Entries from October 2007 ↓

Initial meetings with a new client / target should be approached like a “first date”. As this is where the romance and the woo-ing begins (and should never strictly stop).

Imagine I am a prospect and you are in your normal role as a professional lawyer, accountant or consultant and we meet for lunch to discuss potential opportunities.

Broadly, the same rules or etiquette apply to a meeting in this scenario as apply on a “first date”. It is potentially a “make or break” occasion. So what are the ground rules?

1. Don’t be late

Simple to understand. Yet simple to overlook - just don’t do it. Enough said.

2. Take interest and, most importantly, LISTEN

Ask me questions. Understand the key issues facing my business and what keeps me awake at night. Look engaged. Interested. Do not look over my shoulder for other potential prospects or people you might know in the restaurant (no matter how dull my conversation might be). Maintain eye contact. Under no circumstances try to sell me your services on our first “date” - this is akin to trying to walk me down the aisle way too soon! You’ll be moving too fast and it won’t be appreciated!

3. Pick up the bill

As your “hot date”, I expect you’ll pay for the honour. But there was never any doubt - was there?

4. Remember to follow up

The follow up after the meeting is as important as the meeting or lunch itself. Try to carry this out within 48 hrs of the get-together - ideally less. There are likely to be action or follow-up points from the meeting but even if you haven’t had an opportunity to complete these tasks, just call to say thanks again for the opportunity to meet up and to confirm that you’re dealing with the points discussed.

5. Making an impact generally - there are many other little but HUGELY important points:

A firm handshake (as a rule of thumb: don’t let go until you can identify the colour of my eyes)

If it’s the very first time we’ve met, please try to remember my name (do this by repeating it back to me during our initial exchanges it e.g. “Hi Steve, great to meet you”, then repeat my name in your mind 3 more times - “Steve, Steve, Steve” to make it stick). If you do forget my name (and it can happen), a clever trick to help minimise mutual embarrassment is to ask me again but when I reply “Steve” (red-faced), you say “sorry no, I meant your surname”. Far more understandable to forget my surname than my first name and therefore less embarrassing. Situation saved and back under control.

When I give you my business card, treat it with respect. By this I mean, hold it with both hands and take a moment to study it before carefully placing it in your breast pocket, card holder or wallet / purse - under no circumstances, grab it and stuff it in your trouser pocket without a second thought.

Take time to find out who can help me achieve my goals and connect me with your network. As well as making me feel important and respected, it could yield lucrative cross-referral work for both of us in the future.

Strive to “under-promise and over-deliver” - and not the reverse. This skill alone can have a significant positive impact as many professionals fail miserably by making overly-ambitious promises in the heat of a meeting and then letting things slide once they get back to the office.

And above all - please put some passion into it! We are on a “date” after all!

Richard Susskind is set to release an interesting book about the future of the legal profession.

In short, he predicts a bleak future for those law firms that fail to innovate and suggests that lawyers’ roles in their current conventional sense may become obsolete - primarily due to advances of technology and the commoditisation of certain legal tasks into routine units of work capable of being outsourced for a fraction of the price.

He lays down the challenge:

……for all lawyers to introspect, and to ask themselves, with their hands on their hearts, what elements of their current workload could be undertaken differently — more quickly, cheaply, efficiently, or to a higher quality — using alternative methods of working. In other words, the challenge for legal readers is to identify their distinctive skills and talents, the capabilities that they possess that cannot, crudely, be replaced by advanced systems or by less costly workers supported by technology or standard processes, or by lay people armed with online self-help tools.”

Music to our ears here at Passionate Practice. He goes on to say:

I will argue that the market is increasingly unlikely to tolerate expensive lawyers for tasks (guiding, advising, drafting, researching, problem-solving and more) that can equally or better be discharged, directly or indirectly, by smart systems and processes. It follows that the jobs of many traditional lawyers will be substantially eroded and often eliminated. At the same time, I foresee new law jobs emerging which may be highly rewarding, even if very different from those of today.”

To secure these highly rewarding new law jobs, legal firms should be working today on building a revitalised infrastructure and deeply ingrained culture based on the fundamentals of:

• Clients
• Creativity
• Communication
• Collaboration

Things we are passionate about. Clearly.

In the second of a series of short articles following my personal experience on the “other side of the desk” i.e. as a client, we consider the importance of effectively communicating the value of advice or work being provided in order to manage client expectations (including maximising your fees) - so that both parties are happy.

Consider the following ‘real life’ example:

The unexpectedly large bill (which should have been expected….)

We asked our incumbent professional tax advisers for assistance in relation to a reorganisation of part of our group (one of the few additional advisory assignments they actually received). The project was quite technical and we didn’t have the internal resource to undertake it so, following a brief call, our advisors got cracking on a technical report and step plan, as requested.

Mistake No.1: Neither our advisers nor us planned the assignment sufficiently well in advance by, for example, agreeing a scope of work (this would come back to bite us later!)

Two weeks later the report was issued by our professional advisers along with the step plan. The steps were carried out as instructed. No great shakes. This was a piece of “house-keeping” that we had been meaning to carry out for a long while. We were pleased to have finally sorted it but, being brutally honest, this was not a hugely valuable assignment (for us). So imagine our shock when we received a bill for many £’000’s - this was not what we were expecting. How could it possibly have cost this much for a c12 page report and a step plan? Surely there was some mistake - but whose and why?

Unravelling the mess
Firstly, we ended up sitting on the invoice for a few weeks and doing nothing. Diddly-squat. Why? Because, in all honesty, we quietly felt a little guilty for not having tried to plan the scope sufficiently in advance (Mistake No.1) - although we still put the blame for this squarely on our advisers (as most clients usually do!).

Mistake No.2: Think of the negative effect on the Firm’s debtor days as a result of this misunderstanding. The client’s paralysis (i.e. us in this case) in the face of this bill could have been avoided with some honest, upfront discussion and planning.

So after about 4 - 6 weeks we started getting chased for payment by the Firm. Enough is enough we thought, we’re going to have to thrash this out with them - so we called them out for a meeting. They duly trooped out, ashen-faced (partner and all) with a long list of names and hours and costs which totted up to our £’000’s total bill.

Reading through the long list of unfamiliar names who had reputedly worked on our project, we’d demand:

“Who is J Rogers?”

“That’s the capital duty specialist”

“Mmmh, I can see there were some technical points around capital duty. Okay, who is F Wilson?”

“That’s our Transfer Pricing specialist”

And the conversation went on and on in a similar vein, where our advisors responded in each case with valid reasoning. The explanations made sense, we obtained a better understanding of why it cost this much (based on issues that we, quite frankly, hadn’t event thought about). We ended up writing a cheque for the full amount there and then.

So why on earth had we ended up hammering their debtor days and wasting their chargeable time (sat in front of us there and then) simply to let us know why the bill was for the right amount?

Mistake No.3: Tell your client what is going on! Frequently, professional advisers quite rightly seek internal input from specialists because they are acutely aware of risks and potential technical pitfalls of which your client is completely clueless.

Now, reverse the tables and look at it from your client’s perspective - if they knew what you knew they would also seek input from relevant specialists. But the point is that they don’t know, unless you tell them! Do the obvious thing - speak to your client regularly throughout the project to let them know about the technical issues that you are seeking to overcome and how. This then builds an expectation in your client’s mind that this is no “boiler-plate” project that you have knocked out whilst eating your lunch - they then get used to the idea that it is going to be expensive as there is real value in this bespoke piece of advice.

Ideally, keep your client appraised of costs on a weekly basis (if it is labour intensive and you record time by the hour - preferably you would agree the fee in advance based on a value billing policy but that’s for another day!)

Key point: Don’t assume that your client understands the complexity of what you do. People (and therefore clients) naturally try to simplify matters if they don’t understand them (in many cases they ‘over-simplify’) and this is where a vital part of your role becomes communicating this complexity and the work that is required to overcome it to your clients - this can be even more important than the advisory report itself in terms of your client’s perception of the overall service delivery.

Avoid red faces on both sides by communicating, communicating, communicating. This takes practice but the impact upon client relationships, maximising fee income (incl avoiding discounts for disgruntled clients) and minimising debtor days can be staggering.

Here at Passionate Practice we train professional advisers on how to communicate effectively by implementing simple, easy to remember steps - and of course injecting plenty of passion in the process!

It is drummed into us that the professional services industry is all about:

Relationships
Relationships
Relationships

And that:

“It’s a people business”

Yet this fundamental point is still often overlooked by the majority of professionals in accountancy, law firms and other service firms (PSF’s). But why is it that we fail to pay proper attention to this fundamental factor in our personal and wider PSF growth and what’s the impact on client relationships and ultimately client revenues and profits?

This kicks off a series of short articles based on personal experience working as a professional in industry i.e. as a client, and the inside edge on the true impact of poor client relationships on PSF revenues plus simple steps that can be taken immediately by advisors and PSF’s to improve relationships and thereby maximise revenues and ultimately profits.

A bit of background

I worked within the Group HQ Finance function of a global trading group. Our advisors were primarily blue chip, top-tier firms across all disciplines. We were very successful and growing fast - as a result, high profile PSF’s were eager to work with us.

Like most companies, we had incumbent audit and tax advisors. Working within the finance function, the majority of my interaction was naturally with these guys, however, my observations and experiences could equally apply to other PSF’s.

Please be my friend

A twee statement I know, but with significant repercussions.

My relationship with our tax and audit guys was, at best, average. Very professional and business-like but quite cold. We would say “Hi” then talk business. In short, we were not ‘friends’.

So, what did this mean for our client / advisor relationship and profits for the Firm?

In actual fact, the absence of a friendship proved very costly for our advisors - but I don’t think they ever fully appreciated the extent of their lost opportunity cost…. In short, our business was growing fast so we had frequent high value transactional work where we needed external technical assistance - the sort of top-notch advisory work that would make most firms’ mouth-water!

So who did we give this work to?

The obvious answer would have been for me to pick-up the telephone to our incumbent audit and tax advisors to say something like:

“Hi Jonny, we are about to make an acquisition in France. Please can you come out to see us as soon as possible so that we can talk you through the latest and agree a scope plus terms of engagement etc. This looks like it could be an interesting and high profile project. It should be fun”

But no. We did not.

In reality, myself and the rest of the key decision-makers in the finance team would pass the work around all the blue chip firms. We were not loyal. We had no reason to be.

Why?

Because there was no relationship. We were simply not friends - not through want of trying on my part. Simple but true (and costly).

If I had felt any affinity with Jonny, like we knew each other well enough to go out for a coffee or beer (see below), then it might have felt strange not to have called him to offer him the work in the first instance (assuming his PSF had the necessary skills and resources to perform the task).

So how could Jonny have achieved ‘friend’ status?

Jonny simply needed to apply the Coffee Catch-up Code.

How?

Put simply, the Coffee Code is cracked (and work starts to flow) when an advisor reaches the position where he / she can call a client and ask for a chat over a coffee in a relaxed environment where both parties feel comfortable and at ease.

Ideally, there will be no urgent agenda or say, demands for outstanding information as the main purpose for the meeting; it is simply as an opportunity to catch-up and talk about the family; recent holidays; sports; common interests etc with a smattering of business updates and advice. It need only take half an hour say once a month (or less or more frequently depending on the size of the client account).

Anyone who has worked with top-level partners will have witnessed this approach - and most importantly, it wins work (and lots of it).

Many less experienced professionals actually operate contrary to this - believing (in good faith) that a heavily focused business packed with technical agenda points wins favour with most clients. Yawn, yawn…… caught like ‘a rabbit in the headlights’, the client freezes and feels more and more uncomfortable (and bored) as the advisor rants on rather than teasing out the client’s needs and issues through relaxed conversation. Believe me - I’ve felt like the rabbit!

But the Coffee Code approach is actually easier and less intensive than the formal, technical approach.

Just to pick up the phone and ask for a coffee with no fixed agenda. Just for a catch-up (and to build bonds). Simple yet powerful.

How do you reach the point where you can apply the Coffee Code?

Just imagine you are meeting or calling a client for the first time. The key is to focus on the ‘down-time’ in the client interaction (either on the telephone or in a face-to face meeting). The ‘down-time’ on a call is the beginning and end whilst the ‘down-time’ in a face-to-face meeting is similar but can be longer i.e. on the way to and from the meeting room in addition to the beginning and end of the meeting.

Although we refer to it as ‘down-time’ it can be the most valuable time of all - potentially more so than the content of the meeting itself. The idea is to establish a common ground between yourself and the client as soon as possible, for example, with simple open questions about the weekend, the journey to the meeting or anything else beyond business.

The key is then to listen carefully to the response. Listen out for reference to holiday destinations; whether they have children; what team they support; where they live etc. Ideally look for common interests and experiences e.g. “Staying at home to baby-sit the kids? Wow, that’ll be busy! - I have two kids, how old are yours?” / “My friends have been on holiday there, which resort did you stay at?” / “My relative lives near AnyTown too, he says it has a fantastic walk from x to y - have you attempted this?” etc

Then as soon as you have a quiet moment, make sure you discreetly write these important details down e.g. on the back of their business card, for future reference. The next time you speak to them, subtly bring them into conversation e.g. you could kick off a follow-up telephone conversation in the ‘down-time’ with a question such as “It was a lovely weekend, did you make it out on the water for a sail again this weekend?”.

Sounds a little strange out of context - but immensely powerful in practice. I have witnessed the failure to carry out these simple steps by my advisors (they never found out how many kids I have; where I like to frequent at the weekends; what teams I support; my interests etc after nearly two years of working with them - and it cost them dear). I am now acutely aware of their importance in my role as advisor and trainer today and the doors that these skills can open.

Aside from the unquestionable impact on PSF profits, making friends with clients also makes the day more pleasant - after all, we all need to speak to our clients most of the day so why not speak to friends at the same time.

Implement this change of mindset with your PSF teams today and experience the difference. I would be interested in your feedback.

Following on from our previous post: after one week of free downloads - the results so far are: 1.2m downloads and an average of $8 per album voluntarily paid.

That’s approximately $10m profit. Not bad - but it’s the following effects where the real value lies:

1. Happy customers (or clients) who have been given the liberty to pay what they think the album is worth to them - ‘value pricing’ at its finest
2. Enhanced customer / client loyalty to the brand which can only have been reinforced by this move
3. New customers /clients who will have joined the fold (at minimal cost - following this unique proposition)
4. An enviable client list that is now primed for purchasing more profitable additional services such as concerts and merchandising etc, or higher value advisory services (in the context of Professional Services Firms).

Even, in the unlikely event, that the free download opportunity had been abused by customers under the value pricing concept (which it clearly hadn’t as demonstrated by the above figures), it is the value of the resulting cross-selling opportunity that cannot be underestimated - and this all results from a well placed ‘value pricing’ proposition.

Passionate practice requires passionate pricing policies.

Think about it…..