Winning more business in professional services firms

Transcription

1 Winning more business in professional services firms A Guest Article by Chris Matthews June 2013

2 Shocking statistics What do you think is an acceptable level of new business success for a professional service firm (lawyers, accountants, consultants, etc.), measured from the point of receiving a request for tender (RFT) or similar, through to winning or losing the business? Interestingly, some firms do not track this statistic, and that tells you something about how important they think the subject is. But the results from those that do may shock you. Some of the biggest global professional services firms achieve less than a 20% success rate. They actually manage to lose four out of every five bids. It is common to hear partners across all types of firms say that since pitches often end up as a four-way beauty parade, a 25% success rate is par. So losing three bids in every four is somehow satisfactory. Some business development teams will tell you that nothing better than 50% success is realistic. All that time, money and energy and losing half of everything is the best they hope for. However, having run and grown two large professional services firms and now advising on this area, I can confirm that success rates of more than 75% should be the norm. That really is perfectly achievable. Certainly there s a need for firms to win more business: times are hard and getting harder. Competition is growing while client budgets are shrinking, so if you want to succeed and thrive in a shrinking market you have to win market share off your competitors. Some recognise this and, among the larger firms in the accounting and legal professions at least, major overhauls to their bid processes are being implemented in order to dramatically increase business development success. So, what do you do? Common issues with professional services bids It s worth noting why many firms have such poor success in bids, before going on to describe what can be done. For some professions, there has historically been little need to pay much heed to business development, as partners formative years were spent in an 2

3 expanding economy. The management consultancy industry, for example, saw growth rates of more than 20% in the 1980s and 1990s as their market expanded, and the accountancy profession saw an increase in demand driven by an increasing regulatory requirement on companies. That seemingly inexorable growth in demand creates a mindset that s hard to shake. On top of this, some partners have entirely the wrong idea about why clients hire them. In our work, when we survey partners across all types of professional firm, consistently around 90% of them agree with the proposition we put to them: Clients hire me, as opposed to a competitor, based on my professional skill. The reality is, they don t. Clients shortlist partners, or firms, based on assumed professional skill. Once on the shortlist it is the old-fashioned skills of understanding your potential client, demonstrating that you have their interests at heart, and that you will go that extra mile for them, that get you hired. Compounding these attitudinal issues, some firms face strong structural barriers to improving business development performance. For example: There may be no link between sales success and pay. (There may be legal constraints that inhibit this.) Business development success may only be factored into career reviews long after bad habits have become ingrained. It may be that the firm s leadership shows little interest (or inconsistent interest) in sales. Commonly, billable hours targets become the sole focus of partner attention and this may mean that individuals are reluctant to give up valuable time to wooing potential clients. There may also be simple, practical issues at work. There may be no sales process within the firm and little training on even the basics. The firm may not have a clearly defined sense of self, leading partners to become stumped when asked about what makes their firm different or special. Err, we are the Xth biggest firm in the UK is a giveaway response, here. Or it could be that some partners just cannot be bothered, either because they are too well paid to care, or because they dislike the idea of being a salesman (generally because they misunderstand how they are supposed to go about selling). 3

4 In truth, all these issues have to be addressed if firms are to be capable of transforming their business development performance. But there are relatively quick wins that can be made, too. Five keys to better business development Given the poor state of many firms business development processes, it is relatively straightforward to make dramatic improvements in performance, but there has to be sufficient will from the top of the organisation to make the changes stick. (In our work, it is common to encounter firms with reasonable business development processes on paper, which the partners ignore in action.) This is a subject that could fill several volumes, so in outline, here are the five key steps to take: 1. Assuming that your firm is receiving sufficient RFTs (if not, then that becomes a separate subject), the first key to improvement is to identify and decline those RFTs where you have little or no chance of winning (or the work is outside your firm s parameters for accepting business). There is no bigger waste of time and money than pursuing something you won t win. And the biggest predictor of success is whether you have (or are willing to invest the time to create) a strong relationship with the client, beforehand. 2. If you do have a good relationship with the client, take the time to visit them and discuss the issues underlying the RFT. An or phone call are third-best approaches. Taking the time to physically meet the client shows that you are prepared to put yourself out, and there s a very good chance that you will pick up far more information in the course of a visit assuming you keep your eyes and ears open, of course than you will in a call. The importance of getting out and doing these meetings cannot be overestimated. It doesn t matter if a firm has the most sophisticated business development systems in the world; they will come to naught if partners do not personally engage with prospective clients. You are trying to do three things in a visit of this sort: First, it is necessary to understand the issues that are behind the RFT. Most RFTs are vague or superficial and it is important to drill down and find out what s at the root of the problem. You need to use your knowledge of the client, their firm, their industry and the sorts of issues faced by similar firms, in order to have a thorough discussion. 4

5 Second, you need to understand whether your proposed approach will suit the client. So ask them about it. If they are not entirely happy with your initial suggestions, change them. There s nothing clients like more than a supplier who is flexible enough to accommodate their requirements properly. Third, you are trying to increase the personal rapport between you. Clients like working with people who are capable and pleasant, and who take a genuine interest in them and their business. It s possible to increase your rapport in personal meetings; pretty much impossible to do via , and pretty hard to do over the phone. And if you make that visit (or visits), you will be far more impressive and well informed than any competitor who simply sends an asking for more information. This may seem blindingly obvious to some readers, but look around your firm for the RFT responses that go out without a client meeting, or are copy/pasted from the last one. You are in an exceptional firm if you don t find any! 3. Next, you need to address the client's issues in your documentation. But note that if you have done the first step properly, you will find that you are in pole position already. There are two traps at this point. The first is to address the client s RFT which will almost certainly be vague and superficial literally. Lawyers are particularly prone to falling into this trap. An RFT may ask that, say, M&A experience be covered in the submission, and so the temptation is to be pedantic and simply regurgitate the firm s M&A experience, much of which the client will know already or which could be gained by simply reading the firm s website. Of course, if you have not visited the client, you will not have a good understanding of their issues in the first place. The classic second trap is to spend too much time talking about your firm and not the client s issues. Sounds obvious, but I should think that 80% of the RFT submissions we see are devoted to talking about the firm rather than the client. That stems from a misunderstanding of what the client is looking for: professionalism. Yet that s taken as read in getting you on the shortlist. 5

6 4. Finally, you need to approach the pitch itself less as a theatrical production and much more as a conversation between intelligent adults. Just as most written submissions we see spend too long talking about the firm and not the client, we see the same in presentations. And there is the added complication that too few individuals have the confidence to deviate from their presentation to deal with client questions or attempts to test you with challenging observations. Keep it informal (unless you have a highly formal client), keep it conversational, and above all else rehearse your answers to questions especially difficult or testing questions. Following these five guidelines is not difficult. It is hard work, but it will deliver a dramatically increased rate of new business success. Chris Matthews Managing Partner Sutherlands If you would like more information on any of the points covered in this Guest Article, please contact TCii on