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In this thought piece, I want to debunk one of the biggest misconceptions I see today about how to grow revenues and profits for professional service firms. The misconception goes like this: the marketing function generates leads, the sales or business development function closes leads and the delivery function delivers the work-product.
This is a classic assumption about how these teams work together to produce meaningful growth. But it’s dead wrong. It doesn’t work.
I call this model the triple flip. In other words, marketing generates a lead and flips it over the wall to sales. Sales closes a deal and flips it over the wall to the delivery team. The delivery team looks at the deal, realizes that it’s going to be incredibly painful to deliver against it and then flips off sales and marketing. That’s the triple flip. It is a recipe for failure.
There is a much better way of handling these three functions. What I’m about to describe will produce the triple win, not the triple flip. When you align marketing, sales and delivery around two key things – the promise and the equation – everyone wins. Service firms who create this alignment grow by leaps and bounds. Let me show you how to do this.
WHY THE TRIPLE FLIP FAILS
Here is the reason I’ve lost complete faith in the triple flip. It has failed us and our clients time and time again. My message to you is born out of great pain, anguish and tribulation. It is our job, at The Shattuck Group, to be a think-tank for figuring out what works and what doesn’t work in growing professional service firms. We have experimented with more strategies and tactics to grow service firms than any other organization I know of today. Here is what I’ve learned.
Over the last decade, virtually every professional service firm we’ve worked with that has realized success has avoided the triple flip. Virtually every firm we’ve worked with who buys-in to the notion of the triple flip has either faltered, struggled or outright failed.
If we had the chance to sit down together, I could tell you story after story of service organizations who tried the triple flip and failed. I could provide a litany of reasons about why the triple flip doesn’t work. Unfortunately, I don’t have room in this thought piece to tell you those stories, so you’ll just have to take me at my word.
The reason the triple flip doesn’t work is because, by default, it cannot produce the win-win-win outcomes that I described in my first thought piece on this topic – where the client wins, the sales person wins and the delivery team wins. The triple win accelerates growth and the triple flip stalls or eliminates growth. The triple flip produces lose-win-lose outcomes.
So if you want to grow your service firm, start with the assumption that you cannot simply generate leads, flip them to sales who closes them and then flips them to delivery.
KEY TAKE-AWAY: TO GROW YOUR SERVICE FIRM, YOU NEED TO ALIGN MARKETING, SALES & DELIVERY AROUND THE PROMISE AND THE EQUATION.
THE THREE TEAMS THAT IMPACT GROWTH
You’ll notice that I’ve been talking about three teams: marketing, sales or business development and delivery. Here is why I focus on these teams. These three, more than any other function, have the greatest ability to impact growth.
I provide more details about how to assess the efficacy of these three teams in an action guide I’ve developed called 7 STEPS TO DOUBLE SERVICE FIRM REVENUE. This free guide is a great resource if you want to double your revenues.
To consistently close deals and produce win-win-wins, you need 100% alignment around the promise and the equation among these three teams. In many instances, especially in smaller firms, these may not be separate teams. People will likely wear more than one hat. But to grow, you have to develop a clear delineation of responsibilities so the work can get done consistently and at a very high level.
The nature of selling professional services is promise. After all, services are intangibles. So the question you have to ask yourself is this. What does it take for a prospect to gain enough confidence, to move through those locks I described, to sign an agreement with your firm and begin to pay you – especially when they will get nothing tangible in return for their money? Why should they do this?
In our experience, prospects really don’t buy products or services. They buy a promise, a vision really, of outcomes that you can produce for them. So this raises a crucial question.
What promises are you making to prospects – before they become your client?
Maybe more important than this, however, is an even more challenging question. What promises are your marketing, sales and delivery teams making to prospects as those prospects move along the inbound journey? Here is why this question matters.
For your service firm to grow, there has to be absolute consistency across all three teams about the promises you make. Here is how I’ve come to describe this:
- The marketing function makes a promise that is meaningful to ideal clients.
- The sales function applies the promise to each new client opportunity.
- The delivery function delivers the promise made by the sales team.
This is how you realize exponential growth and accelerated movement through the sales funnel. If you want to fill prospects with confidence at each new lock in your canal to take them to their next level, you have to make meaningful promises at all points on the journey.
In a future thought piece, I’ll describe more about how to define your ideal client profile and make promises that are meaningful to them. The other important thing to note here is that you cannot simply make the promise. You also have to back it up with proof statements like case studies and testimonials.
If your organization is struggling with low close-rates or with deals that seem to take forever to close, I would wager that you have a promise problem. To fix this, you need to take three key steps:
- Build your ideal client profile and get clarity about their top goals, opportunities and challenges.
- Articulate a promise that speaks to your ideal clients’ top goals and make sure you can back it up with proof statements.
- Align your marketing, sales and delivery teams around that promise so everyone is on the same page and singing the same song.
KEY TAKE-AWAY: PROSPECTS DON’T BUY SERVICES – THEY BUY A PROMISE OF OUTCOMES.
The second key area to create alignment between marketing, sales and delivery teams is what I call the equation. I articulate the equation for service firms by asking a few questions:
- Who is our ideal client?
- How many ideal clients do we serve today?
- How many ideal clients are out there today that we could be serving?
- What is the delta between the number of clients we are serving today versus the number of prospective clients who are out there?
- How many ideal clients do we need to achieve our revenue goals?
- What is our strategy to pull that number of ideal clients into serious sales dialogue and how can we be confident in that strategy and refine it over time?
Let me give you a specific example of the equation. Let’s assume an IT consulting firm has identified credit unions in the US with more than 2 branches as their ideal client. This IT consulting firm wants to offer monthly managed services to decrease the cost of IT and increase security, performance and reliability. What might the equation look like for this firm?
- Let’s assume that they are serving 35 credit unions today.
- Let’s also assume that of the 6,400 credit unions in the US, only about 2,500 have 2 or more branches.
- This makes the delta between clients served and potential new clients 2,465 prospects.
- Let’s also assume that the management of the IT consulting firm has set a goal of serving 100 credit unions. If they achieve this, they will more than double their revenue and position for a very attractive liquidity event.
- This means the firm needs to acquire 65 new credit union clients.
Once the equation becomes clear, it can be quickly translated into a goal – acquire 65 new clients. Once the goal is clear, then the leaders of the marketing, sales and delivery teams can begin to work together collaboratively to build their strategies to acquire and serve these clients. What might that look like?
For the marketing leader, it could mean that they abandon broad-based brand awareness campaigns and instead focus on highly targeted campaigns. This also could mean that they partner with the sales leader at their firm to ask the question – who is on the decision-committee for credit unions and what do they care about?
For the sales leader this might mean that they acquire data from public sources. They might incorporate that data into a CRM that gives them the contact information for every potential decision-maker and decision-influencer in the 2,500 accounts they seek to penetrate.
For the delivery team leader, this might mean that they hire a recruiter to bring in the right talent to scale up over time. They might also work with the marketing and sales leaders to more closely define the managed service offerings that will be appealing to the 2,500 prospects the firm is targeting.
When we conduct our discovery process with prospective new clients, we interview leaders of marketing, sales and delivery teams and ask them about their goals. I’m listening to see if they understand and agree upon the equation. Here is what I’ve learned.
In 20 years of doing this, I have not encountered one firm where all three team leaders – marketing, sales and delivery – can consistently articulate the equation. So if they cannot articulate the equation, it only makes sense that they cannot define the strategy to achieve the equation.
If your organization is struggling to achieve your sales goals, I would wager that you have an equation problem. But this problem can absolutely be fixed with the right approach.
I believe that the vast majority of mid-size professional service firms can substantially grow their revenues. I believe they can accelerate prospects through the sales funnel and have very high close-rates. But to do this, they need to create alignment between marketing, sales and delivery teams around the promise and the equation.
If you’d like to learn more about how to do this, you can certainly wait for my next thought piece on this topic. Or you can get started right now by registering for my free action guide called 7 STEPS TO DOUBLE SERVICE FIRM REVENUE. If you do this, I know you will not be disappointed.
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