, where planning and execution services seem invisible, or entirely obvious, and thus not valued by the customer. After all, I can do stock trades myself on the Internet. Where is the value-add from paying a financial services firm a management fee to do that?
Here is a conceptual model for improving how customers value services.
There are three basic phases in a service event or client engagement:
- Pre-service awareness – establishing expectations
- Service engagement – making the process visible
- Post-service follow up – the ongoing engagement
Lets walk through each of these phases and explore opportunities to increase customer perception of our value to them.
Typically we think of marketing as a tool to attract customers to our services. Filling the sales funnel with leads is what marketing is all about. If you think this way about marketing, you are missing an opportunity to radically improve your success rate.
Inevitably, the initial contact with potential clients establishes in their minds expectations about who you are, what you do, and how they might interact with you. There is no escaping this fact. First impressions do count. You had better manage them.
A first step in managing customer expectations is for you to understand your value to customers and plan to develop the set of expectations you want to set based on that value. If you do not have a clear and convincing value statement your prospects will fill in the blank with whatever assumptions are already in their heads. Why should a client engage you instead of someone else? Once you have this figured out, your marketing needs to establish these expectations when you make the initial contact with a potential client. If you introduce your company simply as “wealth management firm”, “web design”, “financial planning”, “estate and wills”, or, the one closest to my heart, “management consultant”, you are immediately allowing the prospect to imagine what you do and who you are. As soon as you utter that first phrase they put you in a mental box. This is true whether the message comes verbally or visually.
Lets look at an example, to shake up our thinking a bit. What do you think of when you hear the words, “I am a general contractor”? For some of us, this will be an image of a guy with a tool belt, hammer dangling off, with whom you have had unpleasant conversations about why a remodeling project is late and over budget. Think of what iamge comes into your mind when you hear the words, “general contractor”?
Here is what a general contractor really does (thanks to Rob Ferree at the Ferree Group in Boston, MA((1)) for this):
- Accountable for project results
- Overall client satisfaction
- The more complex the project, the more value a GC should deliver
- Healthy and productive relationship with client (and other constituents)
- Communicate, communicate, communicate
- Manage expectations
- Wear the client’s hat / work in the client’s interest
- Be discerning with client’s budget
- Problem solve the inevitable glitches
- Organize the project and manage the work flow
- • Team building (and bench building)
- • Planning and scheduling
- Client meetings
- Invoices and disbursements
- Constantly strive to deliver time efficiencies – Deliver upon commitments
- Plan for zero punch list
- Trade experience and understanding of dependencies
- Financial and accounting skills
- Attention to detail
- Completion orientation
- Strive for the “Wow Factor”
How would you set client expectations for a general contractor?
The benefits I expect from a general contractor include: WOW (Wow, this remodeled kitchen looks super!), on time, no surprises, within budget, and the comfort that someone is looking out for my interests. I think a great way for a general contractor to introduce themselves is: “I create WOW for homeowners.”
So, to repeat the rhetorical question: “How can you set client expectations from the very first meeting?” I am not going to explore how you set client expectations from the very first meeting here. Determining your value in customers’ eyes and coming to a useful marketing strategy is outside the scope of this discussion. You might take a look at Stephen Melanson’s Jaw Branding for a challenging approach to the branding portion of this task.
As an aside, when formal proposals and contracts are used, they should carefully reflect the expectations that you have so carefully worked to establish.
Use Processes to Engage and Transmit Your Value To Customers
So, now you have set your customer’s initial perceptions of who you are and how you create value for them. For example, if you are a business lawyer, they understand that you will help them prevent future problems by putting the right legal structures in place now. They don’t think of you as the guy who turns on the clock each time the phone rings.
How do you make your value visible during your engagement with them?
Before getting to visible professional services, we need to reemphasize that value is entirely determined by the customer. This means, reflecting back to our general contractor example, they are not thinking about all of those tasks Rob Ferree outlined. Customers think about the benefits delivered, not how the benefits are produced, nor the features of a service. Customers perceive and buy benefits. So, as we go through this upcoming discussion of processes, think about how you can demonstrate the end benefits to the customer, not every task and technique you use.
A useful approach is to develop a clear process that encompasses your value creating work. A process is all of the steps required to create the service value. We won’t spend time here describing all of the details of how to develop a process description. But, keep in mind that a component of your process description must be describing how you work with clients and how this reinforces the expectations you set in the marketing phase of your relationship. Consistency and honesty are a must. People are very sensitive to anything that even hints at deception. Do what you say you do.
A simple block flow chart is the single most useful way of presenting your process to your clients. Keep it simple and high level. This is not a cook book nor should it look like a checklist or template((2)). Emphasize the steps where you help your clients to create a new vision of the solution to their problems. Then you can move on to the steps where you add specialized information and analytical tools that bring the solution to life. Don’t forget the final steps in which you help the client to convert the work into actionable tasks. For instance, an estate planning attorney can make part of their processes steps that put the state planning into action, like funding the trusts, assigning trustees, and establishing anniversary dates for planning reviews.
A General Rule of Professional Services Production
In general, in professional services, the more you engage the client in the production of the service the higher the level of satisfaction and engagement by the client with the end result.
Follow Up – The Ongoing Relationship
In professional services the service event or engagement should never be thought of as just a one-shot activity. A professional service is best thought of as an ongoing series of services, ideally a working relationship with a long life. One way to accomplish this is to build follow up into your business process. In this age of the Web, it is extremely easy to communicate new, useful information to your clients. However, too many newsletters and emails contain old information or worse information that is readily available elsewhere. Regurgitating the Wall St. Journal is not a good approach. If you are in a niche, exploit it. On another hand, make some part of your newsletters actionable and clearly connected to your core business values for clients.
In many cases you have legitimate, if not compelling, reason to contact the client again to assess results and make course corrections. By making this a visible part of your service process your clients will understand why, how, and when this will occur. Even if your service is like that of a general contractor where you might imagine the service to end when the owner takes occupancy, there are still opportunities to contact them in the future. Just be aware that if you contact them it must be genuine. If there are problems with the service, you had better be ready to tackle them.
You can get your profesional services’ clients to have a stronger perception of your value to them by:
- Manage their expectations of what you will do and they play a role through good fundamental marketing. Think through your fundamental value proposition and make sure that is on display the first time you met a prospect and at every step through your services to them.
- Make value creating processes visible to the client. Engage your clients as much as possible in the value creation process. The higher their engagement the higher their valuation of it merits and the more likely they will follow through.
- Follow up after a service engagement. Many professional services lend themselves to long life cycle management.
- Rob can be reached at email@example.com [↩]
- Lisa Morrisey at Lido Consulting Group pointed out to me how important it is that clients not think that simple cookie cutter templates can solve significant business problems. There certainly are areas of business in which templates are very useful and appropriate, for example small company employee procedures and rules. However, fundamental value-creating business processes are far more complex and interwoven. [↩]