Scaling a boutique requires creating new service offerings. Firms that keep bringing the same thing to clients, over and over, stall out due to client fatigue. Building a system to continuously listen to clients and develop new offerings is key.
TRANSCRIPT
Sean Magennis [00:00:15] Welcome to The Boutique with Capital 54, a podcast for owners of professional services firms. My goal with this show is to help you grow scale and sell your firm at the right time for the right price and on the right terms. I’m Sean Magennis, CEO of Capital 54 and your host. On this episode, I will make the case that to scale a boutique, it is required to develop new service offerings. Firms that keep bringing the same thing to clients over and over stall out due to client fatigue. I’ll try to prove this theory by interviewing Greg Alexander, Capital 54’s chief investment officer. Greg took his firm from one offering at launch to 100 offerings at Exit. Greg, good to see you and welcome.
Greg Alexander [00:01:13] Sean, it’s good to be with you today. I look forward to today’s episode.
Sean Magennis [00:01:16] Greg, the other day, we were meeting with an entrepreneur who was inquiring about growth capital from Capital 54. Her firm is nine years old and she asked you how you broke out of the complacency trap. You answered her by saying, we went from a one hit wonder to a firm with a greatest hits album. Can you explain to the audience what you meant by this?
Greg Alexander [00:01:43] Sure. So I launched SBI in 2006 with one service offering. It was a methodology to interview and hire salespeople. It was a hit. It got me on the main stage keynoting the INC 500 show, got me on TV and on the bestseller list. It generated lots of clients and it got me in the door of top companies. As we began servicing clients in this niche, we noticed our clients had other problems. For example, you could hire a great salesperson, but if you did not train him, he would fail. We would bring this to the attention of the client and because they trusted us, they acted on it. Unfortunately, at that time, this meant they hired other consulting firms who specialized in that problem area. I felt this was revenue that was rightfully ours as we identified the need. Yet we did not have service offerings in these areas, so we missed out. This prompted me to build a system to continuously listen to clients and develop new offerings. This significantly increased our addressable market and was a main contributor to our future growth.
Sean Magennis [00:02:55] Excellent, Greg. And when you say we built a system to continuously listen to clients, what do you mean?
Greg Alexander [00:03:02] Yeah, we did five specific things, and I’ll walk you through each one because this will be helpful to the audience. So first we created a client advisory board. This consisted of a mix of current and past clients. We met periodically through the year whereby they told us the problems they were having, their priorities and goals, and described for us the solutions that they were looking for. Number two, we created a post project review process. In practical terms, this meant we did an autopsy on project objectives, timelines, profitability, budgets, deliverables and adherence to our SOPs. This often led to ideas for new service offerings. Number three, we initiated a client satisfaction program. This consisted of sending client personnel a questionnaire from time to time. And some of the questions were defined to get input on our product roadmap. Number four, we obsessed over our win loss program. After every sales campaign, the client told us why we won and the client told us why we lost. This was a treasure trove. Often we lost because we lacked the capability the prospect wanted. We immediately built that capability and watch the close rate improve as a result. And number five, we sent the team to conferences and these were not conferences for our industry. The sales effectiveness industry. No, we went to the conferences our prospects and clients went to. We would deconstruct the speaker decks, the agenda, the trade show floor, the sponsors. This told us where the market was heading. It told us what our clients were focused on and we would build offerings directed at these top priority items. And I should say this was a lot of work. But I can tell you, it taught us a very important lesson that I’d like to share with the audience. The lesson is your opinion doesn’t matter. The only thing that matters is the clients start with the big question what does the client want? And expand your offerings to make yourself more valuable to your clients. They will reward you with their budget dollars.
Sean Magennis [00:05:17] This is so excellent, Greg. And right on. So start with the question. What does the client want? And do five things to find the answers. One, create an advisory board. Two, conduct post project reviews. Three, execute a client satisfaction program for and this is one of my favorites, perform win-loss interviews after each sales campaign and five attend the conferences your clients attend.
Greg Alexander [00:05:51] You got it partner.
Sean Magennis [00:05:51] Perfect Greg. So, great takeaway value for our listeners. And now a word from our sponsor, Collective 54, Collective 54 is a membership organization for owners of professional services firms. Members joined to work with their industry peers to grow scale and someday sell their firms at the right time for the right price and on the right terms. Let us meet one of the collective 54 members.
John Amos [00:06:25] Hello, my name is John Amos and I’m the founder and owner of Invex Technology Solutions. Index is a veteran on small business that provides cloud cybersecurity and big data services for the federal government and commercial businesses in the Washington, D.C. metro area. Our clients turn to us for help with designing and building and operating their systems in a secure cloud environment. We apply industry best practices to deliver cloud based systems that meet the client’s goals and objectives while complying with rigorous security constraints. If you need help with moving or operating your systems in a secure cloud environment, reach out to me www.Invextechs.com or drop me an email at JohnA@INVEXTECHS.com.
Sean Magennis [00:07:09] If you are trying to grow scale or sell your firm and feel you would benefit from being a part of a community of peers, visit Collective54.com. This takes us to the end of the episode, as is customary, we end each show with a tool. We do so because this allows the listener to apply the lessons to his or her firm. Our preferred tool is a checklist and our style of checklist is a yes-no questionnaire. We aim to keep it simple by asking only 10 questions in this instance, if you answer yes to eight or more of these questions, developing new service offerings is not getting in your way. If you answer no too many times you have a lack of new service offerings, which is a problem. Let’s begin.
Sean Magennis [00:08:10] Number one, is your growth dependent on increasing revenue from existing clients?
Greg Alexander [00:08:17] And in scale, it has to be.
Sean Magennis [00:08:18] Yep. Number two, do you need new reasons to remain relevant to your clients?
Greg Alexander [00:08:25] All the time.
Sean Magennis [00:08:27] Number three, do your clients eventually get fatigued? Number four, do you know what your clients need?
Greg Alexander [00:08:37] Now, let’s be careful, audience, don’t be arrogant here. You think you do, but you only know the answer to that question if you ask him relentlessly.
Sean Magennis [00:08:44] 100 percent. Number five, can you continuously learn what your clients need?
Greg Alexander [00:08:50] It’s right under your nose to do some of the basics.
Sean Magennis [00:08:53] Yep. Six. Would your clients participate on a client advisory board?
Greg Alexander [00:08:59] You’d be surprised. Clients love to do that. They if you have a good relationship with them, they’re happy to participate.
Sean Magennis [00:09:05] Number seven, can you implement post project reviews?
Greg Alexander [00:09:10] Well-worn territory, lots of best practices available.
Sean Magennis [00:09:13] Yep. Number eight, can you perform client satisfaction reviews after every project?
Greg Alexander [00:09:20] Also c sats everywhere.
Sean Magennis [00:09:21] Got to do it. Number nine, and you perform when the reviews after every sales campaign?
Greg Alexander [00:09:28] You know, I’m shocked at this, but I would tell you that within collective 54 as an example. I’d say less than 10 percent of members do that religiously, and it’s such a shame to missed opportunity.
Sean Magennis [00:09:38] It’s a huge missed opportunity and a missed opportunity for your sales professionals who really get a tremendous amount out of it. And number ten, are they relevant industry conferences that you can attend?
Greg Alexander [00:09:51] You know, the people that put on those conferences know what they’re doing. Right?
Sean Magennis [00:09:54] They sure do.
Greg Alexander [00:09:54] So they think long and hard about that agenda. So if there’s a topic on that agenda, you can guarantee that your clients care about it.
Sean Magennis [00:10:00] I love that idea. And in summary, if you have one thing to sell and deliver, scale will be very hard. Expand your offerings, increase your addressable market, be more valuable to your clients, accelerate scale through service offering development. If you enjoyed the show and want to learn more, pick up a copy of Greg Alexander’s book titled The Boutique How to Start Scale and Sell a Professional Services Firm. Greg, great to be with you. I’m Sean Magennis. Thank you for listening.