I was chatting yesterday to my wife on the way to picking the kids up from school.
You know those conversations about work where you’re looking for someone to help you make sense of something you simply can’t yourself?
I was wracking my brain to work out why professional service firm owners were so different to product-based business owners with the way they approached investment in their businesses. The attitude both sides have to investing is starkly different.
I fall squarely in the category of valuing customer acquisition (building a brand/leads) over product optimisation (perfecting the product) because I believe the old adage “if you build it they will come” is garbage.
Maybe that is because in the past I tried to build, what I believed was a great product, but failed to bring the customers along for the journey and ultimately failed. Maybe it is also because I ran a recruitment business that kept improving, was constantly providing a better service, but couldn’t communicate that to the market and therefore couldn’t grow. I have certainly lived and breathed both sides, and my hot take is that there’s no point having a great product or service if you have no customers to sell it to.
History is littered with great solutions and no customers.
So from where I stand many large service-based business owners make the same mistakes I did. They focus on perfecting their product, whereas product based owners tend to focus more on customer acquisition.
That makes sense for service business owners because in most respects they themselves are their product. Building skills and improving the service is naturally something they have had to invest in to make their business better.
Think about the recent rush to focus on “technology and innovation” in legal services rather than client experience or acquisition. Consider the vastly different sums presently being invested in these “innovation” projects and how much it dominates the discussion vs discussion of “growing the pie”. Everyone wants a shiny toy that improves how they deliver their service and protect what they have. The problem is, no matter how good your new toy, if you haven’t brought customers along on the journey with you there is every chance they won’t buy it.
On the flip side in the product based world the reality for the owner is that they have a product, so they focus their attention on selling it. They see the value add is on brand and promotion, not making the widget better when that is rarely the reason it is purchased.
Professionals like lawyers, accountants, and financial planners have a choice just like the product guys, however, most of the time they choose to improve the product rather than market it.
So where does the balance lie? Obviously you need to do both. You need to improve your service. You need to build efficiencies. But you need to balance that with the same amount of attention on how you sell it. You need to acquire or improve relationships, as much as build efficiencies. You need to follow-up, nurture and communicate. You need to bring your potential clients along for the ride.
This is certainly tough for service owners to get their heads around.
Doing stuff better has been enough in the past and clients somehow appeared.
The difference now is that smart professional service firms are waking up to the opportunities to build brand trust over time, and the importance that client acquisition plays in the growth of their business. That means simply doing it better won’t be enough when your competitors are doing both. That should scare the pants off anyone running a business if they aren’t investing in brand and growth.
So the question then is how do you go about finding that balance? Obviously, doing both at the same time is hard especially without deep pockets. So break it down. Is a “law-bot” more important now than making sure you have a great follow-up process that improves client conversion rates that you are already attracting? Is an automated solution the best next step or is attracting actual traffic and interest in your brand first? Are you doing all the basics around sales, follow-up and communication first to lay a framework that your solution can leverage? How long will the solution take to build, and can you do all of the above in the mean time? The answers will be completely up to you and your business, but mapping it out over time in an integrated way is the only approach that will ultimately work.