Service Firms (SFs) or Professional Service Firms (PSFs) provide professional services to other companies or to the public – essentially they sell time, either on a project-by-project basis, on a one-off basis or on some form of monthly contract and/or retainer – the focus is on people interacting with people and serving the customer rather than transforming physical goods.

The array of SFs is enormous. Everything from an accountant, an artist, an actors’ coach, an advertising consultant through to a Zen Buddhism teacher or an independent zoo inspector. The list is endless.

For me the term Service Firm or Professional Service Firm loosely describes these businesses.

While each industry is fiercely defensive about its uniqueness, the extraordinary thing is that the similarities are huge. You can deliver or write a piece for accountants or solicitors or web designers and it can be identical and will be well received as long as you cut and paste the right profession name throughout the piece.

Typically, the independent professional service firm has some common characteristics that give the PSF some unique qualities.

The ‘product’ is a service and is intangible which means that…

• It cannot be stored
• It gets consumed at the time that it is delivered so it cannot be re-used
• It is almost instantly perishable.

These characteristics mean that any business that is a PSF doesn’t quite conform to the standard product model of producing, storing, selling and delivering a product. As a result it has many advantages as well as many disadvantages over a standard product.

When you combine the characteristics of the SF with the characteristics of a small or independent business then you create a unique set of circumstances that explains why so many independent PSFs feel that they could be doing so much better.

Do you suffer from any of these traits?

• A passion for the business but few of the essential business skills
• A willingness to work all the hours that God made but an ignorance about exactly what is the best thing to do with the time
• Spending too much time in the business and not enough time on the business…

You are not alone. These traits are typical of a PSF business.

Common frustrations, pains and hurts include:

1. Not enough profit.
2. Not enough sales/customers.
3. Business depends too much on owner.
4. Can’t find good people.
5. Owner doesn’t have enough time.
6. Inconsistent operational performance.

Depending on your business, a list of failings might include some of the following:

• Lack of vision and purpose by the owners
• Lack of systems and processes
• Lack of financial planning and review
• Over-dependence on specific people
• Poor marketing/sales strategy
• Lack of knowledge of the market/competition
• Lack of money
• Owners working IN the business rather than ON the business
• Fear of letting go of financial control
• Fear of letting go of management control
• Inability to delegate.

And so on.

So, are there certain things that the high-performing independent PSFs do?

The answer is a big “YES!”

A lot of the answer is common to any high-performing businesses but there are some specific activities that relate specifically to the PSF-ness of the firm.

What do the great firms do?

In general terms, all great growing businesses are obsessed with:

• Planning while being aware of the outside environment (AKA strategy)
• Figuring out how to sell their products and services (AKA marketing)
• Understanding how to get on with people (staff, customers and suppliers)(AKA teams).
  

And what if you’re a small/independent business?

For small and independent businesses there are two additional attributes that separate the sheep from the lambs:

• A willingness to let go of management control and share the business ownership (because growing a business is like haemorrhaging cash)
• A willingness to let go of management control and take other’s advice (recognising that others can help and may even be able to do a better job).

For the small and independent PSFs you need to have all of the above but over and above that you also need to adopt what we call The Expert! model. The ability to have a way of doing business that puts you head and shoulders above your competitors. A way of doing business that takes advantage of your enthusiasm and passion for your topic that will give you the economic gains you also seek.

The formula we are talking about is:

Professional service

+

independent, privately-owned

+

systems and processes, The Expert! system, that mean that it attracts paying customers

=

a business making sustainable profits.

While the category of ‘service provider’ is huge, what they have in common is the selling of advice and expertise that will help the client.

There is a delicious irony in the behaviour of the majority of these businesses. They should be exemplars of their trade, demonstrating the highest values in every aspect of their field. Nothing could be farther from the truth.

Buried in the mire of working IN the business, delivering the product/service to the client in the best possible way (whatever that means!), or finding the next client or getting paid, they usually are less than impressive in the very field that they advise on.

The digital marketing company who has a really naff website, the graphic designer with an embarrassing logo, the accountant who isn’t on top of his own management accounts, the time management trainer who turns up late. You get the message.

It is not so much that they deliberately fail to walk the talk but the reality is that so many service firms just don’t cut the mustard.

These businesses need to map out what is called the customer service journey, listing (and scoring) every step of the customer journey from hearing about the service through to the purchase through to after-sales service. It is my belief that most businesses do not sit down and design the customer experience. It is something that just falls out of what is convenient to the service provider, to fit in with their map of the world.

The reality is that the customer experience is everything to the customer. It is the only thing they can really measure you by. And they would expect an accountant to have stunningly fast and crisp measurement systems (and yet it takes 21 days to get a breakdown of my bill..!), you would expect a web designer to have a faultlessly red hot seductive website, and so on.

The truth is that, in all the hullaballoo and noise that is associated with delivery, the very thing that we claim to be proponents of gets forgotten about. We fail to demonstrate our above-average ability in our field.

So, just imagine how impressive your service firm would be, how much of a no-brainer it would be to potential clients if you really did demonstrate brilliant skills in your area of expertise.

You should ‘smoke your own dope’ if it is as good as you say it is…

You’re a management consultant, trainer, coach, creative, financial, or employment professional, homeopath, architect, accountant, solicitor, surveyor. The list goes on – you sell a service and it is probably a ‘professional service’… you sell some kind of expertise. 

So,

• Do you struggle with marketing? Do you find it difficult to do?
• Do you wonder why you don’t get the results you feel you deserve?
• Are you great at doing your skill but aren’t so sure about how to get more/better clients?

All roads seem to lead to the notion that the well-managed expert business can win over the clients…but how do you do it?

FACT: Most people like to buy from an expert and not from a follower…

FACT: One accountant is better than another in the mind of a client only because the client thinks that he is…

FACT: Marketing is not a battle for the product but for the mind of the customer…

Here’s the problem.

Most PSFs (Professional Service Firms) think that the key to business success is their technical skill-set. They are wrong.

They don’t understand:

• What people really buy
• What people really need from them
• What people really want from them
• The importance of a good bedside manner
• The importance of demonstrating benefits/proofs/testimonials
• The business development process!

Most ‘professionals’ were trained to be technically excellent, but no-one told them how to run a business.

Tip of the day

You should become an expert – become an expert in the world that you work in.

People hate buying from a ‘follower’ or an ‘also-ran’ but love buying from an expert… whether you are an accountant, a homeopath or a plumber, you can do it…

And because everyone will know and see you as the expert… they will ask you to do the work and they will pay a premium price!

So what does an expert do?

• An expert focuses -  specific clients with specific problems/hurts/needs
• An expert writes – articles, white papers, books
• An expert possesses – the trappings you’d expect (online and offline), the knowledge, the expertise
• An expert knows – the movers and shakers, is an influencer
• An expert speaks – at conferences, events.

As well as the five attributes above there are two additional, yet underpinning, concepts:

• An expert has an ‘ology – a proven way of doing things
• An expert uses testimonials and endorsements –to demonstrate their credibility and underpin their reputation.

The interesting thing about these various aspects of being the expert is that they all interlock and inter-weave.

Once you clarify your specialisation then you can walk and talk and write about it to confirm your expert status. Each element of The Expert! model supports the others.

Experts present themselves in the position of authority or knowledge; they tend to be seen as what some might call ‘positioners’. They set out to adopt a specific position in the eyes of the customer whereas ‘prospectors’ are chasing work and clients.

The purpose of most expert activity is to command respect rather than to hustle for business. Often, experts take on what can described as an ‘education-based’ marketing approach to attracting new clients; and this education includes giving away valuable information and advice rather than giving a sales pitch.

The mindset of the successful expert is that: 

• Their activity gets them the prospects that they want
• They maintain their dignity and professionalism because they are not using heavy-handed sales techniques… they let interested parties come to them – a client pull/attraction approach
• They are educating and showing people how their expertise can help
• They establish credibility and this recognition is a key driver in personal satisfaction
• They have a systematic process for communicating and for delivering work, which means that they are not constantly re-inventing the wheel.

Put simply, most professional service firms make life very difficult for themselves.

The really small ones have no idea how to run a business; they spend most of their time struggling to find clients; the larger ones may be more successful but also struggle to keep clients in an ever-changing world where the clients, competitors and staff seem to be constantly changing their behaviour. I have to ask:

“When most firms in your industry look pretty similar (actually almost identical) then why should people bother to buy from you when they can buy from the competition?”

The Expert! model was first launched on the unsuspecting public at our Bright Marketing seminars (in 2002) and since then the workshop has been delivered over 200 times to approximately 15,000 people.

Every event has started the same way, asking the question,

‘What do you want to know how to do by the end of this session?’

At its simplest, the questions that audiences wanted the answer to came under one of five headings:

1. What works?
2. How to communicate? How to get heard?
3. How to focus? How to target?
4. How to stand out from the rest/how to be listened to?
5. How to get more sales with no budget?

The answer kept coming back with The Expert! model as the starting and finishing point of the discussion. More importantly, it has been the application (explicitly or implicitly) of the model that has led to so many business successes.

There is a group of professional service firms (PSFs) that grow nine times faster than the average. They are 50% more profitable than the average. So, what’s going on?

Doing the research for the new Grow Your Service Firm book, it was easy to see that high- performing service firms are the ones that have clients that believe in the business. The ‘positioning’ (and ‘targeting’) talks to clients in a way that the client can relate to and understand. The firm understands the client needs, hurts and wants and has a solution. The likelihood is that the service firm is a specialist and not a generalist. That is the Grow Your Service Firm ‘ology’.

High performers have always had a particular profile; they have always been identified as being different from the average. One of the eternal searches of small business research and economic policy has been to find and assist the high performers who create jobs with their growth. This has been a goal for policy makers and sellers of services to these gazelles or lions, or whatever you wish to call them.

So, how do they drive their growth? They could just spend more on marketing and sales. But the high performers don’t do that; they just become qualitatively better at the marketing and sales. Frederiksen and Taylor point out that the high performers do not spend proportionately the most on marketing and sales because they are already very good at it. They are simply more effective so don’t need to compete by spending the most. Obvious really.

The high performers actually spend (slightly) less than average firms on their sales and marketing activities. The high performers’ marketing spend isn’t quantitatively higher; it is qualitatively better. They spend less and get better results.

Every firm says pretty much the same boring thing, selling similar services to similar people using similar straplines and similar people with similar qualifications to sell similar services at similar prices etc etc. Clients have switched off; shouting louder just irritates them some more. The days of interruption marketing are over: people trust referrals, recommendations, word-of-mouth and reputation way more than any paid-for sales campaign. In fact, most people believe that businesses lie in the adverts!

The high performers, meanwhile, focus on client needs and priorities. They are not preoccupied with their own capabilities and expertise. They are not mesmerised by the reflection of themselves like some Greek myth. They focus their limited budgets on specific target customer groups and use a clear and easy to understand message. Simple really.

So, who is in this group of professional service firms that grow nine times faster than the average and are 50% more profitable than the average. How can you join them? What do you need to do?

The starting point I am afraid comes straight out of day one of your Marketing 101 class. You have to create and communicate a clear positioning that demonstrates how you can help your target clients… unequivocally. A totally compelling proposition becomes seductive.

As a starting point, ask yourself if you consistently communicate:

1. Your overt business benefit
2. The real reason you can deliver
3. The dramatic difference between you and your competitors

I meet very few service firms who have actually done this properly. As a result they deliver average results.

Well, the “we are ‘above-average’” statistic doesn’t just apply to male drivers.

A recent survey by Bain & Co reported that 80% of companies believed that they delivered a ‘superior experience’.

So, most companies assume that they are consistently giving customers what they want. Usually, in fact almost always, they are kidding themselves.

In the same survey, only 8% of the companies’ clients also believed that the companies were delivering a ‘superior experience’. I repeat, EIGHT PER CENT!!!!

In other words, 72% of the companies think they deliver superior service but their clients do not think the same. Are you one of the 72% who have got it wrong? And how do you know that you are not one of the 72%?

This classic delivery myopia happens for several reasons:

• We are too self-obsessed and fail to see the business through the customers eyes
• Most growth strategies end up short-changing/compromising existing customers
• Good relationships are actually very hard to build.

So, how to close the gap?

The 8% of companies that do have clients who believe that they offer a superior experience are different from the rest: they do design and deliver the right propositions and they develop the resources to do it again and again. This is, dare I say it, stating the obvious. But clearly it is not.

For me, a key issue is their focus on (or should I say obsession with) the customer experience.

In most service firms there is a gap between:

• What the firm believes the client needs/wants and what the client actually needs/wants
• What the firm believes it is selling and what the client is actually buying
• What the firm believes it delivers and what the client actually receives
• What the firm believes the clients thinks and says about the service and what the client actually thinks and says.

You need to sort out these gaps as they will turn from being gaps to becoming huge great canyons between you and your client.

This needs to be done now.

The incremental cost of selling the premium price product tends to be negligible so it makes sense to spend more time selling the better (and more profitable) offering. Despite this, there is an opposite pull – a force to dissipate the benefits of premium pricing. One which will damage your business.

So, here’s the problem, the paradox. In the interests of growing our businesses we look to maximise our opportunities to grow our client base. As a result we might abuse the various package offers and alienate our existing loyal customers by doing the following:

• Take away parts of the platinum offering to increase profits quickly
• Downsell clients as a quick win (losing out on the more profitable opportunity)
• Upsell clients when they don’t really want it creating resentment
• Discount the higher level offering to win the sale
• Forget about the platinum clients as we chase new sales.

Of course it is correct to sell (or rather to upsell) to people who wish to pay a premium price. Do not forget, however, that they are paying for and expect to receive the premium-priced service.

Creating different product packages (gold/silver/bronze) works but please be careful not to kill the goose that lays the golden egg.

Research, as well as an intuitive feel, consistently suggests that there are several key factors that inhibit the growth of a business.  No one factor dominates but rather a combination is what the entrepreneur normally cites.

The three key issues are:

1. Market conditions
2. Staff/recruitment issues
3. Cashflow, and
4. Competition

Put another way: finance, labour and market issues.

However, the growth question provokes some other arguments about growth that need to be aired.

One.  Of course market conditions impact on business growth; in a growing market, your business can grow without gaining market share. Think of the market as a balloon; if your market share is like a circle drawn on its surface then your area (turnover) will grow as long as the market grows – imagine blowing air into the balloon and how the circle will increase with the increase in size of the balloon.

Two. If you ask successful people to look at what held them back in the past then you get another answer entirely.

After the event, successful people do not dispute the importance of finance, market and labour issues.  Interestingly, these are seen as external factors. Research such as the LBS Pulse Report concurs with Tenon that the number one external factor holding back a business is, to be specific, market growth.

BUT… the key internal factors cited are lack of innovation and the thorny issue of willingness to accept the price you have to pay for the growth.

The plot thickens.

Here is the crunch… the core of the debate about growth and what holds it back… the ‘winners’ claim that the ability to grow is dominated by the internal factors (lack of innovation, fear of diluting ownership, aversion to debt).  So, to grow, you must possess conducive internal factors that dominate the hostile external factors.

At the heart of this argument is the price of growth… are you prepared to accept the loss of managerial and/or financial control?  If you are not, then do not pass ‘GO’ and do not collect your £200!

Three. Rather than focusing on poor performance let’s ask ‘What is it that the really successful businesses do?’ The successful are obsessed with:

• Where do we want to be in, say, three years’ time? ie strategy – planning while being aware of the outside environment
• What is it that our clients really want, and how can we get people to buy it? ie marketing
• How can we work together? ie teams and people.

This holy trinity of strategy, marketing and teams (underpinned by financial understanding) is an obsession that I find in all successful fast growth clients.  These clients don’t look at market conditions alone, shrug their shoulders and give up trying – they are constantly measuring the outside environment and constantly adjusting their game to suit the conditions.

It is probably changes in the outside world that will ‘get you’ in the end. Often imperceptible changes in the market place change the landscape that you are working in and you might not even notice the changes. It is the ability to recognise and respond to change that separates the exceptional from the average business.

So, when asking the question ‘What inhibits growth?’, we cannot expect a simple answer.  I agree that the number one issue is market conditions (when each participant can only have one choice).  However, the reality is more complex.

I have argued for and against the service and I believe that there is still a relative lack of interest in the subject (The Truth Is No-one Seems To Care About BL). Meanwhile we hear the cries of woe from the current BL staff.

But what about the clients??? What about the small/medium/growing businesses in need of help and assistance?

Another re-organisation of the Business Support Industry puts any programmes/initiatives on hold. And the ones who suffer will be the poor clients.

Leaving aside the huge irony of a Government department trying to sort out entrepreneurship, there will still be a demand for some form of support/assistance for budding and growing businesses.

I will be the first to argue that naive, inexperienced business people need help and assistance of some form – DIY is not an option.

Consultants will crop up all over the place to accommodate the nascent need. This will be a good thing for the high-performing consultants but it will be bad for many potential clients.

People who don’t know what they don’t know will get lured into buying wonderful promises and ‘get rich quick’ schemes as unscrupulous entrepreneurs fleece them of their money (Its Free And It Can Help Your Business… Whatever!!!).

So, what next?

1. All BL services go into freefall – no-one knows what is going on.
2. Several hundred (ex-BL) business advisers are being let loose on the market.
3. New options will appear scrabbling to fill the hole that will be left by the eventual demise of the BL.
4. The Government will create a new centralised solution to local problems. (How does that work?)

Maybe the market will solve the problem before the Government has finished its consultation…

However, for those of you who want to set up Hotmail on an iPhone – here’s a great little walkthrough:

A help desk is put in place by a company to provide technical support to their customers. A customer will either call or email the help desk and they will be allocated a unique number, usually called a ‘ticket’. The ticket is then internally assigned to a member of staff who is responsible for ensuring that it is dealt with promptly and in the correct manner. If the member of staff cannot resolve the problem then the ticket gets reassigned to someone in a more senior position. Managers can use the helpdesk software to monitor staff response times and the level of customer service that is provided.

The help desk is a central hub for all of your team. For example, your front line staff member will log a call and decide what action is needed. They can then place a task on an engineer’s to-do list depending on its urgency. The engineer completes the task and ticks it off his or her list which sends a ping back to the person responsible for the ticket. If the customer is happy and a satisfactory outcome has been achieved the ticket can then be closed.

Who uses a help desk?

Help desks are mainly used by IT and technology companies, though a lot of financial organisations and housing companies are starting to use them in an attempt to improve their levels of customer service.

What are the features and benefits of using a help desk?

• Prioritise calls and actions depending on urgency to ensure that each ticket is dealt with in an appropriate time frame.
• Sync the help desk software with engineers’ and consultants’ appointment diaries.
• Email templates can be used for speed and accuracy.
• A record is kept of all calls and emails to guard against misunderstandings and allow for accurate monitoring.

Is a help desk suitable for a small business?

It really depends on the type of small business that you run. If you have a small technology company or a business that is based purely online then it is likely that a help desk system will be useful to you. Here are a couple of businesses that would benefit and why:

• An estate agents/lettings company. Useful for logging tenant queries and repair requests right through to arranging maintenance appointments and emergency call outs.
• Computer repair shop. Your repair engineers can log calls from customers, book them in for repairs and then use the software to follow up on the customer’s progress once the repairs have been done.

These are just two very quick examples. Any customer-facing business needs to have a process in place for dealing with customer queries and complaints. Help desk software is one of the tools that can be used to help a business improve its overall customer service skills.