Information

You want to find information, it’s all there.  More information is available for free today than ever before in history.  Whatever you’re interested in, you can Google any questions you have and you’ll be able to access a whole range of information that is specific to your topic.

So are we any better off because all this information is available?  Maybe not.

If I want to find information on setting up a company, I can find it on the web, for free.  The information is available.  But I have to find it, read it and understand it.  That’s where the next bit comes in – knowledge.

Knowledge

Knowledge is understanding information.  Knowledge is taking the information contained in multiple sources and putting it together so it makes some kind of sense.

A lot of MBA students have knowledge.  Say they’re taking a marketing subject.  They can learn all about positioning, the four P’s, value propositions, distribution channels etc.  They can obtain information from different sources and convert it into knowledge. 

But knowing about something and actually being able to do something are two different things.

And that’s where expertise comes in.

Expertise

Expertise is being able to take the knowledge and learnings from past experiences and being able to apply it to a particular situation.  You can’t buy expertise – you earn it through years of doing.  Gladwell talks about needing 10,000 of practice before you become proficient at a skill – that’s expertise.  You can have all the knowledge and information, but actually using it and learning from it is how you gain expertise.

• Expertise comes from making mistakes – and learning from them.
• Expertise comes from having huge successes – and understanding what made them successful.
• Expertise comes from learning from other experts and watching them operate.
• Expertise comes from applying your knowledge and information and watching the outcomes.

What Do You Sell

This blog is aimed at people who sell professional services. 

In professional services, if all you sell is information, you’ll quickly become redundant.  Because if it’s not already available for free, it soon will be.  A great example is mutual fund ratings.  For years financial planners had exclusive access to mutual fund ratings – if you wanted a five star fund you needed to see a financial planner to find out who the good fund managers are.  That information is now available for free.

If all you sell is knowledge, it’s not enough.  Many potential clients think they’re able to do it themselves because they can access the information and convert it into knowledge.  But knowledge without experience is dangerous.  It’s the investor who knows who the five star funds are and invests blindly into those funds without stopping to think about whether the performance is likely to continue.  It’s the difference between reading about how to fly a plane and having actual experience in the air flying.

If you’re selling knowledge and you’ve been around for a while, you can sell expertise instead.  Expertise is hard to quantify, but clients value it.  Your job is to make the benefits of your expertise tangible to your clients.

Legal services is a good example.  Say you need to write a Will.  Of course you can obtain the information and knowledge to write one.  You can even buy a DIY Will kit and complete it yourself.

But you lack expertise.  The lawyer doesn’t.

It costs a bit more to get a lawyer to draw up your Will, but you gain peace of mind.  If you did it yourself, you wouldn’t know about any problems until it was too late (then your Estate would find out about those problems).  You may forget about the tax implications of selling assets, you may mention assets in your Will that won’t actually form part of your estate – there are a range of things that can go wrong in even the most simplest of estates. 

So if I was a lawyer, I’d be promoting my expertise to potential clients.  I’d be highlighting potential problems and then explain how my advice could prevent them.  I’d be selling the benefits of my experience – this is my job, it’s what I do for a living.  Sure you can try and do it yourself to save some money now, but it may turn out to be more costly in the long term.

So what do you sell?  Information, knowledge or expertise?

Which ones do you think are worth more?

How do you differentiate between the three when you’re speaking with clients?

How can you make your experience more tangible to your clients?

Let me know what you think and leave a comment.

The Ansoff Matrix is a tool a business can use to help come up with innovative ways to grow.  It’s divided into four quadrants and looks at the options of selling new or existing products to new or existing markets.  Have a read of my original article to get an understanding of it.

I was recently working with a local financial planning business and we used the Ansoff matrix to come up with some ideas they could use to grow their business.  In today’s article I’ll share some of those ideas.

Market Penetration

This particular business had focused on people aged 50 – 65.  The products it sold ranged from managed funds (mutual funds) to retirement savings products to insurance.  When we examined the client base we determined that many of the clients were unaware of the range of products the business provided.  Some clients only had one product when they were prime candidates to have more.  A huge opportunity existed for that business to meet with existing clients and see if any of the additional products were appropriate for them. 

You can see from this that the market penetration strategy could be the least risky for this business.  It involves meeting with existing clients who they already have a strong relationship with and suggesting things that could also help them.

Market Development

We then looked at the option of finding new markets for their existing range of products.  This may be appropriate for some businesses.  This business had two options – new markets could mean opening an additional office in another city – they decided against this option because it didn’t fit their vision.  They did decide however to begin to offer their services to a younger age group – the 30 - 50 demographic.  Many of their existing clients have children in this category so the business thought it would be a relatively simple process to begin offering advice to the children of their clients.  This also fits well with their vision of helping clients generate inter-generational wealth for their families.

Product Development

This was perhaps the most challenging area we discussed.  Whilst the business understood that there was still a lot of potential to sell more of it’s existing product range, it also acknowledged that there could be opportunities to introduce additional products.  The firm is now in the process of surveying its clients to find out what they want. 

A couple of options we’ve already discussed include introducing a new fee-based review service that provides a range of additional benefits to the client.  We’ve also discussed providing lending services to help clients with home loans etc.

Diversification

Considered the most risky of the four strategies, diversification involves selling new products to new markets.  The firms acknowledges that if it introduces new services in the product development quadrant, it has an opportunity to market and promote those services to people who would not normally have considered their firm.

For example, someone wanting a home loan could approach them for advice, and in the process they’d also be able to offer some of their traditional financial planning products to that person (market development).

How does it help you?

The Ansoff Matrix has enormous potential to help you grow your business.  You may not run a financial planning business – it doesn’t matter.  The point of this article is not to give you ideas to grow a financial planning business but to make you stop and think about the product or service you sell.

• Are their ways to sell more to your existing clients?
• What new markets can you aim at?
• Are there new products you can invent that you can offer to your clients and prospects?

Take time today to think about these questions.  Let me know some of the ideas you come up with.

They both differed on the details, but here’s the main points they raised:

• Both aimed for at least 12 touches a year.
• The touches had to be meaningful.  Producing blog articles are too generic and don’t count.
• They had a schedule so all clients in a particular segment received a similar level of attention – they didn’t just focus on their ‘favourite’ clients.
• Some of the touches involved phone calls.  These could be a ‘how are you going’ call which was just a chat with no hidden agenda.  Other phone calls were more targeted – ‘I’m ringing to talk about ….’.  These calls were relevant and tailored to the needs of the client.  The phone calls were sometimes made by the planner, other times different staff members made the calls.  This helps to stop the client only wanting to deal with one person.
• Other touches included newsletters, invitations to seminars and workshops and targetted mailouts aimed at the specific segment or demographic. 
• One firm sends out copies of relevant newspaper articles – either finance-related articles that are suitable for the client or articles about something they’re interested in.
• They both sent out birthday cards.  Planners I’ve spoken with have mixed views on this, but these speakers said their clients loved receiving them. 

I came away from hearing these speakers and I felt challenged about how I could do this in my financial planning business.  I care about my clients and want to make sure we have plenty of contact with them, but I don’t want it to appear insincere.  We’re working on building a contact schedule that takes some of the ideas above plus some of our own to ensure we touch our clients in a meaningful way.  We don’t want to seem too overbearing, but we don’t want our clients to feel neglected.

How many touches do you think are necessary?  Are there examples of you’ve seen where a business has kept in touch in a regular manner without it appearing to be over-the-top?

One of the big challenges in selling professional services relates to how you let your clients know about the range of products and services you provide.  I’ll give you an example from the financial planning industry.

Some friends of ours were talking about making some investments and asked me for a recommendation.   They told me they already had a financial adviser who looked after their retirement plan, but they needed someone who could speak with them about other investments.  I actually knew the planner who looked after their retirement plan, and I knew he could help them with their additional investment needs.  But they didn’t think to ask him.  Why?

Could it be that they didn’t realise he provided a wider range of services than the ones he’d provided to them?

When they initially saw him they had one need which he was able to help with.  Unfortunately he’d never taken the time to let them know about the range of other services he could provide – things such as lending advice, investments and insurance.  To my friends, he was just the guy who looked after their retirement plan.

I was reminded of this story this week when I was doing some business planning.  I love asking business owners two questions:

1. What range of services and products do you provide, and
2. What range of services and products do your clients think you provide?

There’s generally a large gap in the answers.  In most professional service businesses your clients don’t understand the range of services you provide.  And the problem with that is that if they have a need for a service they don’t currently buy from you, they may go elsewhere to get it, even if you could sell it to them.

So how can you let them know about all the things you can do?  Here’s some ideas.

• Brochure, printed material and web site that describe the full range of services you provide.
• Regular reviews with clients.  These help to uncover additional needs and issues that you didn’t know about.
• Letting them know about additional products that may be suitable.  No-one likes the feeling of having something pushed on them, but most people are open to a professional talking to them about products or services that have helped people in similar situations.
• Survey your clients to find out about what additional services they’d like.  Then tell them how you can provide those services.
• If you can’t do it in-house, but it’s a good fit with your business, then consider outsourcing or developing a referral alliance with someone.  In the financial planning industry, many planners have referral relationships with accountants and lawyers so they can provide introductions to these professionals.
• Consider packaging some of your services.

Have a think about all the things you do for clients.  And then work out which services you can promote to your clients.  Take another look at the Ansoff Matrix article I wrote a few months ago to get some additional ideas about growing your business.  And then get to work letting your clients know about all the things you can do for them.

Please leave a comment and let me know about ways you can do this.