Give Prospects a Reason to Buy
Sales prospects are generally risk averse and constantly on the lookout for opportunities to maximize rate on return (ROI) with minimal investment, but buyers are also human beings, and they can recognize a well-managed and competent organization when they see one. And they’re often willing to pay a premium for its services.
So think about how a new prospect interacts with your firm—from ini-
tial contact to signing up for services—and consider whether you’d do business with your firm if you were he or she. Would you be able to readily identify your organization’s value proposition or how you are different from the competition? Does every interaction reinforce the firm’s key attributes, or do prospects leave a meeting confused or unconvinced? Don’t rely on the personality of the firm’s point person to get the job done. Establish a formidable marketing strategy and nurture it. You’ll realize dividends in client acquisition.
Take the Long View
The barriers to entry in the services industry are practically negligible—in some cases only a computer is required—which is why there are so many of us competing for business. Young firms hungry for business will always be around, providing seemingly comparable services for dramatically reduced fees. While that’s a strategy for breaking into a sector, it’s not a sustainable one. And we know that four of every five new businesses launched are out of business within 36 months.
While it can be difficult, taking the long view is what successful firms do, and they are disciplined enough to walk away from situations with undesirable
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characteristics. This philosophy includes losing gracefully. Top firms that employ a refined new business acquisition strategy win about two of every three proposals they submit, which means they lose 33 percent of the time.
The good news is that they demonstrated competency along the way, and even though the prospect didn’t choose them, they’ve developed a relationship that can be nurtured over the long haul. And it’s amazing the number of
“lost” clients who pop up somewhere down the road—either in the middle of a failing project or in a similar position at another company.
Summary
Best-in-class professional services firms view proposal development as a piece of an integrated new client acquisition process. The most effective business development efforts involve structured, in-person meetings with prospective buyers to present qualifications and accurately assess needs. The outcome is a highly specific proposal that exactly meets the needs of the prospect organization and ultimately gives the firm the best opportunity to acquire new business. Professional services firms that struggle with the proposal development process likely haven’t allocated the necessary resources to developing a new client acquisition strategy and an accompanying marketing strategy that supports the effort.
RESOURCES
Alan Weiss, How to Write a Proposal That’s Accepted Every Time (Fitzwilliam, NH: Kennedy Information LLC, 1999).
Harry Beckwith, Selling the Invisible (New York: Warner Books, 1997).
NOTES
1. Harry Beckwith, Selling the Invisible (New York: Warner Books, 1997).
2. Jim Jonassen, Partner, Riviera Partners, phone interview with the author (February 20, 2004).
3. Antony Abiatti, Director, SCS Financial, phone interview with the author (February 18, 2004).
4. Alan Osetek, Sr. VP, Carat Interactive, interview with the author (February 19, 2004).
5. Sarah Casalan, VP of IT, Ecko Unlimited, e-mail correspondence with the author (February 17, 2004).
6. Marc DeCourcey, Consultant, phone interview with the author (February 18, 2004).
8
Strategic Partnering
T. GREGORY BENDER
If there is a way to do it better . . . find it.
—Thomas Edison1
This chapter highlights the importance of strategic partnerships for professional services firms, and the critical success factors involved with building, maintaining, and growing those partnerships. Professional services companies face tremendous challenges in training their employees to keep up with the pace of innovation, new products, and services. Strategic partnerships help these service providers create new business opportunities, enhance their professional services offerings, leverage partner workforces, identify new revenue opportunities, and grow an organization on a faster track than otherwise possible. Partnerships also enable companies of all sizes to successfully compete in the marketplace with larger competitors through combined service offerings. In the 1990s, most successful startups embraced partnering to grow their organizations and provide better services to their clients. Big firms as well as small firms have learned that smart partnering is smart business. Partnering creates the fundamental building blocks for company success.
Think of strategic partnerships as similar to new business units that fill specific needs and services within the organization. Strategic partnerships can be a wide variety of things depending on organizational goals and the business plan. Partnerships can be service driven, product driven, sales driven, cost driven, competition driven, survival driven, or a combination of all these directions. Once a partnership is formed, it must be nurtured: neglect can kill the goose that laid the golden egg. Working to maintain partnerships can make the difference between success and failure. During economic 180
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downturns, partnering makes even more sense because partners help bring each other business as well as leverage their employee skills and expertise.
Partnerships can be high impact, medium impact, or low impact depending on what you want from them and the energy and time that you are willing to invest in them.
There are a variety of benefits available to companies who succeed at strategic partnering. According to Dr. Judith Kautz of Small Business Notes (www.smallbusinessnotes.com), companies participating in alliances report that as much as 18 percent of their revenues come from their alliances. Some of the benefits firms can achieve through partnering include:2
• Achieve advantages of scale, scope and speed
• Increase market penetration
• Enhance competitiveness in domestic and /or global markets
• Enhance product development
• Develop new business opportunities through new products and services
• Expand market development
• Increase exports
• Diversify
• Create new businesses
• Reduce costs
Why This Topic Is Important
Throughout the 1990s, strong strategic partnerships and alliances were the successful building blocks and winning strategies for companies such as IBM, Sun, Amazon, and many successful e-commerce startups. Many later turnaround strategies embraced the concept of creating and growing strategic partnerships to create and build new revenue areas for a company. Today a professional services firm can offer a broader range of services to its existing customers, increasing the value of each customer through strong partnering.
During the mid- to late-1990s, most traditional advertising agencies created strategic partnerships with newly established interactive agencies and /or web development companies that specialized in online branding, marketing, and web application development. This is a strong example of how these professional services organizations involved in branding and marketing could partner with companies that had other areas of specialization. The agencies focused on traditional branding and marketing while the interactive agencies and web development companies focused on digital marketing and interactive technologies.
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The Front Office: Driving Sales and Growth
During the 1990s, ad agencies could not keep up with the growth of technology, and their clients were demanding web-based services incorporating interactive technologies. It was too costly to build these new media in in-house departments overnight and train staff appropriately for these agencies. Many large agency conglomerates such as Omnicom Group, Inc. and WPP Group invested in interactive technology shops that specialized in web-based technologies (e.g., Agency.com). Ad agencies wanted these interactive shops at their disposal for their demanding clients. By investing in these shops and partnering with them, agencies created the ultimate partnerships and strategic alliances.
Traditional agencies turned to these growing upstart web shops that excelled in new media technologies and web marketing. During client pitches, the ad agencies came in as traditional marketers while their new media counterparts came in as web hotshots that understood the medium and could implement the technology required. Both were professional services organizations that shared revenue opportunities and brought deals to the table.
This created win-win relationships and strengthened their ties.
In 1980, Microsoft was a f ledgling, small company. IBM needed an operating system for the IBM PC. Microsoft, against all odds, was able to convince IBM to partner with it because Microsoft had a unique technology solution, even better than the one IBM was developing in its own labs. Microsoft’s partnering deal with IBM set the foundation for Microsoft and cata-pulted them to unparalleled financial success. Microsoft would not be the success it is today without the IBM deal. In this brilliant partnering example, Microsoft (the startup) established its market by partnering with IBM, a huge company at the time.
In the 1990s, IBM focused its turnaround strategy on professional services and strong partnering relationships with IT software and service providers nationwide. This winning strategy helped IBM fuel new growth, sell more hardware, and drive up its stock price. IBM diversified the company and its offerings from hardware sales to professional services. For the foreseeable future, IBM is intent on aggressively growing its professional services divisions and weaning itself from hardware sales as a major source of revenue growth.