Keep out of the "Muddy Middle" when Selling Professional Services
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-existent 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 1% conversion rate when you have only 20 potential customer will not lead to much business. A 1% 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 handful 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 desirable – 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 that in your marketing plan you have separate 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.