Riding The ‘Buyers Cycle’

Many professional and skilled service businesses tend to have revenue profiles which are either unpredictable in a ‘peaks and troughs’ fashion or predictable in a ‘flatline’ kind of style.

Firms with a more ‘unpredictable’ revenue profile are typically so because work is project based and revenue can ebb and flow on a more sporadic basis according to projects on the go at any one time.  Often, they feel at the mercy of market forces …. “Gee, there aren’t too many projects around to pitch for”.  The danger here is falling into a ‘response’ mentality.

Conversely businesses with more ‘predictable’ revenue flows tend to provide reoccurring type work primarily to the same core of clients who (hopefully) turn out again and again to buy.  The danger here is focussing too much on ‘doing the work’, getting complacent and then discovering that billing has plateaued and you’re not sure how to fix it.

Buyer Cycles

Whether your business is at either one of these extremes or somewhere along the continuum, being able to effectively generate more fees and revenue is largely a function of understanding the Buyers Cycle. Using this understanding to make your revenue generation strategy really work is the key.

The Buyers Cycle consists of four seasons which represent the ‘phase’ your buyer is in relative to the next purchase of the service your business offers.  Which phase they are in determines the type of strategy and tactics you use to ‘win their work’, ‘re-engage’ and or ‘increase your services delivered’.

At the heart of understanding why the Buyers Cycle is SO important is that positioning for the ‘next sale’ should be happening all the way around the cycle – NOT just at the time immediately before to the next ‘Deal’.  Most service provides are not taking advantage of the opportunities to work the buyers cycle.

Clients have different levels of focus on and engagement with your services at various phases in the cycle.  They have a different persuasion and intensity of focus across the seasons.  This represents a huge opportunity for the strategic minded service provider.

Irrespective of whether you are the ‘Incumbent’ or you are looking usurp your competitor, the seasons making up the Buyer Cycle should be looked upon as separate and distinct pieces of greater Client ‘Acquisition’, ‘Maintenance’ and ‘Escalation’ strategies.

From my experience, service providers are far less capable when it comes to strategic ‘client acquisition’ and ‘client escalation’ (increasing fees from existing clients) than they are on ‘doing the work’.  This distinction separates those who just survive and those who thrive.

 

Working The Seasons

Summer

We all love summer.  Happy days peddling on the Buyers Cycle.  The sun is shining by way of ample service provision and delivering your expertise; the warm feeling of generating revenue and getting paid.

This is when the client is as hot as they are going to get because you are doing the work.  Even if you are ‘not doing the work’, it’s still the ‘hottest’ in terms of the client’s engagement with the service being provided.

Of course, typically the focus in this phase is to be doing the work, however it is often overlooked that this is a great time to be discovering opportunities for more work and even some subtle ‘seeding’ while in front of the client as to ‘what else you need doing which we provide’.

This goes to ‘mindset’ as much as anything.  Getting out of the purely ‘Technical’ mindset and slipping into a ‘growth’ mindset of opportunity recognition is important.

Autumn

In Autumn the mood is more pensive.  The high, frenetic, ‘party times’ of summer have receded somewhat and have been replaced by the cooler breeze of ‘post implementation’ reflection.

This is the best time to talk with clients honestly about how well you delivered against expectations.  This is the time to do ‘Post Implementation Reviews.  It represents a huge opportunity to deepen relationships, particularly where the client is either ‘very happy’ or ‘unhappy’ with your performance.

If a client is unhappy about how your project or job went, this is the time to mend fences.  In fact, I have seen some relationships become stronger than ever based on using this time as an opportunity to face the music, even apologise and by doing so demonstrate an integrity that is often light on when outcomes are not ideal.

The more likely scenario is where the client is very happy.  Many companies totally miss the opportunity to make the most of this by either not conducting reviews at all, or not fully appreciating the significance of the opportunity.

When a client is really happy, this is the time to do two things which are the easiest, most cost-effective ways to increase revenue.

Once established that a client is crazy happy with the work you have done, typically they are quite happy to give a video testimonial and provide referrals – actual ‘introductions’ to others who will likely engage your services.

When Preparing to work with an accounting firm client four years ago, I came across this extraordinary quote related to research on the UK accounting industry:

 

“70% of new clients came from referrals

Conversion rate from a referral is 75%

97% of clients would happily recommend their accountant

BUT

96% of clients are never asked by their accountant”

 

 

This means that some firms which have significant client lists, could potentially ‘multiply’ their fee’s ‘IF’ they had the will and an effective technique to make ‘Client Reviews’ a natural part of their process.

Of course, this does not just apply to ‘accounting’.  Any skills based or professional services business which does not in ‘Post Job Review’ is missing out; not just on generating more revenue but also in helping their clients to a letter life.

Beyond referrals, another massive opportunity presented in autumn when doing Post Job Reviews is to up-sell and cross-sell other ‘Value Add’ services to clients.  This term ‘Value Add’ has been thrashed to within an inch of it’s life and the word ‘sell’ in any ‘professional’ environment carries terrible connotations.

But offering complementary services is an obligation of the service provider if they know they are doing right by the client.   If they actually ‘believe’ in the value of their additional services and that the client needs them, then they are doing the client a ‘disservice’ by NOT offering to help – clients often don’t know what they don’t know.

I have witnessed the powerful effects on revenue when service providers transition their mindset from reluctantly ‘pushing’ services onto a client to: being an evangelist for the services they offer and evolving the level of help delivered.

Winter

The cold frost of winter has the client in hibernation.  Relative to the high fee generating times of summer, winter represents the period where the direct connection with the client is at it’s least.

At this stage of the cycle clients are not focussed on issues related to the service you provide in summer.  However, it still provides important opportunities to become closer, particularly if you are not the incumbent.

If the ‘incumbent’ provider does not have a rock-solid relationship with their client, winter represents a very vulnerable time because you can be sure that smart competitors will be looking to interact with them with a view to picking up new clients.  If you are not the incumbent this should be you.

The strategy for engaging with ‘prospective clients’ in the ‘off season’ is the subject for another whole article, but to give a quick intro it’s about identifying the type of clients and industries for which you have delivered great results and starting a relationship with those clients.  There are many ways to do this.

The philosophy for winter, whether you are the incumbent or not is to engage target clients in communication regarding problems they are looking to overcome.

Spring

As the frost of winter gives way to the new life of spring, clients awaken from hibernating start orienting themselves to your ‘primary service’.  By the time mid spring has come around many clients have already decided who their service provider will be for the ongoing summer.

This is nearly always the case for seasonal ‘repeat business’, but it occurs more frequently than you would think in project related work.  Many pitching for project-based work do so at the 10^th or 11^th hour ‘hoping’ that their bid will be well received, when in fact their competitor is helping the client shape the terms of Request For Tender or Proposal.

It may not be that the incumbent is actually helping the client with the proposal process, but you can bet that the service provider with the strongest relationship with the client wins out.

As all skilled and professional services are increasingly commoditised, it is more and more evident that client acquisition and maintaining clients is a function of strong relationship and perceived value.  Neither of these will make up for the absence of the other.

If you have a good relationship but some else offers greater perceived value you may be on borrowed time with that client.  Equally if you are delivering great value but the client does not clearly acknowledge this and someone else develops a strong relationship, you may be danger of losing the client.

Where ever you are around the Buyers Cycle, there is a clear and present need to deepen client relationships and continue to evolve the level of value you deliver.  Don’t get confused and think that your business is about ‘doing technical work’; it’s actually about strategically developing relationships based on perceived value.

Director and Founder of Formula 1 For Business  and co-author of the internationally published book of the same name, Simon Frayne works with ‘working owners’ of professional and skilled service-based businesses to achieve controlled and sustainable growth.  As well as ‘business people’ he helps ‘sports people’ to achieve sustained high performance. He presents keynotes and training on controlled business growth and  ‘sustained high performance’ around Australia and beyond.  Keynote highlight this year include the Australian Project Management Institute WA, HLB Man Judd and Sportspro International