Over the last two blogs, we've looked at how to package your firm by creating a stronger and more attractive client value proposition; and how to position your firm so that the message gets to the people you really want to be your clients.
Now we get to the heart of the matter. If you are going to invest all of that time, money and effort into packaging and positioning your firm, how can you make sure all of the investment actually delivers a tangible financial return?
Although it may sound strange, I'd like to start by looking at the other end of the scale – if you haven't packaged your firm and created a viable client proposition and are still trying to be all things to all men market position-wise, where are you?
My suggestion would be you could very well find yourself in a dangerous marketing hinterland where you are working supremely hard to keep your head above water and be heard in an increasingly competitive marketplace. More worryingly, it is also likely you are being compared to everyone else in your marketplace as ‘just another firm' that is judged on price, location and availability.
While it might sound harsh, the only outcome of using that particular combination will be that your fee levels will be pushed down, your profitability will be eroded and you could very well be placing some of your most prized assets (your clients) within the grasp of your competitors.
However, having painted the very worst picture (and I have to say that for once I'm not exaggerating to make a point … OK, maybe a bit), let's look at the three key positive effects that packaging and positioning will have on the profitability of your firm:
1. Your fee levels will harden
People will always pay a premium for what they really want and what suits them best.
If you can package and positon your offering (i.e. your technical experience, your approach and your service levels) in a way that is totally in line with your preferred clients' expectations, you will no longer just be a commodity, you will be able to support a premium rate.
You will also be perfectly equipped to defend your rates when a client asks "how much?". I will say now that premium pricing may still put some clients off, but that takes us perfectly to the second benefit...
2. Your cash collection will improve
Because people will know exactly what they are paying for and why, they will settle their bills more quickly and the instances of haggling after the event will also decrease drastically. This will contribute to a healthier financial position as the likelihood of having to reduce bills or even write fees off entirely will decline.
It will also reduce the amount of time fee earners spend chasing ‘tyre kickers' and lost causes, which will again impact positively on their billable time and therefore, their profitability.
3. You will become a first choice across the board
Once you prove you are the right fit for a client, why would they go anywhere else for any other type of work? This makes it easier to cross-sell other practice areas and to keep the relationship going between matters by providing value adds like training, updates or even introductions to other clients or contacts so that you stay perfectly positioned for the next piece of work. Just as importantly, that fit will also position you perfectly for any referrals your clients could make.
While these new matters and referrals will obviously bring in new revenue to improve your top line, they'll also improve your bottom line – your profitability – because there is almost no associated cost of sale!
I am more than aware that when you – as a marketing or business development professional – are talking to some of your partners about things like packaging, propositions and positioning, the shutters can come down as these senior executives file your supplications under ‘marketing mumbo jumbo'.
However, I can also tell you from experience that when you start to frame your advice as a means to achieving harder fee levels, improved cash collection and a greater likelihood of selling more services to the same clients over a longer life-time, your path to getting them to agree to what needs to be done to build your firm into a more credible and more attractive product may just become that little bit easier.
This is the final blog in this three-part blog series.