In working with professional services firms, and especially the rapidly growing ones, there are some similarities that run through them all. All the organisations that engage in detailed business research at least once a year on their target client group grew faster and were ultimately more profitable. However on the other hand, those that did more frequent business research (at least quarterly), grew even faster than the latter group and were also more profitable in comparison.
So let’s think about that for a minute. Doesn’t the thought of possible exponential growth and huge profits sound incredibly appealing?
Let’s start at the very beginning. There are so many types of research that your professional services company can use, even though you can pick and choose when and how to do this research. I recommend that whatever you decide be based on your unique circumstance; it must be the best option to provide the required results as well as perfectly timed and executed to avoid false or inconclusive results. Some of them are:
Client satisfaction research
Lost prospect analysis
Now that you know the types of research, let’s move forward quickly, shall we? We looked across the research we have done on behalf of our clients to isolate the most insightful and impactful areas of inquiry. The below listed top 8 research questions are the result of some of the most discerning, cogent and impactful areas of enquiry that are able to drive business growth and profitability:
1. Why do your best clients choose you?
There is an absolute difference between your best clients and your ideal clients. One of my most popular mantras for business is ‘only happy customers refer others’. Really understanding what your best clients find appealing about you can help you not only serve them better thereby possibly extending deal size and customer lifetime value but it also enables you to find others just like them and convert them into your next new client.
Yes, you know your services and what they are intended to do for clients. But what do they actually do, according to your clients? More often than not, our professional services clients are surprised to learn the true benefit of their service to their customers. For example, you might have gotten a deal based on your good reputation, but after working with you, your client might value your team’s collective skills and expertise the most.
When you fully appreciate the true value and benefit of your services, you are in a better position to enhance or even develop new services with other true benefits. This information also comes in useful when you are designing loyalty and referral programs.
2. What exactly are your best clients trying to avoid?
This could be the exact opposite of the first question but it provides a valuable perspective. You need this information to avoid being ruled out too early during a prospective consideration or not being considered at all, which is probably worse! The responses here are also important in helping to shape your business model and strategy.
From experience working with service providers and their clients, we have discovered that the main circumstances that your clients want to avoid in a service provider are not getting the job done, not solving the problem in the long run and billing surprises including overpaying. Never assume or misjudge your potential clients’ priorities, listen to understand and not to impress so you know how your prospects think in order to convert them into clients.
Some follow up questions to provide better clarity on this are ‘How do they perceive their challenges?’, How do they describe and talk about their issues? A very good example is when clients are fixed on cost reduction to increase profitability but in actual fact, an improvement of their processes and customer experience is a more sustainable way of addressing the cost issue. Imagine if you are not able to connect the dots for them and communicate your offering, you would most likely miss the business opportunity.
3. Who are your real competitors?
A lot of professional service businesses think they are very good at identifying their true competitors, but would you believe me if I told you that when you ask a firm to list their competitors are and then ask their clients to do the same, there are not a lot of overlaps? So what does that tell you?
It’s usually because you know too much about your industry and rule out competitors too easily, and you are also viewing a client’s problems through your ‘not very objective’ lens and therefore completely overlook different categories of solutions that they are considering. Ever since an interior design company client of ours with over 2 decades of experience lost a massive hotel deal to a young lady and her team of 3 with less than 5 years of experience, we begun to take even more special care with not just looking into our clients’ competitors but their substitutes as well. For example, a company facing a rapidly drying up leads pipeline could easily consider sales training, reduction in pricing or a new PR campaign. Therefore, If you consult on new product development, business development or digital marketing – the other possible solutions are all competitors. In any case, ignorance of true competitors rarely helps you compete.
4. What are the emerging trends?
In speaking about trends, it is not just about the industry but also about the market and your target clients. Where is the market headed? Will it grow or contract? What services might be needed in the future? In the new normal following the pandemic, many of your prospects and clients are struggling to protect their cash flow right now or probably slowing or stopping their payments to protect their own businesses. Clients are asking to see more—and faster—value before they release those payments to you.
Understanding emerging trends can help you better target and conserve limited marketing spend. I am still always amazed at how several businesses have added entire service lines, including new hires and big marketing budgets, based on little more than hunches and flawed observations. Big decisions must be driven by research and data. Regular research is normal in large market-driven industries, but it is surprisingly rare among professional services firms.
5. How strong is your brand?
What is your company known for? How visible are you in the marketplace? How strong is your reputation? You must know where you stand to not only guide your overall strategy, but to have a huge impact on your marketing budget and how it is expended across various programs. Please be humble about this and be willing to truly listen and do something about whatever the findings might be. When you understand your brand’s strengths and weaknesses, it would help you understand why you might be getting traction in one segment over the other.
6. What is the best way to market to your ideal target clients?
Wouldn’t it be gratifying to know where your target clients go to get recommendations and referrals? Is it too much work to accurately identify how they want to be reached? Systematic business research is critical to be able to answer these questions. The answers will greatly reduce the level of spending as well as expensive trials needed to reach your best clients. This is perhaps one of the key reasons that firms that do regular research are more profitable. They are not spraying and praying, hoping that something that works will stick.
7. How should you price your services?
As a professional service firm, you must stop overestimating the role price plays in buying decisions. It is the easiest reason for a customer to share when providing feedback, which is why most businesses are dealt the price card as the reason why they did not win a deal.
However, should an impartial third party be engaged to dig deeper into why it loses competitive business, the company often learns that what appeared to be a price issue may really be perceived sub-optimal level of expertise, lack of attention to detail or an impression of non-responsiveness and lack of commitment.
8. How do your current clients really feel about you?
What would your best clients change about your firm if they could? How long are they likely to remain a client? How likely are clients to refer you to others? These are the kinds of questions that can help you audit and optimize your processes as well as get a more accurate feel for what the future holds. Sometimes clients unravel previously hidden strengths that were never considered, or reveal important weaknesses that need attention.
It is important to note though that clients are rarely eager to tell you the truth..at least not directly. It might be best to hire a research firm but another option is to build it into your processes especially across marketing and business development functions. You can begin to adopt and follow the research but once a year at the least, hire an outsider to get this done.
Understanding the key questions discussed above can have a positive impact on your firm’s growth and profitability. There really is tremendous power in well-designed and professionally executed business research.
About Bella Ikeme
Bella Ikeme is a multipreneur, business growth and profitability enabler, a partner and catalyst for African businesses and entrepreneurs. She is the Founder & CEO of Caizen Business Development Company that provides marketing, communications and content solutions for professional services and other service businesses. It is her unwavering belief that Africans have the ability to build successful legacy businesses that not only impact lives, but the socio-economic development of the continent. When she is not working, she is spending time with family and friends, reading, journaling or obsessively studying the Japanese.