Consumers. Buyers. Clients. Users. Customers. You want ‘em, you need ‘em! and it doesn’t matter what kind of business you own.  Or does it? Marketing services based businesses can be a tricky task. 

Identifying and marketing to your consumers

is both formulaic and highly individual,

because what you’re marketing makes all the difference.

In other words, if you’re a product based firm or a services based firm, your marketing efforts will certainly have some similarities but marketing to each of these audiences will also have their own needs.

Let’s first start with definitions.  

Product based firm – you’re an organization with a solid, tangible product to offer its customers:  you can package it and put it on a “shelf.” Marketing is pretty easy – you might even say it’s “textbook” (taught in every marketing class across the country).

Services based firm – an organization that has people as its primary offering, i.e. a process or an expertise.  And since you can’t package people or put a process on a shelf, you have to market differently. 

A bit of both – Sometimes you’re some sort of hybrid between a products business and services firm.  Maybe you sell a product and offer services to back up that product.  Maybe you offer services with some ancillary products.  Whatever your mix of products and services, your marketing efforts will have to vary depending on your target market for each.

Who says it best?

So let’s get down to business and start marketing.   

When you’re marketing a product, you let your product speak for itself, tell its own story of how buying the product will solve the customers’ problems.  You can do things like show your product in action - think cars careening down the highway or a newly cleaned floor.

With marketing services based businesses, it’s a bit different.  Yet still much the same.

Like products, services solve problems.  Marketing your services business will still show problems being solved but as told by the current clients of your services: as the old adage says, people buy from people.  Think of a company like “Angie’s List” which sells services of professionals as told by the users of those services.  With services, your biggest marketing tool is your clients.  In services, you can’t parade your product for your potential customers, but you can show those who have successfully used your services. 

Client Feedback Tool. The key to marketing services based businesses.

But how do you know the stories of your clients?  You ask them.  And in the services world, your best friend is client surveys, specifically, a Client Feedback Tool which companies like Full Sail Partners use to periodically and regularly gather information from clients about engagements.

Sometimes customers need a voice (other than just talking with a project manager) through which to offer their feedback.  A Client Feedback Tool offers survey questions which your clients can use to offer their thoughts on the engagement:  these can either be constructive points as to areas for improvement or compliments on the engagement which are really helping their work lives.  And, with the right marketing professional, both can be used to your services business’ advantage, because once you know how your customers are feeling, you can take action.  In marketing, no news is not necessarily good news; the more information you are armed with, the better marketing can do its job.

Never underestimate the value of retention

Marketing your services business is a bit different but can be better once you find your audience because of one word – RETENTION.  If you have happy customers, not only can they contribute to your marketing efforts, but keeping these same happy customers is the real boon to your bottom line.  According to Forbes.com “Five Customer Retention Tips for Entrepreneurs” 

For those who feel that customer retention plays a relatively minor role in helping a company grow a healthy bottom line, here are a few statistics you might be interested in. According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%. And if those numbers don’t impress you, Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers. Still not sold on customer retention? One final statistic provided by Lee Resource Inc. should give you plenty to think about: Attracting new customers will cost your company 5 times more than keeping an existing customer.   

When it comes to marketing services based businesses, happy clients are your secret weapon

Marketing your services business requires some tweaks to your marketing that differ slightly from product businesses.  Your chief marketing tool is your current customers as they proselytize your message.  Not only are they reaching new customers, but if they are happy enough to share your good work, it looks like you will have a long-term relationship making your bottom line even that much happier. 

Yes, it may be a bit daunting to come up with different marketing styles for your potentially varied target audiences. To accomplish this, check out the Client Feedback Tool - a tool designed to help you target your marketing efforts.

 

 

Like the beloved Sesame Street Count Von Count character, your project accounting should be just as obsessive about tracking numbers – project management numbers that is.  Many companies are very good about ensuring that their general accounting functions (things like their A/P and A/R balances, for example) are consistently maintained and reported to those who need this data.  But when it comes to project accounting, too many companies fall short.  

But first – what is project accounting?

Let’s start by comparing it to standard accounting, which most of us know.  Standard accounting manages the financials using a company’s organizational structure – how divisions or departments are tracking (like their G&A, labor, etc.) compared to their budgeted amounts on a periodic basis.  For those who embrace their arithmomania (a compulsive love of counting) and for those companies where growth is a key component of their future, there is another layer which is a must.  Project accounting looks closely at the projects a company has undertaken most of which regularly cross departments and might last months or even years. 

Let’s say, for example, company X wants to undergo a new green initiative in their office.  Our standard accounting will keep good track of costs for things like the smart electronics to manage lighting and HVAC or the newly hired “Green Officer.”  What standard accounting doesn’t do is manage the costs for the actual project, i.e. how much did it cost you to achieve your final goal.  Things like:

• The project manager’s time to create and manage the project plan: the work breakdown structure and project hierarchies.
• Were deadlines met?  If not, what the cost of missing those deadlines?  If so, how did meeting those deadlines translate into cost savings?
• How is percentage of completion managed and tracked to budget?
• What long or short-term investments will need to be managed on an on-going basis once this project is complete? 

But let’s take this a step further.  Let’s say you need to perform a customer project – you’re going to implement that same green initiative in your customer’s office.  You probably have access to someone who is really good at estimating the costs of a project, so you have this first step covered.  You may not, though, have a good system for tracking those project costs to the actual costs which means for the entire project, you’re working with blinders and hoping that at end of the project, you’re not bankrupt.  That’s where a good project accounting system will save you.  Forbes.com contributor, Bill Connerly’s piece, “Businesses Lose Money From Bad Accounting,” says he’s surprised at “how many businesses do not know the profitability of each customer or project or order they have. For instance, a sign company could not tell … how much it cost them for a particular job they undertook. Their financial statements told them whether the entire business made money in the month” or not but there was no accounting in place to determine to which project the gain or loss was attributed.

Now, SOLUTIONS, please.

When you’re a small company doing your best to manage your business day-to-day, a smaller accounting solution, like Quick Books, serves your needs … for a while.  J. Carlton Collins, CPA details those limitations in his piece “Practical Advice for Companies That Have Outgrown QuickBooks” (http://www.iyoungland.com/_pdfs/outgrown_quickbooks.pdf)

QuickBooks has two basic limitations:

• Limited accounting system features

• Limited database performance 

If you run a smaller operation, these product characteristics are actually appealing … If your organization is rapidly expanding, however, you will eventually outgrow the QuickBooks feature set and database performance … growing companies often find they need more sophisticated features that aren’t offered by QuickBooks.

And therein lies the rub.  Growth.

For companies who have “growth” as part of their future – and “growth” can be defined any number of ways like increase in revenues, employees or customers, higher profits, greater market share, etc. – they will outgrow these types of small accounting solutions and have to take the leap to accounting sophistication by finding a solution that manages both their standard accounting as well as their project accounting.  

But before you take that leap alone, let’s get you a partner.  As much as we all love Count Von Count, you should look to a partner who is just as obsessive about numbers, but without the funny accent.  Your friends at Full Sail Partners are just what the Count ordered.  Take, for example, this piece by Mark Lovstrom with Full Sail.  He writes that growth is a KPI which should be analyzed with “a project KPI dashboard [that] can examine some simple indicators [to] allow a project manager to gauge which project(s) need more attention.”  He goes on to list those items which should be closely examined in order to manage your project costs.  Things like:

• Accounts Receivable
• Unbilled Labor
• Estimated to Complete (ETC) and/or Estimate at Completion (EAC) 

In the end, we are all working toward success for our business.  And to most of us, success means growth which then means managing every minute and every dollar – through project accounting – to achieve your success.  Click to view this webinar by Full Sail Partners to learn more about how your particular style of growth can be achieved. 

Count Von Count and all his Sesame Street friends will be proud of how much your project accounting has allowed your business to grow!

Achieving consistent project profitability while maintaining strong client relationships is at the top of most firms’ goals and objectives. And, while there are certainly a number of variables that must be integrated to make this happen, asking your clients for feedback during the project plays a valuable role. I’ve identified two scenarios that are common in the A/E industry. Incorporating feedback into your project management process has been demonstrated to have a positive impact on both.

Reduce (or eliminate) Re-work

Streamlining the project delivery process is essential to creating project efficiencies that lead to increased profit on your job. But there are pitfalls to this approach unless you are getting regular project feedback from your clients. Let’s look at a scenario:

You have done projects for one of your best clients for more than 10 years. You have developed a delivery process that seems to be working for them and it eliminates the need for your team to reinvent the wheel each time. Enter the new client project manager. This individual has their own set of expectations regarding how this project will proceed. And, although you all believe you were aligned when you left the kick-off meeting, suddenly there are 10 pages of comments to your first major submittal. They don’t like the format, they feel you have left out critical information, and generally they are looking for you to fix the problem which will require some significant re-work on your team’s part.

How could project feedback have avoided this outcome? Firms that have integrated gathering feedback into their project management process understand the importance of requesting feedback after each milestone meeting or deliverable. In this scenario, a feedback request would have been sent after the initial meeting perhaps after the submission of the meeting minutes. This would give the project manager the opportunity to uncover gaps in expectations with this new project manager. Before his team began to move forward on the project, these gaps can be closed. In this scenario this would have meant deviating from the streamlined process at least a little, but that knowledge and flexibility would save many hours of re-work that kills a project budget.

Avoid Scope Creep

Scope creep is something most A/E firms understand all too well. You know what is needed to complete the project but the client is extremely cost conscious and asks you to remove several items to lower your fee. Depending upon the experience of the project manager involved, they may be able to complete the project to the client’s satisfaction. However, doing so will quite likely result in a lower profitability for your project. Let’s look at a scenario:

You have been asked to design a renovation for a commercial building for a new client. This type of work is your specialty. You know all of the elements that will be needed to meet your client’s expectations for a successful project. However, when the client asks you to remove about 5% – 10% of the scope so that your fee will fit into their budget, you agree because this is a client that you really want to work with and your staff is a little light on work at the moment as well. As the project progresses, you run into problems because of the scope you removed and the client ‘forgets’ they asked you to remove these items and asks you to do what is needed to complete the project. Rather than ask your client for an increase in fee, you just finish the project with the fee you have been given. This involves both you and your team working extra hours and your profit still takes a hit.

How could project feedback have avoided this outcome? Because this is a new client let’s assume that the opportunities to use feedback to avoid the fee reduction in the first place are limited. Requesting feedback from your client throughout the lifecycle of the project however, can play a significant role when the scope items you removed come back into play. Each time you send a feedback request to this client you are giving them the opportunity to let you know how well you efforts are matching their expectations. You are building the relationship with them that lets them know that you value your relationship with them and it is your goal to ensure the project outcome meets or exceeds their expectations. When the moment comes that the scope items you agreed to remove become essential to the project, this relationship will make the conversation to request additional fees more comfortable for both of you.

Interested in learning more about using project feedback to increase profits?
 

Each of your clients, like you, are individuals that have a unique definition for what a positive client service experience means to them. We can no longer treat everyone the same way – it just doesn’t work!  Sending client surveys gives your firm the opportunity to ask clients what that terrific experience looks like to them – each of them. It also gives you the chance to show that your firm is serious about their satisfaction and to build stronger relationships. As a result of the thousands of survey results and comments we’ve seen, we wanted to share with you the top 3 reasons clients want you to send them a client survey.

1. Ease or Dis-ease: Your clients want to be at ease in their relationship with you. They hired your firm in the first place because they believed you could provide them with something they needed. So what happens when something is not exactly right? We all know that tension we feel when some relationship we have is not flowing smoothly. Your clients feel the same way. When you send them a client survey and give them the chance to let you know that something could be a little better, it creates a greater sense of ease for them because you gave them a voice. 

2. Build Trust: Trust is a funny thing, it takes time to build and usually involves both positive (and negative) interactions. We all want to be seen as ‘an expert’ for our clients and sometimes may think this means that there are never any miss-steps or misunderstandings. Clients understand that nobody is perfect – what they are looking for is corrective action when something has not gone as expected. The interactions you have with your clients often have consequences you may not even be aware of – how they look to their team, their boss, maybe their clients. When you send a client survey and follow up in a timely manner, your clients grow in their trust that you will handle situations in a positive, professional manner. 

3. Creates Affirmation: Everybody wants to be appreciated and acknowledged. In fact it is such a basic human need, that we hear and read about client appreciation and satisfaction in a great many marketing materials. The reality is however, that more times than not, these are empty words and there are no actions behind the words.  When you send a client survey and follow up, your actions, not just your words, tell your client that you value them, their input, and their satisfaction. That is a very powerful message.

At its most basic level, the practice of benchmarking provides perspective into why some companies perform better than others. As a result, it helps business leaders find and exploit opportunities for improving operations and results. 

Another aspect of the importance of benchmarking is that it can stamp out incorrect assumptions that lead to complacency. For example, for some business owners, the easy (and convenient) takeaway from the recent Great Recession is that its pain was spread more or less evenly within each industry sector. 

The problem is, this often wasn’t the case. In fact, in almost every sector you examine, there was a small group of firms that made it through the recession in better shape than their peers, as measured by the most relevant metrics. 

Was it just luck, or were they doing things differently? This is where effective benchmarking can really pay off. 

How to get started

A good place to begin is understanding the most relevant key performance indicators (KPIs) in one’s industry. For example, our work with clients in project-based industries has put a spotlight on the importance of benchmarking such metrics as: 

• Utilization Rate
• Net Labor Multiplier
• Operating Profit
• Current Ratio
• Employee Turnover
• And various others 

The next step is to systematically track and monitor these KPIs. Hopefully, you’re already doing this; but if not, there are a number of financial/accounting software packages that can do so. (At Full Sail Partners, we offer an alternative solution that tracks this data: Deltek Vision. It also streamlines project management, improves visibility throughout the project life cycle, and … okay, that’s a topic for another blog!) 

Finding a good yardstick

Once you have sufficient data on your KPIs, the next step is to find external data to compare it to. This is not easy or simple — but still very doable. 

Of course, one solution is to hire a consultant to analyze the relevant competitors and metrics. But a far less expensive approach is to find the data you need on the web — preferably in the form of third-party studies of your industry. 

As a case in point, Deltek publishes an annual performance study of firms in the architecture and engineering field that examines all of the most relevant KPIs for that industry. More importantly, the study mines through the data to isolate some very interesting differences between the highest performing firms and the rest. 

Among other observations, the most recent study found that overhead and utilization rates were basically the same at all the firms studied. But the high performing firms were unique in sharing several key characteristics, including that they had improved efficiencies in their project lifecycle and had developed a defined set of company standards. 

Other types of freely available studies can inform the benchmarking process as well. For instance, the marketing firm Hinge has produced a series of reports that examine high-growth firms in a variety of professional services industries. Like the Deltek study, Hinge’s study found interesting lessons in how the most successful firms are doing things differently. It also exploded some myths along the way — like the widely-held belief that a tendency toward high growth among certain smaller firms is a statistical fluke. 

The key is, do a little digging, and you can readily find some metrics of the top-performing firms to compare your firm to — and more importantly, take lessons from. 

Add benchmarking to your management mix

Of course, the importance of benchmarking is not that it’s a silver bullet for growth. It’s more of a management philosophy and commitment that emphasizes keeping an eye on the most important KPIs within one’s firm and industry, finding meaningful comparisons among top-performing competitors, and adopting proven strategies for improving growth and financial performance.

Interested to learn how Professional Services firms position themselves for future growth and meet the challenges of potential ownership transitions? Read expert opinions from Deltek, Rusk O’Brien Gido + Partners and DiCicco Gulman and Company (DCG).  

A successful project doesn’t come easy, but it isn’t exactly rocket surgery. Below we’ve outlined six keys to project success to help your staff know where to focus their energy.

1. Plan

Clearly identify and confirm the objectives of the project with your client before you start. A plan will keep you from veering off track and save you from many problems if and when scope creep occurs.  Effective planning enables you to meet the client’s schedule and budget requirements, or work through them together for a win-win outcome.

2. Engage

Both staff and clients have to be engaged in the process in order maximize project success. According to Ed Boyle, Global Practice Leader at Gallup, engagement increases performance-related business outcomes by 240%.

3. Measure

The concept of measuring in order to improve is not just a management catch phrase, it’s scientifically validated. The only way you’ll know how a project is going (or know how to make it go better) is to measure. We’re not suggesting you measure EVERYTHING, but do review your goals and start looking at metrics that can help you meet those goals.  Measuring your clients perception of the project success, during the project, is critical to promoting their goals.

4. Adapt

To adapt means to make things fit, usually by modifying a process or way of thinking. Great project teams are skilled at adapting – having the ability to alter the way they practice or the way they think to increase the likelihood of project success. And these don’t have to be large or dramatic changes; they can be subtle changes, like checking voice mails more often. These small changes can affect the outcome of our projects in a big way, but require understanding the client in order to adapt appropriately.

5. Evaluate

Measuring throughout the project is crucial, just as important as creating a comprehensive evaluation at the end of the project. Taking time to evaluate may seem secondary compared to the primary efforts of executing the project, but don’t get too busy chopping wood that you never sharpen the ax.  Talk to your clients - every project can teach us valuable lessons about how to improve both now and on the next project.

6. Recognize

Our basic human need for meaning applies to work life.  We all feel our contributions are most meaningful when recognized for a job well done. If your staff feels they have a means to be recognized, they will work even more effectively, further contributing to project success. 

Achieving predicable outcomes can be easy if you take a moment to find out from the project team what’s working, what isn’t, and respond accordingly.  Obtaining feedback directly from clients is one of the easiest ways to assure project success.

Checkout more about the benefits of feedback.