Tag Archives: Client

How Do You Maintain Your Culture as You Grow? Five Thoughts

Situation: A professional services company wants to grow while maintaining the small company atmosphere that has been the key to its success. There is a limit to how many clients a manager can manage, and with this the reality that if the firm is to grow they will have to bring on more client managers and support personnel. How do you maintain your culture as you grow?

Advice from the CEOs:

  • To maintain your boutique atmosphere, consider hiring to fit your needs rather than to maintain a culture. Use team meetings to direct team members while communicating and instilling the culture that you wish to maintain.
  • Don’t risk diluting the strength of your client relationships. A $250K client who is fully committed to your service may have more demands than a $1M client for whom you only represent 10% of their business.
  • Service companies with the highest profit ratios rotate customer contact among several qualified people. What matters is the level of service provided, not the individual providing the service.
  • Grow by adding locations. Instead of growing vertically in the same office, grow modularly by spawning additional offices.
    • Create an optimally sized model for the level of service that you wish to deliver.
    • Design the organizational structure for this model and identify the order in which slots will be filled as business grows through each office.
    • Develop a service and organizational template with standard operating procedures, metrics, technology, and reporting.
    • Once the model is created, spawn it.
  • Focus your business. Define a niche that you can serve better than your competitors. Focus on this niche and develop a sustainable advantage over your competition.
    • Assure that your service delivery is seamless to the client and make sure that it remains seamless.
    • Offer a menu of service options and price options by the level of service delivered. Some will want to buy a Mercedes, and some will be happy with a reliable lower priced sedan.

How Do You Scale with Scarce Talent? Four Factors

Situation: A software company relies on in-house expertise to both position itself and come up with unique solutions to clients’ problems. The CEO wants to significantly scale up the number of clients served per year. The challenge is that it is difficult to find software engineers who are experienced in a wide range of code languages. How do you scale with scarce talent?

Advice from the CEOs:

  • Start by looking at the load carried by your current employees. Do they have the capacity to significantly increase the number of clients that they serve? Do you have sufficient back-up to serve existing and new clients should something happen to a key employee? It’s one thing to have ambition to expand, but another to assure that you have the capacity to serve both existing and new clients.
  • Take a close look at your org chart.
    • What happens and where are the exposures when you double the current service volume? Where will the greatest stresses occur? These are the first areas in which you should start to build redundancy.
    • From an HR standpoint, you need a leadership development plan that extends down your organization chart. Use the stress analysis just mentioned to identify the areas in greatest need of additional resources and leadership development.
  • Look for areas where you can off-load current responsibilities to support staff to increase the capacity of your current talent. This increases potential capacity as well as the overall value of the company.
    • The lack of redundancy may prove to be detrimental to your ability to attract new large clients. Large potential clients and partners will use whatever means they have at their disposal (including stealth visits to your offices by local reps) to vet your organization before they make a commitment to you.
  • New client and partner relationships are like new product introductions.
    • A few early adopters will jump on your opportunity.
    • Many of the most established clients or partners will sit on the sideline to monitor the experience of early adopters.
    • If you trip in your service delivery early in your scale-up, most of the remaining targets will be slow to support your offering.
    • Count on the first two years of building additional clientele to be very intensive. It will distract you from many of the functions you perform today, unless you have additional personnel to support this.

What is a Fair Revenue Split? Five Pieces of Advice

Situation: A professional services company is constructed as a network of members. The company’s contract specifies that if a member of their network goes to work for a client – even a client that the member brought to them – the client owes the company a fee of 50% of either the member’s salary or the annual consulting revenue paid to the member. This is onerous. What is the best way to respond? What is a fair revenue split?

Advice from the CEOs:

  • This does seem like an onerous provision. It is unclear whether the bite is as fierce as the growl.
  • Consult a lawyer. If you quit the network and go to work for the client, what is the level of risk that the company will successfully sue, and what you can do to mitigate this risk?
  • If the offer from the client is appealing, quit or avoid using this company’s services. Given their cut to your revenue you will see a net gain in your own pay for services rendered.
  • If several members agree that this stipulation is onerous, team up and start your own network with better terms. This can provide you and the others with an annuity revenue stream.
  • Integrity in professional circles is everything. Whatever course you decide on, be up front.

How Do You Rebuild a Company? Nine Strategies

Situation: A CEO is in the process of rebuilding the firm following a period of inactivity. Historically their marketing was word-of-mouth. How do you reestablishing a network which has been dormant for a period, find new clients and communicate an updated value proposition? How do you rebuild a company?

Advice from the CEOs:

  • Track down and visit old customers and contacts. Let them know that you are rebuilding the company and ask for their advice and help.
  • Use LinkedIn to find and reconnect with old contacts. Have breakfast or lunch with them, even those who are retired. Reestablish old connections and ask for an update on their companies and activities.
  • Focus on your knowledge base and the results that you’ve produced historically. There are more technology choices available now than there were in the past. Help old and prospective new clients to navigate the array of choices.
  • Development assessments to show your prospects where they are and where they need to focus their effort.
  • Many have built companies on their own – without professional assistance. The results often look good on the surface but lack a solid foundation. You have the perspective and expertise to bring it all together in a coherent and cohesive strategy.
  • Rejoin professional associations and networks that you may have dropped.
  • Go virtual – use virtual assistants to manage expenses while you rebuild.
  • Do webinars, and give talks on developing and executing a successful plan.
  • Create some pro-bono or low-cost programs for charities. Your target is the Board Members who may become future clients.

How Do You Enforce Meeting Attendance? Six Suggestions

Situation: A company has many meetings. Organizers calendar meetings on Salesforce.com. Despite this, participants show up late, and sometimes not at all. When the right people aren’t present they must re-schedule the meetings. This ends up wasting valuable time for managers. How do you enforce meeting attendance?

Advice from the CEOs:

  • The answer depends upon your company culture and priorities.
  • If you have a production-focused culture, absence and tardiness may not be tolerable. Companies with this type of culture can take the following steps:
    • Call out late arrivals and absences immediately – the first time take them aside and explain that tardiness or absence is not excusable.
    • Called out repeat offenders on the spot!
    • One company has a policy that if you arrive late you stand for the period that you’re late. This has been very effective.
    • The example that you set reinforces desired behavior for the others.
  • In client-centered service organizations the rules may be different. Some companies feel that customer calls and meeting customers’ needs comes first, even if it means that the meeting starts without a key participant.
  • Match your meeting discipline to your culture.
  • The quality of meeting is dependent on quality of the meeting facilitator. Make sure that you have the right people leading the meetings to keep them on time and on topic. This may improve meeting timeliness.
  • If this is a challenge for your company, meet with those involved. Clarify the problem and confirm the reality of problem; then agree on the solution and gain their commitment to comply.

How Do You Test a New Service Delivery Model? Seven Thoughts

Situation: A company targets mid-sized clients with pricing that is similar to its competitors. They believe that their principal differentiation is their relationship with their clients. The problem is that this is also what all of their competitors claim. They are considering testing a new pricing concept – a monthly fixed fee that will provide a pre-negotiated set of services at a favorable discount, with a weekly presence in their clients’ offices. How to you test a new service delivery model?

Advice from the CEOs:

  • This looks like an appealing concept. With this arrangement there is no clock ticking and the client may view your various services as a more open menu of options available to them.
  • Another company has a similar relationship with their CPA firm and have both enjoyed this and are using more services from this firm.
  • Just a regular presence in the office is worth the retainer.
  • Another appeal is that this allows regular participation in management and Board meetings.
  • Another CEO offers a similar program for her professional service company’s clients and have found it successful.
  • Since there appears to be strong support for this model within the group, what is the best way to implement this new offer?
    • Negotiate an initial monthly rate for a set level of services as a retainer without a clock.
    • Agree to a periodic review and adjustment of services and pricing – perhaps quarterly – based on the time and services that have been provided during the preceding period.
  • How do you sell this program to those within your own company who are skeptical?
    • Try the program with three clients on a limited trial basis and measure it.

How Do You Respond to Unreasonable Demands? Three Thoughts

Situation: A CEO has observed an increase in the frequency of demands for last minute meetings from an important foreign client – sometimes with 12-18 hours’ notice. Requests for these meetings are often the evening before the requested meeting and with no regard to preexisting calendars. The client always says that they have sound reasons for the request. What are the likely consequences of push-back? How do you respond to unreasonable client demands?

Advice from the CEOs:

  • While allowance must be made for specific circumstances, there is a tendency within some cultures to press for special consideration. Part of this may be a negotiating tactic. One CEO has found that when he pushes back, the side requesting special consideration often yields to his needs and backs off the special request.
  • Treat these as you would similar requests from a domestic investor or client. Point out the late call and that you are already booked for the time requested. Ask whether there is any flexibility to the requester schedule and offer available time alternatives. Listen closely to the response and proceed accordingly.
  • Depending on the importance of the client and individual calling, some CEOs prefer to comply with requests like this, at least the first few times that such requests are made. However, when the requests become a regular occurrence, as described above, they rely on the recommendations outlined above.

 

How Do You Set Up Co-Development Partnerships? Five Thoughts

Situation: A company has clients who are interested in projects for which the company’s partners already have partial designs. There is an opportunity to leverage these partial designs into development of full solutions for their clients. How should the company approach this in a way that satisfies their customers and is fair to their partners? How do you set up co-development partnerships?

Advice from the CEOs:

  • Given this opportunity it is no longer important who performed what part of the development. As long as your partners have quoted you what they believe to be a fair price for their development pieces, you are free to accept their price, complete development to your clients’ specifications, and sell the full solution to the client at market prices.
  • What you bring to the table is the opportunity to rapidly monetize the technology. This is something that your partners can’t do, so by filling this role you are acting in the interest of all parties.
  • What you charge for your work and the full solution depends on the potential value to the client. Time is money, and delivery now is worth a premium price to a client who needs your solution and wants to release their product as soon as possible.
  • This strategy is particularly applicable to early stage companies who need to release their initial products and start generating revenue.
  • Take a note from Bill Gates – sell the product for a good price and then buy or acquire the supply.

How Do You Communicate Your Value Proposition? Four Methods

Situation: A company offers a service that can potentially boost clients’ revenues by 50% or more. However, the CEO has found it difficult to communicate this value proposition to potential clients. While some clients understand and have bought the company’s service, too many others have not. How do you communicate your value proposition?

Advice from the CEOs:

  • Not everybody will buy any service, no matter what advantages it offers. Here are steps to take:
    • Make a list of clients that you have closed, and those that you have not.
    • Identify whether there is a difference in the profile of the clients that you’ve closed and those that you didn’t.
    • From the commonalities among those clients that have accepted your value proposition, create an ideal customer profile.
    • Use this profile to pre-qualify potential new clients and assure that they meet this profile before investing in sales efforts.

By focusing sales efforts on those clients that you are most likely to close, you will improve your close rate and also reduce your sales cost to revenue ratio.

  • As you cultivate a new prospect, identify those individuals within the client company who can block your sale. Make these individuals heroes for supporting your offering. Offer them appealing learning retreats. Offer augmentations that appeal to the unique needs of the client. Raise your prices to fund these augmentations, but more than cover these costs with boosted revenues to the client.
  • Focus on the key WIIFM – “What’s in it for me” – that will appeal to key purchase influencers. Enlist these people as your evangelists within the client.
  • Emphasize not just financial benefits, but quality of life benefits that will accrue to clients through your service. Back this with a guarantee that you feel comfortable making.

Is It Time to Raise Prices? Six Suggestions

Situation: A company will be losing a client in the near future. However, the client is still buying from the company as sole source supplier while they develop alternate suppliers. Should the company raise prices, and if so by how much? Is it timely to raise prices?

Advice from the CEOs:

  • A factor in this decision will be your history of raising prices in the past. If you have increased prices to keep pace with inflation and your costs, look at the frequency and magnitude of these increases. Provided that the increase that you are considering is not out of line with past practice, it should not come as a surprise to your client. If you have not raises prices in the past, be prepared for push-back.
  • However you decide, be sure to maintain the relationship. You have a long relationship with this client and you never know what their future needs will be. As to the amount of the price increase, if they are reducing the volume of their purchases, you can raise your prices by 10-20% based on the loss of volume to cover your overhead.
  • Be prepared with logical arguments to explain the price increase to the client.
  • If your discussions with the client’s representative have become tense, it may be better to have someone else within your company lead this discussion. It’s OK to tie the emotional component – having to lay-off employees, etc, – into your story.
  • If you have an advocate within the client company, involve them in the discussion and give your advocate the ammunition that they need to support your case.
  • Adjust your staff and costs to fit the new reality.