Three Growth Strategies for Professional Services Firms
Times have changed and making money in a professional services business is harder than it used to be. It requires a more defined strategy, a focus on better client relationships, highly motivated and skilled people, and being able to do more with less. Many firms are just surviving now, with reduced profit margins and more competition on every bid. The following are three growth strategies for professional services firms to help you adjust to the new reality of doing business in the post-recession world.
Know Who You Are
The best consulting firms have a specific strategy and a well-defined set of niche services. They know that they cannot be all things to all people, and quickly identify when to turn away an opportunity because it is not a good fit. This will also save money on marketing, and ensure that your marketing dollars are spent more effectively by reaching out to a smaller audience. This will also allow you to hire employees with highly specialized skills and expertise.
Lee W. Frederiksen, Ph.D., author and managing partner of Hinge Marketing in Herndon, VA, provides some excellent advice for professional services firms trying to figure out how to determine where to focus their marketing efforts:
One of the most common strategic mistakes that we see professional services firms make is to target their marketing and business development efforts too broadly. There is a very human reaction to try to offer as many services as possible to as broad an array of potential clients as possible. The emotion is fear of turning away any potential client.
In reality the research we have conducted on hundreds of firms clearly shows the opposite. The more narrowly you target your services and the deeper you understand your industry, the greater the likelihood that you will grow faster and remain profitable. Clients prefer a specialist who understands their industry in depth and has solved similar problems many times before. With the rise of the internet, geographic proximity is becoming less important and specific knowledge and experience is becoming more important. Of course there are limits. You must target a niche where there is sufficient business and your expertise must be real. But narrow and deep almost always wins over broad and shallow.
Your firm is selling people’s time for a living and one way to keep costs down is to leverage technology to save them time and make their jobs easier. Having an integrated ERP system can reduce wasted time from creating spreadsheets, looking for information, entering data in multiple systems, and providing one source of accurate data for your firm. Amazing efficiencies can be gained by improving systems rather than adding more administrative people to solve problems. It is also much less expensive.
Aberdeen’s November 2011, ERP in Professional Services: Managing Costs When People are the Product report found that 73% of leading professional service organizations are using ERP compared with 60% of followers.
Professional Services Implementing ERP
(Source: Nick Castellina, Research Analyst, Enterprise Applications, Aberdeen Group, www.Aberdeen.com)
Learn About Inbound Marketing
We now live in a world driven by social media. Buyers do not purchase services the same way that they did a few years ago. They look for expertise on the internet, and want to work with thought leaders that are proven to solve the kinds of problems they are trying to solve. They look for this proof by evaluating online reviews, and reading blog articles written by experts.
If your firm wants to stand out from the crowd, and gain the expert status needed to attract new clients, you need to be online and developing valuable content that your clients will want to read. Marketing has changed dramatically in the last few years, and the old-school methods of newsletters and direct mail are no longer relevant.
I recommend that you hire a good marketing adviser that can help you build an effective Web site, and optimize your site and your content for site engines like Google and Bing. You should also make sure that you are using LinkedIn and Twitter effectively, and build a following in your target markets.
The New Rules
Competing in today’s world requires change. It demands out-of-the-box thinking, and the ability to solve your clients’ problems in a way that saves them money. Your messages need to be clear, and you have to work hard at getting them in front of the people you want to do business with.
Yes, times have changed, and those professional services firms that have the courage and commitment to change their strategy, systems and approach will rise to the top over their competition.
Talk to a Pro
Schedule a call with June Jewell, CPA, author of Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering and Environmental Firms.
Discover where your dollars may be hiding and how to stop the leaks in profitability we’ve seen in almost 30 years of working with A&E firms. June will work closely with you to gather information about your firm. During the 30 minute complimentary consultation you will:
- Uncover the three main areas where you are leaking profits
- Evaluate the financial impact of improving your people, processes and systems
- Walk away with a preliminary action plan to find your lost dollars
We have found that many small changes can make a dramatic difference. Let us help you figure out where to start!
Cash is King Webinar
Managing Cash Flow in a Down Economy
Date: Wednesday, August 19th, 12:00pm ET
The average days to collect cash in the AEC industry is between 60 to 120 days. In this web training we will examine the complete project lifecycle to understand how cash flow can be increased when the economy is uncertain. Participants will gain valuable tips to improve cash flow by improving timesheet practices, reducing the billing cycle, and improving client relationships and collection practices.
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