Some of the best opportunities for a company to improve its value lie hidden in plain view.
Again and again in our strategy work for professional services firms we encounter a common set of problems that weaken profits and rob firms of their competitive advantage. But these problems, if solved, can become powerful opportunities. Fixing these problems can create strategic advantage and improve a firm’s long-term performance and value.
Too often these problems go unrecognized and unaddressed. In fact, operational managers often argue these issues are unimportant or are being addressed. Don’t fall into this trap.
In our experience, seven hidden opportunities surface with particular frequency. Address them and your firm will gain a tangible advantage as you compete for new business and the best employees.
Hidden Opportunity 1: Clients don’t know all that you can do to help them.
Companies hire professional service firms to solve specific problems. But once a firm like yours wins a job, you can get pigeonholed. Chances are, your clients aren’t aware of your full range of capabilities. So next time they are looking for services — even those you offer — there’s a good chance they will look elsewhere, even if they were fully satisfied with your performance.
For example, a well-respected and rapidly growing accounting firm commissioned interviews with their best clients. They found that over 60% of their clients felt that they didn’t know all the services the company offered. They were right. When the accounting firm asked its clients to list services they wished the company would offer, they were stunned — they provided almost all of those services already!
How to capitalize: It’s not your clients’ job to figure out how to use your services. You have to be proactive… and your clients want you to be. One buyer we talked to said it best: “We’re focused on the immediate. We want our vendors to anticipate our needs and help solve problems before they become major issues. We don’t want a sales pitch. Just educate us and offer solutions.”
Just don’t expect your project managers to take on the business development role — they are focused on project performance. Be prepared to dedicate other resources to client development. It’s no secret that many key decisions are often made well before the RFP even goes out. Take the initiative and put your firm in the driver’s seat.
Hidden Opportunity 2: You are confusing your potential customers.
Many contracting firms paint a confusing picture of their capabilities. When they talk about themselves, their descriptions can be intentionally vague and laced with jargon. In their minds, the more general their language, the less likely they are to be perceived as limited. Potential customers, however, are left with little understanding of a firm’s capabilities or experience. They have no compelling reason to hire the firm.
Here’s an example pulled from a real-world website. Can you tell what they do? Or how are they better than similar firms?
“[Company X] is the innovative professional services firm known for effectively applying strong business and technological expertise as well as process and architectural rigor to promising digital technologies, to solve challenging business problems and enable sustainable advantage.”
How to capitalize: Clarity is golden. If your message is specific and sharply defined, you are far more likely to attract clients that appreciate the things you do best. The more you pare down and focus your message, the more your competitive advantage will shine through. Easy to do? Not at all. But an unfocused and confusing message will cost you business. When you try to be everything to everyone you are nothing to anyone.
Hidden Opportunity 3: Clients tell you what they need. But you aren’t hearing what they want.
Needs and wants can be very different things. You see, clients are often motivated by fears and emotions. If you aren’t sensitive to those motivating factors, you could have trouble delivering a satisfying outcome.
For example, a large US bank recently needed to upgrade its network infrastructure to better respond to persistent hacking threats. An IT consultancy with plenty of relevant experience and technical expertise was rejected soon after a conversation with the agency. Why? The bank had been burned recently on another IT project and they were looking for reassurance that this project wouldn’t attract any further negative attention. The IT firm didn’t get it. They were so focused on the bank’s technical requirements that they completely overlooked the emotional needs.
How to capitalize: Companies hire you to get a specific job done. They expect you to address their technical requirements — that’s a given. But if you can identify and address a client’s emotionally driven agenda then your firm will have a distinct advantage when the award is made.
Hidden Opportunity 4: Some of your most loyal clients don’t want to work with you.
Don’t confuse longevity with enthusiasm. In fact, some long-term clients are locked into unsatisfying relationships with their service providers. They are unhappy with you and you may not even know it. Contractual obligations, inertia, or the hassle of finding a new vendor keeps these clients around. These relationships often require a lot of maintenance and reap low profits and damaging buzz.
How to capitalize: Interview your clients, but get an outsider to ask the questions. You’ll be amazed what unhappy clients will reveal to a third party that they would never tell you. They may fear making the situation even worse, or they simply may dislike confrontation. Once you understand the issues, you can choose to fix them or find a low-pain way to end the relationship. The alternative — simply riding out the contract — can create a lot of red ink and bad blood.
Hidden Opportunity 5: You don’t know what your best people want.
Your top people, those you “wish you could clone,” often have very specific motivations and values. But management rarely understands these individual motivating factors.
For example, many marginal but vocal employees may be focused on money alone. It’s easy, then, to conclude that all employees are similarly motivated. Bad mistake. Often your top performers have very different goals, priorities, and wants.
How to capitalize: You must, of course, cover employees’ basic needs, such as competitive salaries, good benefits, and a pleasant work environment. But if you understand the intangibles that motivate your best people you can promote the values and benefits that attract the right talent for your firm. Have a neutral, third party interview your best people and find out what keeps them around or why they are considering a change. Expect surprises. Using these insights, refocus your recruiting to attract more personnel gems. In short order, you’ll start winning the talent war.
Hidden Opportunity 6: You aren’t leveraging your experts.
Professional services firms are collections of experts. Yet at most firms those experts remain in relative obscurity. If this sounds familiar, you may be sitting on a vast, untapped oil field. Your experts’ knowledge is a business development natural resource that can fuel a significant increase in visibility and growth for your firm. But many experts have no idea how to convert their wealth of knowledge into a wealthier, fast-growing firm.
How to capitalize: Introduce a new initiative at your firm to turn selected individuals into what we call “Visible Experts®”. Encourage your brightest stars to step onto a larger stage — sharing their knowledge freely contributing to your blog, speaking at events, writing books, and more. The benefits? According to our research, Visible Experts command higher fees and drive more business to their firms. And if some cases, they can even raise their firm into the elite ranks.
Hidden Opportunity 7: Your brand is keeping you from getting more referrals
In the past, referrals have revolved around two things: 1) the people you know and 2) the companies you’ve worked with. Today, it’s more complicated than that. While those are still critical sources of referrals, many recommendations come from people you’ve never even met.
How does that happen? People learn about — and begin trusting — a professional services firm online, often by consuming the free expert content on its website. If your brand is visible in the marketplace, these readers can become a powerful source of referrals.
How to capitalize: Make sure your brand is projecting an image that is highly credible and trustworthy. Consider questions such as these:
- Is your messaging clear and focused?
- Do the images and colors on your website and marketing materials differentiate your firm from your competitors?
- Is your look sophisticated and modern?
And make sure you are visible online, where people are not only finding new firms but vetting them, too. If you aren’t publishing valuable information on your website and making it easy to find on Google, you are missing a huge opportunity.
Building Corporate Value
Some of the best opportunities to improve your business are right under you nose. You may not even be aware of them — or may think that you’ve already got them covered.
Don’t be overconfident. In our research we see these issues all the time, usually to the surprise of top management. The most successful companies distinguish themselves from their “also-ran” peers by looking for and seizing these hidden opportunities. They understand they are an opportunity for a company to build a sustainable competitive advantage and a premium valuation.
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