This is the second in a series of posts on how Professional Firms can get more referrals. Read the first in the series – Referrals: You’ve Got to Have A System

To some degree, succeeding with referrals is something of a numbers game. More referrals equals more business. However, for busy professionals who need to balance business development with billable hours, it’s rarely wise to sacrifice quality for quantity. Better to go for a smaller number of high probability referrals and devote enough time to convert them to sales.

So what makes a high quality referral?

Referrals work because of transferred trust. Obviously I am going to put more credence in a recommendation from a colleague or business partner I know and trust and who I know has experience in the area than from a casual acquaintance or someone I bumped into at a networking event (although it’s surprising how much credence we do give to those more distant referrals). The higher the level of credibility of the referrer, the higher the quality of the referral.

In addition, the level of endorsement we get in a referral can be crucial. This is why referrals from clients can be so valuable. Referrals from clients are more credible because they have actually experienced our work. And if we have performed exceptionally well the referral will be much more complimentary than a referral from business partners who know us but have never worked with us ever could ever be.

Finally, a high quality referral is a targeted referral. We are far more likely to get a sale from a prospect who we know needs our services right now and has the budget to pay for them than from a random, unqualified “name and number”. This is one of the frequently overlooked strengths of referrals. In many professional service businesses, client needs are often difficult to detect from the professionals perspective. Businesses considering a takeover don’t like to make their intentions public by announcing they’re looking for M&A advisors. Couples with marital problems try to show a united face in front of strangers. Companies planning to make major layoffs and needing HR and employment law advice rarely want the news to leak out until after they’ve had that advice. As a result consultants, lawyers and other professionals rarely see these opportunities on their radar screens until it’s too late. However, an insider or current advisor in frequent contact is often alerted to these opportunities well in advance. That’s why accountants, who are in frequent contact with their client businesses, are such sought-after partners by lawyers and other professionals. They can give highly targeted referrals to clients with pressing needs.

Putting all that together gives us what I call the “Referral Formula” – a simple guide to the key areas professionals should work on to maximise the value they get from referrals:

Referral = Number of x Potential of x Credibility of x Strength of
 Value     Referrals     Prospect        Referrer      Endorsement

Future posts will go into more details on specific aspects of generating more referrals

For many decades, perhaps the most successful client development strategy for both professional service firms and individual professionals has been one of focusing on a small number of high value clients.

As Andrew Sobel points out in “All For One”, a consultant or accountant only needs a handful of good clients to make a great career. And most successful professionals will maintain around 15 to 20 truly important client relationship over their business life.

Building a small number of deep, trusting relationships pays off much more than having shallower relationships with a broader group because there’s a very high probability of converting each prospect into a client.

However, more recently, an alternative strategy has emerged. Fuelled by the ability of technology to allow relationships to be developed with large numbers of people via email newsletters, contact management software, Linkedin and other networks.

This strategy focuses on developing a very large number of shallow relationships: people who know of you, who have read your material, who may have interacted briefly via email. But not people you know very well.

This strategy pays off because – thanks to the efficiencies of the technology – very large numbers of people can be interacted with to a much deeper level than was ever possible before – and at almost zero cost. Someone who receives your email newsletter and who occasionally asks you a question on a forum is not a deep relationship – but it’s much deeper than the non-existant relationship you would have had historically before the advent of technology. Even though the conversion of prospect to client is much, much lower than for deep relationship – it works because of the law of large numbers. A 5% conversion rate when you have only 20 potential customer will not lead to much business. A 5% conversion rate on an email list of 20,000 is pretty impressive. And it can open up your services to a global market (provided you can deliver globally)

Now obviously, different strategies work best in different situations. It’s of no real value for an HR consultant focusing on clients around Birmingham to have a huge global email list of 30,000 prospects if hardly any of them are in her core market.

Conversely, it’s highly risky to focus on a handlful of prospects if you have a small one-off service to deliver which can’t be repeated for the same client.

But as long as you find a good fit between your target market and your strategy (and also your own preferences and skills), then either of the strategies can be highly effective. And it’s perfectly possible – even desireable – to run both in parallel. And the “broad net” approach can often identify high potential candidates to enter the “in-depth nurture” approach.

But where the problems occur is when you get stuck in the “muddy middle”. Where you build only shallow relationships – but with a small-ish number of people. This can happen in one of two ways:

• A professional focusing on the in-depth nurturing approach can allow his target client list to expand too much and end up diluting his efforts with his real high potential clients.
• A professional pursuing the broad big-numbers approach may fail to build his contact list enough – and as a result the low conversion rate combined with a small prospect list will mean he wins little business.

How can you avoid these mistakes? Make sure than in your marketing plan you have seperate plans for each of these strategies. Make sure you are doing what’s needed to make each strategy succeed.

The nurture strategy requires you to identify clearly your very high potential prospects then work diligently to make yourself as attractive to them as possible and to interact with them as much as possible.

The broad big numbers strategy requires that you build a large, targeted list and that you tailor your marketing messages to the segments in the list.

Do either or both of these strategies well and you will be on your way to having a growing and profitable practice.

But whatever you do, don’t get stuck in the muddy middle.

One of the biggest barriers professionals have in developing their selling skills is that they simply don’t see themselves as salespeople. Many carry round negative sterotypes of salespeople – but even when they don’t, their image of a successful rainmaker is of a charismatic extrovert with highly developed social skills.

Not fitting this model themselves, they often fear that they don’t have what it takes to sell effectively. This mental block can prevent them from taking some simple steps to improve their sales capabilities.

Jim Wigg of Epicurean Associates presented a seminar on “Empathy Selling” at a recent pro-manchester meeting. The seminar looked at different Empathy Styles – and how each style had different sales related strengths.

The advantage of this model over other psychometric assesments is that it doesn’t focus eccessively on one particular type being the “natural salesperson”. By highlighting the sales strengths of each type, it allowed the professionals attending to see how they could grow their sales capabilities without having to have a “personality transplant” and adopt an extroverted style that simply wasn’t them.

By breaking down that initial barrier and helping them see that there are multiple ways to succeed in selling, and that you don’t have to fit a particular sterotype personality or style; they were freed up to think about how they could improve.

Jim’s an engaging and knowledgeable presenter. If you get the chance to attend one of his seminars I recommend you take it up.

You can take a simple “empathy styles” questionnaire on Jim’s site here

When I was compiling Rainmaker Resources I scoured the net for articles, blogs, podcasts and videos of value to business developers in professional services. Most of these resources are, of course, produced by consultants and advisors who aim to help professionals in these areas. I informally categorised the firms and individuals I found, with the intriguing result that they all fell into one of three camps:

• There are many advisors who cover all types of professional services firms (lawyers, consultants, accountants, architects, engineers, etc.). I fit into this camp, as does David Maister, Ford Harding, Suzanne Lowe, Bruce Marcus, Mike Schulz and John Doerr, etc. (Bracketing myself with those giants of professional services is probably the most egotistical thing I’ve done for ages – as they say in Wayne’s World: I’m not worthy).
• There are a number of advisors who focus on law firms: Larry Bodine, Gerry Riskin, Allan Colman, etc.
• Rather fewer advisors who focus on consulting – Alan Weiss is probably the leading name here – others tend to mainly offer training and resources - e.g. SBR Consulting, the Guerilla Consulting team (perhaps consultants don’t like being consulted to).

And for accountants?

Er, nothing really. I drew a blank.

Maybe I’m looking in the wrong places – I’m a consultant by background rather than an accountant. But I’m one hell of a googler. And still I came up with nothing.

So maybe accountants don’t take advice. Or maybe advisors don’t like working for accountants. Maybe there’s a fantastic niche available for anyone willing to specialise.

Or maybe I’ve just got a blind spot when it comes to resources for accountants. So if you know of any – please drop me a line and I’ll add them to the site.

Ian

An excellent post by Matt Brazil caught my eye recently. It’s provocatively entitled Are Social Networks the Last Nail in the Coffin for Cold Calling?

Now, of course, the increased prevalance of social media (and Matt includes blogs, articles, podcasts, etc. in that group) aren’t going to completely kill off cold calling. But Matt’s point – based on a lead generation experiment he ran – is that for many businesses they may now present a better return on investment than cold calling.

In the case of professional services: article writing, seminars and speeches have always been a fantastic business development device for the larger “names” in the business. They provide advanced clues for potential buyers to the credibility and knowledge of the consultant, lawyer, accountant, engineer or architect who wrote the article or delivered the speech. Given the intangible nature of professional services; those clues are often an immensely powerful lever to at least get the professional engaged in a dialogue with the potential client.

Historically, speech-making and article writing has often been the preserve of the well-known individual or the major firm. Most people read a small number of quality journals so competition for placement was high and the chances of a small firm or unknown individual getting a high degree of visibility was slim.

But like many things in life, the internet has changed all that. Not only is it much easier for good quality content to get published on a plethora of sites and blogs; but potential clients have changed the way they find material. Nowadays they don’t subscribe to a small number of quality journals in the hope that something of relevance will appear every few months – they search for what they want, when they want it.

So equipped with some half-decent SEO and an interesting niche to write about; smaller firms and less well-known professionals can replicate the marketing tactics of the industry giants.

Of course, actually being able to produce quality material that really is going to raise your credibility is a whole different story. But at least today the barriers to publishing and being found have all but fallen.

Ian

I spend quite a bit of time scouring the net for high quality resources and information on business development and marketing for professional services. While they have a lot in common with product sales – particularly large, complex sales; there are also a number of unique factors which need to be taken into consideration when marketing and selling professional services. Unfortunately, there are relatively few high quality resources available to give guidance in this area.

Well, the good news is, I’ve created the Rainmaker Resources (www.rainmaker-resources.com)  portal as a guide to some of the best resources on professional services rainmaking available on the net: blogs, articles, podcasts, videos and books.

The portal reflects my own personal opinion, of course; but please feel free to add your own favourite links and resources – either directly (it’s a Squidoo Lens) or drop me a message and I’ll add it for you.

Ian

 

It’s the holy grail of Professional Services – to become a trusted advisor to your senior clients. To be viewed – and sought out – as a source of valued advice and support.

The benefits from a business development perspective are clear: the professional who is the first port of call for a client with a business problem is in a tremendous position to help shape that client’s thinking, to build a deep understanding of the situation, and to establish strong credibility through the discussions. In other words, they will be in pole position to win any related work.

Read more

3 quick and simple steps that professional service firms (lawyers, accountants and consultants) can take to hugely improve their sales:

1. Cut the marketing and advertising budget in half
2. Take the money you’ve saved from this and use it to reduce the billable hours targets of your partners and get them to focus on business development activities instead
3. Ensure that the business development activities are being carried out effectively

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It’s accepted wisdom in marketing and sales nowadays that every business needs a strong Unique Selling Point (USP). “Differentiate or Die” has become the clarion call of consultants across the globe, urging their clients to (pay them to) develop clever positioning statements showing how unique and different they are to their competitors.

But does it work? Is a powerful, differentiated USP really critical for the success of every business?

Read more