We need to have some electrical work done around our house and my wife related a conversation she had with the electrician. 

When he was last out to do some work, he noticed that we have a light switch inside our bathroom, right next to the bathtub.  He mentioned that this was actually illegal as light switches should be on the outside of the door that leads to the room with the bath.  He said that we should look to get it moved and that if we ever wanted him to do work in the bathroom, he’d be obliged to move the switch.

Well, we need to have some work done and he reminded us of the need to move the switch.

It’s interesting what he’s done here – he’s created more work (and income) for himself without us getting resentful about it.  The switch needs to be moved – there’s a very good reason (safety) for the move.  We trust him based on the previous jobs he’s done for us – he always turns up on time, does what he promises, doesn’t leave a mess etc.  Over the years we’ve built up a good relationship with him and trust him.  When we need to get electrical work done we don’t get any other quotes – we just call him.

How can you become like our electrician – trusted and indespensible?

How do you build trust with your clients and demonstrate your capabililties? 

I’m always challenged when I see the need to suggest something extra to a client – a bit like the need to move the switch.  I sometimes feel worried they won’t see the need for it but when you think about this example, if they trust you, they won’t doubt that you’ve got their best interests in mind.

Finally, how do you become indespensible to your clients?  How can you get to the point that they no longer consider using your competitors?

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.

photo credit: SideLong

 Jamie Harrop had a post a few days ago about charging clients a fixed monthly fee for the web / design / maintenance work he does for them.  You can read his post here.

In my business we do something similar for some clients – charging a recurring, monthly fee for our ongoing service and advice.  We call it a ‘retainer’ and explain to the clients it’s easier to charge a set fee rather than charging by the hour.

Alan Weiss has a concept of ‘value based’ fees.  Alan is a well respected consultant who doesn’t charge by the hour.  He determines the value he is able to bring to the client and charges accordingly. 

Think about that for a moment.  If your advice results in a client being $100,000 better off, what is that advice worth to the client?  It may not have taken you very long to come up with the advice, so if you charge by the hour, you won’t charge much.  But if you charge according to the value you create, you’re able to charge more.  Face it, if you’re experienced, you should be able to do the job quicker and more effectively.  Alan has an article about value based fees you can read.  I recommend his Million Dollar Consulting book. 

The key is being able to quantify the value you create in both monetary and non-monetary ways.

I’d like to combine the two ideas – recurring revenue and value based fees – and discuss them in this article and look at ways you can introduce recurring fees to your business.

There’s a number of business models that work on recurring revenue.  Some obvious ones are:

• Storage facilities that charge a monthly fee for rent
• Gyms and fitness clubs
• Pay TV
• Billboards
• Finance – think about the regular bank fees and interest payments they receive

I’m sure you can think of a range of others.

Think about gym memberships.  I remember reading some academic research that showed that people who pay their gym membership monthly attended the gym more regularly than those who paid it annually.  If every month you see the membership fees being taken out of your bank account, you’re more likely to want to get value for money.  Regardless of how you pay, most gyms structure their membership fees so that there appears to be greater value in having an annual membership rather than a pay-per-visit membership.

In many businesses where the product being sold is knowledge or information, there may an opportunity to do something similar.  The key is being able to sell a service that requires more than a one-off transaction.  The most effective models of recurring revenue come about where there is an ongoing relationship between the customer and the provider and the customer is receiving something of value for the money they’re paying.  In fact, that’s one of the main selling points to introducing recurring fees to your clients – I want to have a long-term business relationship with you, rather than a one-off transaction.  You then need to demonstrate the benefits to them of working with you over time.

The concept of switching costs is also important to consider.  Put simply, a switching cost is a cost to the customer to take their business somewhere else.  For supermarket shopping, switching costs are low – whilst it may be convenient to do all my shopping at the same store, there’s no major inconvenience to me to go elsewhere other than finding my way around a new store.  This can be common in businesses where the client makes their decision based primarily on cost.

Service businesses – businesses where clients buy knowledge – can build up high switching costs over time.  This is because as we know more about our clients, we can work more effectively with them, being more responsive to their needs and introducing products and services to them that they wouldn’t have thought of themselves.  The financial planning industry is a good example – as we learn more about our clients (and we learn a lot of personal things about them), it becomes too much of an inconvenience for them to go somewhere else.  The inconvenience is not just based on costs (i.e. fees to set up a new financial plan), but time is also a major factor.  The client thinks “I’ll have to spend hours with someone new building trust and helping them understand what I’m after.  It’s easier to stay where I am.”

Have a think in your business about how you can build high switching costs to discourage your clients going elsewhere.  High switching costs can improve client retention.  High switching costs also give you an opportunity to charge a premium as the client’s decision is based on a range of issues, not just cost.

An outcome of retaining clients over the longer term is that they become more likely to refer new clients to you.  As you demonstrate value over time and become a trusted outsourcing partner, you increase the likelihood of referrals.

Another benefit of recurring fees is that they allow you to budget and plan for the future more effectively.  If you know you have a fixed amount of income coming in every month, you’re able to plan better and commit money to growth strategies.  In some industries business valuations can be improved based on the amount of recurring revenue.  If I was looking at two service businesses, and one had clients on a monthly service agreement, I’d be willing to pay more for that business based on the likelihood of that revenue continuing into the future.

Finally, if you’re looking to introduce recurring fees, understand the things you do that the client sees as being valuable.  Survey your clients, ask them lots of questions – find out things you do (or don’t do) that are valuable to them.  And you need to find a way to show your value, even if they don’t directly see it.  We don’t see our clients monthly – most come in every 6 or 12 months, but they still pay their retainers monthly.  We make sure we communicate with them regularly, and help them understand that even though we may not have spoken with them that month that we’re still doing things behind the scenes that benefit them.  Have a think about your industry and look at ways you can remain in contact with the client and still provide value beyond a face-to-face meeting.

I’ve been inspired by Alan Weiss’ value based fees approach.  If you’re going to look to implement a retainer fee structure, try to get away from basing it on an hourly rate.  Think more in terms of a package of services you will provide, some of which is valuable to the client but not time consuming for you. 

Whilst you’re looking at packages, consider putting together a choice of 3 or 4 different service packages or offers that progressively build on the range of services offered (i.e. a basic service package through to a comprehensive or premium package).  Think about the financial and non-financial benefits to the clients.  Think about offering a priority service to those who are on a monthly retainer. 

I’m interested in whether you feel it’s worthwhile using recurring and value based fees in your business.  Let me know what you think.  And before you write this off and decide it would never work in your business, think again.  Challenge yourself and see if you can think of ways you can charge clients a regular retainer rather than a transaction-based fee or an hourly rate.

At home, we have a swimming pool. Here in Australia, we’re coming to the start of summer so we’ve taken the winter cover off the pool and are starting to clean it and get it ready for the first hot spell of summer.

My wife took a sample of our pool water to a pool shop earlier this week and came home with a bunch of chemicals and instructions on how to clean up the pool water.

We started adding the first round of chemicals and tested the water and discovered the ph levels – which had been too high – were now very low. We’d obviously added too much acid and reduced the levels too far.

So today (Sunday) I took another sample to a different pool shop. You see, around where we live there aren’t too many pool shops open on a Sunday.

I walked into the shop and discovered two things – it was empty (apart from me and the staff), and they had a big sign up that said “No Water Testing On Sundays”.  I talked with a staff member and they agreed to test the pool sample and tell me what was wrong with the water.  10 minutes and $45 later I walked out of the shop with a fresh lot of pool chemicals and directions on how to increase the pH level of the pool.

Here’s what I find a bit strange about this experience.  Firstly, I’m quite surprised that very few pool shops actually open on Sundays.  The way I see it, most people do their pool maintenance on weekends, so I would have thought that would be a peak time for pool place to be open.  Most hardware shops experience their busiest times on the weekend – why would a pool shop be any different?

Secondly, if you’re going to go to the effort of differentiating your business by bothering to open on Sunday, why don’t you test water?  You see, the home test kits for pools only measure the chlorine levels and ph levels.  So if I do a home test and then decide I need to buy some chemicals, I’ll go to the pool shop with a set shopping list, buy what I want and then leave.  The tests that the pool shops do, are a lot more comprehensive and test the alkalinity and calcium levels.  This means that the more things they measure, the more things I need to fix in my pool and the more chemicals I have to buy.  By doing a pool water test, the pool shops have the opportunity to open up a conversation with me that could ultimately result in them making a bigger sale.

So why don’t they offer the water testing?

Maybe they’re concerned they don’t have enough staff to cover the selling and the testing?  That’s the only reason I can thing of.  The solution to that is pretty simple – employ more staff if you need to, but promote the fact you’re open and testing water on a Sunday.  This particular pool shop has a good mailing list (I know because I’m on it), and they could easily write to hundreds of customers telling them about their Sunday pool testing service and the benefits of getting a comprehensive water test done monthly.

As a side note, I was impressed with the fact that the staff member had the initiative to test my pool water.  I’ve talked in previous articles about the things to do to exceed your client’s expectations, and I was impressed that she did.  She was responsiveness and she did demonstrate empathy.

So, in your business, what things do you do that aren’t customer friendly?  What’s your equivalent of not testing the pool water on a Sunday?  In my financial planning business I’m wondering if there’s an opportunity to stay open late one night a week, so clients who find it difficult to come in during the day have a chance to come in to see us.

What do you think?  What can you change to become more client-friendly?

How much is a can of Coke worth?  In Australia, it could cost you around $2 if you buy it cold from a store.  If you buy a can as part of a box of 24 from a supermarket, the cost per can might be as low as 60c.  On the other hand, if you’re at a sporting event or a concert, the same can may cost closer to $3.

Why does the same object vary in price by so much?

It’s all about the value that the customer sees in the product.

If I’m organised and plan to buy cans in bulk, I’ll be more price sensitive, because part of what I’m trying to do is save money. The value in that instance is to be able to buy in bulk.  If I’m out and incredibly thirsty and decide a can of Coke is what I’m after, I’ll pay more.  I’ll gladly pay extra for the convenience.

Value is an amazing concept.  People will gladly pay more for something that is of value to them.  The big problem is working out what it is that they find valuable.  You may actually be surprised.

If you sell a service, in many cases the service consists of knowledge.  You may write that knowledge down in the form of a book, you may verbalise it in an audio program, the knowledge may be used to prepare financial statements (accountant) or argue a point of law (lawyer).  In any case, your clients will happily pay for the information you have, if they see the value in it.

A few weeks ago I met with a client, aged 60 who is saving for retirement.  In the course of our conversation I learnt how much he was contributing to his retirement plan.  In Australia, there are limits that apply to how much you can save into your superannuation fund (like a 401k).  This man was on track to exceed the maximum allowable amount by over 50%.  Had I not picked this up and advised him to stop, he would have had to pay penalty tax on the excessive component.  This could have cost him around $20,000 extra.

What is that advice worth to him?  If you calculated my fees based on time, it would be worth only around $400.  If you calculated it based on value, conceptually, it could be worth up to $20,000.

Here’s another example to get you thinking.

A few years ago in the MBA I studied an accounting subject.  We were learning about how to ascertain the cost of producing goods.  They gave us the example of a manufacturing company who discovers a new way to make a gasket that goes into its machines.  This new design of gasket costs only 30% of the cost of the old one, and lasts up to 3 times longer.  The question was – how much do you sell it for?  We were given details of the company’s labour costs, and their desired profit margins.

Almost everyone suggested selling it for less than the cost of the existing one.  They all worked on the assumption that the company wanted to keep the same profit margin. 

I took the opposite view and suggested they could charge more than the existing gasket.  I figured if it lasted three times longer than the existing one, the buyer of the product could happily pay up to three times more.  They wouldn’t care about how much it actually cost the company to manufacture the gasket – they cared about the fact it would last three times longer – that’s where they saw the value.

Think for a minute about the service you sell – what to customers find valuable?

The easiest way to find the answer is to ask your customers and potential customers.  I know financial planners who have surveyed their clients and discovered the things the clients really valued were far different to what they thought they would value.

Clients are looking for things like peace of mind, trust, ease of doing business, experience etc.  Planners are thinking of things like good returns, products, quarterly statements etc.  Why would a client value a planner sending them quarterly statements of their investments when they can get that information every day off the web?

Many clients see a high level of value in planners monitoring their investments – letting them know if a fund manager is underperforming and recommending something new.  This is something most planners do, but few actually tell their clients they’re doing it.

I’m fascinated by the range of e-books and programs available for sale on the internet.  There are resources available for almost every topic.  Again, it’s a question of value.  How much will I pay for a book that enables me to make an extra $10,000 pa?  Is it worth $100?  $10?  $1,000?

Then answer is that it depends on the value I place on it.

Your role as a marketer is to help clients discover the value in the product or service you sell.  In our financial planning business, we talk a lot about our skills and experience – our clients see value in this.

There’s value in specialisation.  If you’re a lawyer who specialises in personal accident cases, a client who has a need in that particular area of law will place greater value on your knowledge.

If you’ve got a track record in a particular field, clients will place greater value on your knowledge or product.

Challenge yourself.  Ask some clients about the things they see value in.  Are there things you aren’t currently doing that they would see value in?  Are there things you currently do, but your clients see little of no value in?

Have a complete re-think and make your decisions based on fact, not just on what you think the truth is.

And next time you’re calculating a price for a client, think about the value you’re creating, and price according to that, rather than by your usual method.

Our financial planning business has an architectural firm as clients.  I visited them in their office the other day and was impressed by what I saw.

I guess if you’re an architect it could be hard to sell your value to some clients.  A lot of what you’re selling is intangible.  The plans you draw up may look ok, but how can I be sure the building you’re designing will look good once it’s built?

How do I know that you can do the job I’m asking you to do?  What’s the risk if I pick you and it turns out to be the wrong decision?

This firm has some smart ways to help the client feel at ease and relaxed with their ability.

When you walk into their office, the reception area is modern and stylish.  The seats are comfortable (there’s nothing worse than having to sit in a waiting room on an uncomfortable seat).  Their receptionist is well presented and polite.  She asks if I’d like a tea or coffee and lets me know when she’s told my clients I’ve arrived.

The colour scheme is modern without being too over-the-top.  Instead of the usual paintings on the wall, they display photos of the buildings they’ve designed.  In the past they’ve had framed architectural drawings on the walls.  Thinking about this point they seem to change the wall art every 6 months or so – perhaps a subtle indication to clients that they’re progressive and always looking for new ideas?

Their boardroom is well laid out – again the artwork on the wall consists of photos of their successful projects and framed drawings. 

This business has worked on a range of high profile projects here in Adelaide.  Because the photos provide images of such a range of projects, most clients would see a picture of at least one building that they’d know of and be familiar with.  This firm has worked on that building.  What a great way to build credibility.

Finally, the offices look great.  Whilst clients would usually only spend time in the front boardroom and interview offices, today I got to look behind the scenes and I was impressed.  You expect an architectural firm to have good looking offices, but so often only the public areas look great.  Not with this firm.  Their back office area looked great and provides a fantastic environment for their employees to work and learn in.

The overall impression you get from visiting this firm is that of quality.  You see the evidence of their past work, the care they take in designing their own appearance and you walk away with the confidence that they can help you with your project.

How do you show prospective clients that you’re good at what you do?

Are you able to show examples of your work?  Does your work environment look professional and convey the right image?  Or does it show that you’re out of touch and don’t care about your staff?

Think about the first impressions a client receives when they enter your office.  What do they think when they first walk in?

Have a think about how they’re greeted – who does the greeting, do you script what they say?

One financial planning firm I used to visit had a sign on their front desk that said ‘Welcome Mr & Mrs Client Name’ – they updated it before each scheduled appointment.  When the clients walked in they immediately felt special.

Another business invested in a good coffee machine and created a menu of all the drink options ranging from water, soft drinks to different teas and coffees. 

New clients are always looking for clues about the quality of the service and these little ideas help them feel more confident in the person they’re dealing with.

Do this exercise.  Pretend you’re a new client visiting your business for the first time.  What’s the experience like?  What do your premises say about your business? 

Have a think this week about the experience of visiting your office.  Is it good or bad?  How can you improve it?

It stands to reason that if we want to provide great customer service, we need to understand what our clients think great customer service looks like.  Spending time understanding their expectations can lead to more effective results.

The authors summarise customer service expectations into five areas: reliability, tangibles, responsiveness, assurance and empathy.  We’ll cover these in more detail below, together with some examples.

Reliability

This aspect of service delivery is all about doing what you said you were going to do when you said you were going to do it.

Have you ever waited at home for a tradesman to arrive hours later than they’d promised?  Or been frustrated that the person on the phone who promised to call back with some important information regarding your insurance hasn’t called?

When you’re selling a service, customers use reliability as one of the important clues to make a decision about whether or not to use your services.  You see, when they can’t see your physical product, they look for other cues that demonstrate whether you’ll be able to deliver the promised product.  Do you do what you say you’ll do?  This means when you say you’ll call them tomorrow, you actually do.  Or when you promise to post some documents, they arrive on time and the clients don’t have to call your office to follow them up.

If you say you’re going to do these little things and you actually do, then people have faith that you’ll be able to deliver on the big service they’re buying from you.

As an absolute minimum, if you want to meet your clients expectations, do what you say you’re going to do.

If you want to exceed their expectations, read on and do the next four things well.

Tangibles

How do you make your service come alive?  It’s hard for me to show a client a mutual fund, but I can talk about the companies they deal with every day that the fund invests into. 

As a client interacts with your service experience, they use the tangible things they see to make decisions.  If your offices look messy and untidy, this affects their perception of your service. 

What about when you stay in a hotel and they put that paper sash across the toilet lid.  It’s there as evidence that the toilet has been cleaned.  You wouldn’t necessarily notice the clean toilet by itself, but the sash draws attention to it.  The implication is – if the toilet is clean, the rest of the room must also be clean.

I’ve been in waiting rooms that have magazines from 5 years ago in the magazine rack.  Maybe it’s just me, but my brain thinks that maybe that business is stuck in a mindset of five years ago, and maybe they’re not up with the latest ideas and strategies that I need to know about.

Have a good hard look about the physical elements to your service – your office, appearance, documentation you use etc.  Does it convey to your clients that you’re professional and capable?

Responsiveness

Are you interested in helping customers?  Being responsive means understanding that when a client calls with a query, they are responded to quickly.

We recently changed the provider for our home phone.  It was an interesting experience.  When we called the sales area, we spoke with a live person very quickly.  Once we were an existing customer and had queries about the service not working properly, we were on hold for over 20 minutes before we got to speak with someone.  This shows to me that the company really isn’t that interested in me.

How do you show that you’re responsive?  One thing we do is try and return all phone calls on the same day we received them so our clients understand they’re important to us. 

How willing are you to help clients?  How can you show this?

Assurance

When a client deals with your organisation, do they have the confidence that the employees are capable and able to do their jobs well? 

We recently took our dog to our regular vet to get them to look at a lump that had developed on her side.  We were seen by a younger vet (not that there’s anything wrong with that!) and, after a brief feel and a quick blood test, she made a diagnosis that involved surgery.  To be honest, we felt that she’d rushed things a bit and maybe hadn’t done a complete diagnosis.  Of course, the cost of following her advice would involve a significant financial outlay as well as the mental pressure of having a dog have surgery.  As a result, we took our dog to another vet for a second opinion.

You see, when I haven’t got faith in your ability to deliver, I’ll question the things you suggest.

In your service business you need to find ways to convey your credibility to clients.  One very effective way is through the use of client testimonials.  Potential clients can read about how you’ve helped someone similar to them, and this gives them confidence that you’ll be able to help them in a similar fashion.  If you don’t have any existing clients who will give your testimonials, use case studies instead that show how your advice could benefit a particular type of client. 

Empathy

This last point is all about showing the client that you care about them and their personal situation. 

In our business we have a phrase “It’s not about the money”.  As financial planners, in one sense it’s actually all about the money.  But it’s not.  It’s about wanting to understand what the money represents to our clients – what are the things they want to do with it.

At the moment we’re dealing with the extreme market volatility.  We have clients who have lost 20% or 30% over the past year.  In our conversations with those clients we’re taking a lot of time to just sit and listen, and find out how they really feel.  We understand the pain they’re going through. 

We’ll say things to them that other clients in a similar position have already said.  If they’re retired, a popular phrase is ‘I can’t go back to work to recoup my losses’.  I’ll say to clients ‘I understand that you can’t just go back to work to recoup your loss’.  Most clients will nod their head and agree – they’re seeing that we understand how they feel.

Most people just want to be valued as an individual – that’s what empathy is all about.

Putting it Together

If you want to meet your client’s expectations, the best thing you can do is be reliable – deliver the service you say you’re going to deliver.  In other words, give them the outcome they’re expecting.

But if you want to exceed their expectations, you need to have a service process in place to deliver the elements of tangibles, responsiveness, assurance and empathy.

Think about a time in your life where you’ve had an experience where your expectations were exceeded.  How did they do it?  Chances are it wasn’t from just doing what they’d promised, but it involved one of the other four elements we’ve discussed.

Have a thought about your business and think of innovative ways you can deliver these five elements of service so that you don’t just meet the expectations of your clients, but you exceed those expectations.

Leave a comment below and let me know what you think.

Have you ever been served by someone who was obviously having a bad day?  We all dislike receiving poor or indifferent service – when I go shopping I want to feel special and valued by the stores I frequent, not ignored.

If I’m buying a tangible product, I can overlook a degree of poor service because I’m buying a tangible thing, not a person’s services.

But when I’m buying a service, I’m buying people.  I’m buying the idea that these people have the knowledge or experience that can help me with a need that I have.

And that’s where the performance aspect comes in.  I’ve had days in my financial planning business where I’m not giving the best performance.  I may be tired, rushed, preoccupied with other thoughts, and as a result I don’t give me best in an appointment with a client.

I’ve experience times where the support staff of businesses are clearly having a bad day and sadly create a poor impression of the business.

I’m a guitarist.  And I find interesting similarities with my music and my business.

If I’m planning for a concert (performance), there are a few things I need to do.

Firstly, I need to know the songs.  To do this I need to practice them by myself to make sure I learn my parts.  I’m relying on my other band members to do the same thing.

Step two is to rehearse with the band.  We’ve all learnt the parts individually, now we come together and hear how it sounds as a group.  We each contribute ideas and thoughts, and playing with others has the ability to inspire you to play at a different level.

Finally, we’re ready for the performance.  We go to the show ready – we know our parts and we have the confidence that the service we’re delivering (our show) is going to be valuable to our audience.

The point is, we don’t play a concert without preparation, but in our business life, we perform frequently without preparing properly, and we wonder why we don’t get the results we desire.

In your service business, how can you better control the performance?

Things we’re looking at in our business include:

·         Scripting how our staff interacts with clients, including how the phones are answered and the language they use.

·         Creating articles and brochures that reinforce the value proposition of the business.  We send these to clients before they see us so they can have a better idea of our business before they come in.  We’re very happy with the content of the brochure, and feel the words it contains can sell our business more effectively than we could if we had to rush to explain it at the start of an appointment.

·         Creating these articles has helped us develop the language and phrases of our business.

·         We make our staff aware of the power of first impressions.  In many cases the lowest paid staff member has the first contact with clients – you’d better make sure they’re having a good day.

·         Creating some defined systems and processes, to ensure the service is delivered in a consistent manner.  This includes having a set fee structure.

·         Through our podcasts, audio programs and (in the future) videos, we aim to create a series of tools that explain our financial planning process clearly to clients, no matter who their financial planner is within the business.  This enables us to grow our staff numbers, knowing that a large part of the interview process is controlled by us through these tools, not left to the individual planner’s discretion.

·         Finally, and most importantly, we remind the staff about the importance of the performance.  Like a band playing a concert, you only get one opportunity to deliver the service.  If you mess it up, you’ve still got an opportunity to recover, but some damage has been done.

How do you deliver a good performance?  Even the best bands get it wrong on stage sometime, and I’m not suggesting you control the service delivery so tightly that the individual personalities of people get stifled.  But what things can you do in your business to improve the performance factor?  Share them with us so we can all perform better.

Our financial planning business has an architectural firm as clients.  I visited them in their office the other day and was impressed by what I saw.

I guess if you’re an architect it could be hard to sell your value to some clients.  A lot of what you’re selling is intangible.  The plans you draw up may look ok, but how can I be sure the building you’re designing will look good once it’s built?

How do I know that you can do the job I’m asking you to do?  What’s the risk if I pick you and it turns out to be the wrong decision?

This firm has some smart ways to help the client feel at ease and relaxed with their ability.

When you walk into their office, the reception area is modern and stylish.  The seats are comfortable (there’s nothing worse than having to sit in a waiting room on an uncomfortable seat).  Their receptionist is well presented and polite.  She asks if I’d like a tea or coffee and lets me know when she’s told my clients I’ve arrived.

The colour scheme is modern without being too over-the-top.  Instead of the usual paintings on the wall, they display photos of the buildings they’ve designed.  In the past they’ve had framed architectural drawings on the walls.  Thinking about this point they seem to change the wall art every 6 months or so – perhaps a subtle indication to clients that they’re progressive and always looking for new ideas?

They’re boardroom is well laid out – again the artwork on the wall consists of photos of their successful projects and framed drawings. 

This business has worked on a range of high profile projects here in Adelaide.  Because the photos provide images of such a range of projects, most clients would see a picture of at least one building that they’d know of and be familiar with.  This firm has worked on that building.  What a great way to build credibility.

Finally, the offices look great.  Whilst clients would usually only spend time in the front boardroom and interview offices, today I got to look behind the scenes and I was impressed.  You expect an architectural firm to have good looking offices, but so often only the public areas look great.  Not with this firm.  Their back office area looked great and provides a fantastic environment for their employees to work and learn in.

The overall impression you get from visiting this firm is that of quality.  You see the evidence of their past work, the care they take in designing their own appearance and you walk away with the confidence that they can help you with your project.

How do you show prospective clients that you’re good at what you do?

Are you able to show examples of your work?  Does your work environment look professional and convey the right image?  Or does it show that you’re out of touch and don’t care about your staff?

Think about the first impressions a client receives when they enter your office.  What do they think when they first walk in?

Have a think about how they’re greeted – who does the greeting, do you script what they say?

One financial planning firm I used to visit had a sign on their front desk that said ‘Welcome Mr & Mrs Client Name’ – they updated it before each scheduled appointment.  When the clients walked in they immediately felt special.

Another business invested in a good coffee machine and created a menu of all the drink options ranging from water, soft drinks to different teas and coffees. 

New clients are always looking for clues about the quality of the service and these little ideas help them feel more confident in the person they’re dealing with.

Do this exercise.  Pretend you’re a new client visiting your business for the first time.  What’s the experience like?  What do your premises say about your business? 

Have a think this week about the experience of visiting your office.  Is it good or bad?  How can you improve it?

I’ve heard clients speak about their accountants and say something like “My accountant is very good.  I get a tax refund of around $1,000 each year”. 

Does this mean he’s done a good job?  Did the accountant actually do anything to influence the $1,000 tax refund, or would the client have received the same refund regardless of who prepared their tax return? 

Is it right to judge them based on results that are largely outside of their control.

A couple of weeks ago I was visiting a lawyer who commented he’d had a small win earlier that week.  One of his clients was being sued for $3M but my friend managed to negotiate so they could settle for ‘only’ $2.5M.  Only $2.5M!  In the eyes of his clients, he’d achieved a very good result and perhaps in that case it was fair to judge his value based on that result.

We get it in our financial planning business.  I’ve had clients say “I’m really happy with my adviser – the funds we’re invested into did really well last year”.  “Really well “ – compared to what? 

What if they made 15%?  Would that be good?  What if other similar funds made 20%?  Would that make the comparison different?

Ultimately, it’s the wrong measure and I make sure I tell clients that.  There’s no way I want them to judge my value based on things that are out of my control.  If I take credit for the years that their investments rise in value, I’d better also take the blame when the decline.  No way!

When I see a new client, I ask them a couple of questions to help them focus on how they’re going to judge the success of the relationship.  Some questions I like to ask are:

• What would you like to achieve from our meeting today?
• If we were sitting here five years from now, what would need to have happened to make you feel that our professional relationship had been worthwhile?
• What are you looking for from us?
• How do you envisage we can work together?
• How will you be making a decision about who to work with?

I love the last question.  I usually ask it if a client indicates they’re shopping around.  I explain to them that I’m happy to prepare some recommendations, but it would help me greatly if they told me how they were going to make their final decision.

They’ll generally start to talk about things like price, returns, fund selection etc, but eventually they’ll decide things like trust, confidence and peace of mind are more important.

Being upfront with clients about what you will and won’t be responsible for is the only way to ensure realistic expectations are set and can be managed.

I believe it all comes down to being able to define your value to the client…on your terms.  Be open about the things you can and can’t control.  Take credit for the things you’ve done for them.  Don’t be afraid to ask questions about what they value in the relationship.

How do you do it?  What things do you say to clients to ensure their expectations are realistic and manageable?