How can you attract the right clients and buyers?
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Market Proposition: View these slides to learn what you need to know to attract the right clients and buyers. Prospects, as well as potential buyers, need confidence that the benefits of using your services will overwhelmingly exceed the costs. Sounds obvious, right? Yet having worked with hundreds of professional services firms across the globe we have often found that they find it difficult to articulate clearly and simply exactly what their proposition is, why it is unique, and how it adds value. Learn how to build your own Unique Value Proposition, and why it is essential for your firm’s growth and for attracting potential buyers.
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How can you attract the right clients and buyers?
- 1. Confidential© Equiteq 2015 equiteq.com Growing equity, realizing value 8 Levers Webinar Series Market Proposition Webinar
- 2. Confidential© Equiteq 2015 equiteq.com Why should I buy from you?
- 3. Confidential© Equiteq 2015 equiteq.com 3 When we look at a consulting firm we use our Equity Growth Wheel Market Proposition Intellectual Property Quality of Fee Income Sales & Marketing Process Consultant Loyalty Client Relationships Sales & Profit Growth Management Quality Equity Growth Wheel
- 4. Confidential© Equiteq 2015 equiteq.com The importance to Prospects • A client is more likely to buy your services – and pay higher fees – if they can see a significant return on their investment and can understand the benefits you deliver The importance to Buyers: • Buyers are attracted by a focused set of propositions that deliver value and are aligned with a clearly defined set of client needs. • Such propositions are easily understood and drive up fee rates & volume 4 The Market Proposition lever answers the question, “Why should I buy from you?” Market Proposition Intellectual Property Quality of Fee Income Sales & Marketing Process Consultant Loyalty Client Relationships Sales & Profit Growth Management Quality Equity Growth Wheel
- 5. Confidential© Equiteq 2015 equiteq.com Your UVP will inform all of your marketing, and your web-site is your premier shop window 5 Examples of strong UVPs on web-sites • Whether it's maritime platforms, land equipment or aerospace, we help organisations: – Identify and prioritise key drivers of cost, quality and schedule adherence – Increase performance by 20% to 50% • Using our marketing automation and analytic solutions we help organisations gain real time intelligence with typical results: – 40% customer account increase – 3x increase in traffic – 135% increase in customers Examples of weak UVPs on web-sites • We add value to your IT strategic planning to create a tailored solution for your needs • We specialize in operational risk assessment… • We provide organizational consulting… • We’re experts at Market Intelligence…….
- 6. Confidential© Equiteq 2015 equiteq.com A compelling Unique Value Proposition contains three essential elements 6 1. What are the problems our clients face? • They don’t know what their business is worth • They don’t know how to find the best buyer • They don’t know what risk a buyer would see in their business 2. How do we solve these problems? • We provide a valuation for their business • We know the buyer community • We analyse the risks and help them plan a mitigation strategy 3. What are the benefits? • We get the best possible deals for our clients when they want to sell What problems do your clients face? How do you solve these problems? What are the benefits?
- 7. Confidential© Equiteq 2015 equiteq.com EXAMPLE: Capacitas have used their UVP as the basis for improving their web-site, creating a compelling video, and writing case studies 7 http://www.capacitas.co.uk/
- 8. Confidential© Equiteq 2015 equiteq.com For your Market Proposition homework try these Start, Stop, Continue strategies 8 Explain in three jargon-free sentences what you do, and the benefits you deliverStart Stop Continue Creating content which showcases the benefits of your services (e.g. videos, articles, case studies) Putting your technical expertise at the start of your sales messages
- 9. Confidential© Equiteq 2015 equiteq.com Please make use of our free thought leadership material 9
- 10. Confidential© Equiteq 2015 equiteq.com Growing equity, realizing value UK +44 (0)203 651 0600 USA +1 (212) 256 1120 Singapore +65 6352 7482 Email info@equiteq.com www.equiteq.com
Editor's Notes
- Paul: Hello & welcome to the first of 8 Webinars in a series covering each of the 8 levers in Equiteq’s Equity growth wheel. I’m Paul Beaumont, a Client Growth Director based in London and I’ll be your host. I’ll be speaking with Pat Webb, another of our Client Growth Directors, based in Vancouver. I’ll be asking her to give you some insights into what you need to know to attract the right clients for your services and, at the same time, the right type of acquirer for your firm. That’ll take about 20 minutes, then in the last 10 I’ll be putting your questions to her. Please post your questions using the control panel on the right hand side of the screen. The questions box appears towards the bottom
- So, Pat, perhaps you could begin by telling us what is the most important message about the Market Proposition lever. Hi Paul, hello everyone. If you can only remember one thing, please remember this - Your firm has to be able to answer the question ‘why should I buy from you?’ A prospect can buy from your or your competition, so why should they buy from you. How well the firm answers that question not only influences your sales and profits, but your equity value - what a buyer would be prepared to pay for your firm. That’s what this lever is all about. Whether and to what extent does your unique value proposition, or UVP, answer ‘why should I buy from you?’. Methodologies, approaches and even highly talented consultants; all that falls into the proposition element of a unique value proposition. That’s what you do, but no one really cares about that unless they understand how it benefits them. The implication of this is that you need to go through the work to discover, debate and communicate both externally and internally the benefits and results, the value element in your UVP. So the one thing to remember about the value proposition lever, Paul? To attract the right clients and buyers you have to be able to answer ‘why should I buy from you?’
- Paul: Ok, so let’s put that message in context. The picture here shows the Equiteq ‘8 Levers of equity value’. It represents one of our proprietary benchmarking tools which has been used in our M&A advisory work with almost 400 firms. It simulates how a buyer will evaluate your firm. The principles of equity growth and valuation in professional services firms are not always well understood by owners. Or by most M&A brokers for that matter. As owners, understanding these levers of equity growth is the most important route to building sales & profit and equity value. This is the way to unlock significant personal wealth at a liquidity event. A buyer interested in acquiring your firm will comb through your operations to establish the level of risk associated with buying you. He’ll want to know if he’s going to get a good enough return on his investment. Our benchmarking tool, which sits behind this wheel, asks all the operational questions a buyer would be interested in and, identifies those risks a buyer would find if he were to do exactly that. The tool allows us to analyse the answers and produce a prioritised set of actions that you can take to mitigate those risks and enhance the value of your firm. So, if that’s an overview of the Equity Growth wheel, can you give us a specific look at the market proposition lever Pat?
- Pat: Certainly. Let me build on the message I started with – that the Unique Value Proposition has to answer the question – why should I buy from you? I’d like to illustrate this with a quick story. Young MBA consultants are often referred to Green Beans in consulting firms, maybe because they slice and dice so much data! In Equiteq we have a fantastic group of Green Beans and I’m conscious they’re carrying student debt to pay off those MBA’s so I try to help them out, with some cash. When I work with a new client I start with an internal meeting with our Green Beans to familiarise everyone with the client. I offer a quid, a couple of bucks, if, just by looking at the client’s website they can tell me in less than 60 seconds ‘why should a prospect buy from them’. Now I love our Green Beans and I want to help them out, so I really regret that it’s a rare event that I have to pay up! Most of the time they’re forced to admit defeat and the best they can come up with is that the firm offers something to do with IT services, or leadership development, or strategy, but a depressing number of times they say they’re just bewildered. I give them 60 seconds. According to HubSpot, 55% of visitors spend less than 15 seconds on your website. A prospect wants clear evidence of the sector you’re in, that you understand their problem, that the clients you work with include their kind of organisation, and the all important expectation of the ways they could benefit. In what way will their business be improved; more sales, lower costs, faster cycle times, bigger market share? You need to spell it out, because in less than 15 seconds, they’re gone. Same thing when you take your firm to market. After financial stability buyers are looking for deep domain expertise, unique and leverage-able IP, and they want to find firms which are highly differentiated with a tight geographical focus. The reason they care about this is - the more unique, compelling and targeted your value proposition, the better you can demonstrate that your firm can win more market attention than your competitors. The more value you deliver, the higher your fees. For a buyer, if you’re in the ‘me too’ zone, and that’s especially true when you just sell your competency, rather than the benefits. Then the risk to future profits is higher, because you have to fight harder for business to maintain your market share. If you remember I mentioned right at the beginning that Leadership teams have to go through the work to discover, debate and communicate both externally and internally the value element in their UVP. Let me unpack what I mean by doing the internal work. Quality firms with a strong ‘unique value proposition’ have robust processes around such things as market research, competitor analysis and win/loss reviews. It also means that they have the internal process to deliver what the client expects. We’ll talk more about this in the coming webinars, but it means the IP is codified, the sales & marketing pipeline is managed, the account plans are in place, the bench strength is matched to demand. Having a clear value proposition is a lot more than hype on your website. It helps you attract and retain the clients you seek. And it helps you stand out in the crowd when a buyer is hunting for a firm like yours!
- Paul: Can you explain then exactly how a UVP helps you stand out from the crowd? It seems really obvious, so why is it so hard to do? Pat: Let me draw your attention to the headline on this slide. Your UVP informs all your marketing, and your website is your premier shop window. Now before I get into the examples I just want to introduce the difference between inbound and outbound marketing. Imagine you’re fishing for tuna. Outbound marketing is when you get a harpoon and ignore anything that’s not a tuna. Examples are things like email blasts to tuna companies and going to speak at conferences full of tuna. Inbound marketing is when you drag a net through the ocean. Examples of inbound marketing include things like websites and social media; you’re going to get cod and other fish as well as the odd stinky boot! You therefore need to be very attractive to gain the attention of the prized tuna! Whether responding to inbound or outbound marketing, the tuna is going to land on your website so that’s why I’m going to give you some examples and strong UVP’s from websites. Oh, and there’s the usual disclaimer that these are amalgams and are not accurate reflections of any persons living or dead just in case you think you recognise your firm! On the left, the first example “ we add value to your IT strategic planning to create a tailed solution for your needs. Remembering that both prospects and potential buyers are looking for firms who are differentiated, so not ‘me too’ kind of firms, it’s hard to know how this firm is unique The other 3 examples on the left share a very common problem - it talks about what they do; it’s a laundry list of competencies, it doesn’t highlight in what way a prospects organisation would be improved. What’s the results, the benefits, the value. By comparison, the firms on the right spell out what the benefits are as well as articulating their proposition. The last example on the right is particularly strong. ‘Using our marketing automation & analytic solutions we help organisations gain real time intelligence’, and then they list typical results. Paul: I can see how you would quantify benefits when a firm provides a very technical offering (say an IT or an engineering consultancy), but it’s not always that easy. I mean, how do you calculate value in, say, the Human capital sector? Pat: in many ways, it’s more of an issue. I work in this sector a lot and owners often talk about the struggle to articulate measureable results. How do you measure the measurable value of executive coaching or organisational design services or training? Like many people I’m a fan of Jim Collins of ‘Good to Great’ fame. He’s got a neat little companion book for social sectors where he has some wonderful examples of how organisations can create measures of value outside of financial returns like fewer costs or more profits. He cites an example of The Cleveland Orchestra which in 1987 was facing deficits, a small and stagnant endowment & a struggling local economy. They attracted Tom Morris as the executive director and asked him to make a great orchestra even greater, defined by artistic excellence. I think you see the problem, how do you measure that? So Morris and his team set about defining what’s meant by great results? And they started to track a variety of indicators; were they getting more standing ovations, were they invited to the most prestigious festivals in Europe, did composers increasingly seek to have their work debuted at Cleveland? Under Tom Morris’s leadership, the orchestra tripled their endowment and funded a remodel of Severance Hall into one of the best music halls anywhere. So in your firm, as I mentioned at the beginning, do the work to find metrics which you can use to measure the impact of using your services. The consulting approach typically begins with some kind of baseline; a diagnostic of where the client is now. Based on that there’s a plan for remediation and often implementation services. Just like the Cleveland Orchestra find appropriate measures. For the example in the Human Capital space maybe they could assess how quickly are executives being promoted currently, what level of confidence does the Board have in their ability to lead, what level of engagement do they produce in their direct reports. Measure the baseline, measure the improvement, then communicate it. That’s the value component of the UVP. Paul: So, how do you go about creating a UVP?
- Pat: A compelling Unique Value Proposition contains three essential elements, and just to be clear this isn’t just about websites. We’re panning the camera back to the overarching UVP for the firm. The three essential elements are: what problems do your clients face; how do you solve these problems; and what are the benefits? Paul, why don’t you describe how Equiteq answers these questions? Paul. First, understand the problems your clients face, and I mean really understand them. Our clients Don’t know what their firm is worth, how to find the best buyer, and they don’t know what risk a buyer would see in their firm. The second step is to articulate how you solve those problems, which for Equiteq means having a set offferings tightly aligned with the pain points: We provide a valuation, we know the buyer community very well, and we analyse the risks and help firms plan a mitigation strategy. What are the benefits, for us it means we get the best possible deal for our clients when they want to sell. Pat. That’s great. Let me tell you a quick story from outside the consulting sector which might help underline the point about having a great overarching market proposition for the firm. It’s purpose is to help you attract the right clients. Some friends in Minnesota sent me a parcel of treats for my birthday– it was packed with local produce including my absolute favourite, a bag of cranberry apple granola breakfast cereal. Here’s the part that I loved – It’s called Crapola and written right underneath the name was their strapline – “Keeps even weird people regular”! I went straight to their website and I wasn’t there for 15 seconds. I was completely drawn in reading all about this young couple with the organic farm, and of course I now have a regular supply shipped to Vancouver. Now that’s was a bit of a fun digression, but it underscores a very serious point. Whether as an individual shopping for granola, or an organisation shopping for professional services we’re searching for firms in a crowded market place looking for the one that stands out, that demonstrates they understand our issues and have evidence that there’s a benefit which far outweighs the costs.
- Paul: before we take some of your questions, we’d like to point you in the direction of an organisation we’re working with in the UK where we’ve been helping them to describe their Market Proposition. This is an IT company that does some very specialised, niche work, right down in the details of optimising server capacity and performance. It’s highly complex and very technical, and, to be honest, you have to be a real specialist to understand what they do and how it works. Now, as a consequence of the work they do, they often deliver outstanding business benefit and they have created a fabulous video for their website which focuses on the benefits message. This is a superb example of how to clearly convey the benefits of a service without getting bogged down in the technical detail. It makes you want to know more. I recommend going to their site and watching the video – it takes less than 2 minutes. If you have a look at the right hand side of this slide, you’ll see that their case studies too have a similar emphasis, identifying the problems they have helped their clients solve and the tangible benefits they have delivered. Their whole marketing effort has been informed by their Unique Value Proposition. OK, let’s now move to the last part of this webinar. Thank you to those of you who have sent in questions. We’re going to try now to answer as many of them as possible…
- Pat: Here’s some things we’d encourage you to do going forward: Start: Sit down with your kid or your Mum (or a Green Bean!) and see if you can explain in three jargon free sentences what you do and the benefits you deliver Stop: please don’t showcase a laundry list of competencies Continue: Creating marketing collateral that describes the benefits you deliver!