How Clients Buy

In How Clients Buy, Tom McMakin and Doug Fletcher present seven elements that must be present before a prospect will be ready to buy a professional service. They must

Like the essential ingredients for making bread, Tom asserts these Seven Elements represent a mutually exclusive and collectively exhaustive (“MECE”). Consequently, they constitute a list of essential ingredients for business development success. Using the Seven Elements, you can conduct a self-assessment at the firm, practice, or personal level to gauge your relative strengths and weaknesses.

Take this self-assessment to identify your relative strengths and weaknesses and benchmark your results against peer firms. Complete the survey, and we’ll send you two free copies of How Clients Buy.

by Tom McMakin

The post Using the Seven Elements as a Diagnostic Tool appeared first on How Clients Buy.

When researching How Clients Buy, Doug Fletcher and Tom McMakin interviewed dozens of successful rainmakers. Their subjects ranged from solo practitioners to managing partners of global consulting firms. Doug and Tom’s goal was to field test their business development hypotheses. In addition, as Doug explains, several themes regarding the essence of rainmaking emerged from their conversations.

“Sales” is a word loaded with baggage. Dump it if it makes you uncomfortable. The task remains:

Identify a community of companies and executives to which you would like to be of service and then do everything you can to help connect those in that industry with introductions, smart articles, and peer meetings.

Add value. Be of service.

In the long run, no amount of clever marketing will overcome poor execution. You are the product. Future sales depend on your reputation, which is built one project at a time. In a connected world, there is no room for anything less than great work. It’s table stakes—a necessary but insufficient requirement for sustained success.

Doing truly superior work is easier said than done. Nevertheless, to maintain personal and professional flexibility and freedom, it’s imperative that you take personal responsibility for business development. Commit time. Be disciplined. Make it a habit. Start now.

Effective networking isn’t a matter of exchanging business cards in a generic hotel ballroom while drinking insipid wine from plastic cups. Make time to seek out interesting people. Be generous with your time. Give away your best stuff. Invest in others without expectation of return. Cultivate serendipity. It’s worth it.

Actually, Doug and Tom advise, “Develop your own style.” However, I think that’s inevitable if you take responsibility for business development, build relationships by being generous over time, and consistently do great work. The clients you serve, the culture of your firm, and your personality and experiences will shape what works. Go with it. Resist the temptation to imitate slavishly. Being authentic in our approach is not only more effective, it’s easier to sustain.

Satisfying the Seven Elements of Business Development can be devilishly difficult. On many occasions, I’ve been devastated upon discovering that my carefully cultivated prospect simply isn’t ready to engage. While disappointment may be inevitable, hearing, “The timing isn’t right,” should be affirming. After all, it suggests your prospect:

Stay in touch. Continue to add value and cultivate your relationship. When the time is right, you’ll be in the position to engage. It’s a marathon consisting of a million sprints. Know that and you’ll be less inclined to quit.

by Doug Fletcher

The post Learning from Rainmakers appeared first on How Clients Buy.

One might argue that Tom conflates marketing automation, inbound marketing, and content marketing. However, I hear something different. What I understand from Tom’s comments is that he believes the intersection of these tools and techniques is too broad and too passive to be the centerpiece of business development for professional services.

Rather, Tom recommends a narrowcasting approach built on two themes:

First is Best. Define the category in which you place yourself and your firm so you can be #1. As Tom puts it, “It’s way better to be the largest full-service accounting firm serving Austin, Texas, than it is to be the 101st largest accounting firm serving North America.”

Build Targeted Relationships. Given your niche, identify the people with whom you want to develop a meaningful relationship. In professional services, the number is likely to be in the hundreds—not in the thousands or tens of thousands. Engage the community you most which to serve in conversation. Learn about their interests and demonstrate your trustworthiness.

In my experience, Tom is no Luddite. His firm utilizes a modern customer relationship management system rather than a Rolodex. Neither is he opposed to content marketing. After all, he invested months into researching and writing How Clients Buy and actively develops videos, podcasts, and blog posts for this website. It’s just that Tom views these and other technologies as tools best used with intention.

Doug Fletcher and Tom argue seven elements must be satisfied before a prospective client will engage your services:

Truly valuable content can help build awareness, understanding, and even belief. Timely communication that leverages marketing automation can even spark a conversation at the moment of readiness. Demonstrating trustworthiness, on the other hand, is more subtle. Emails, newsletters, and white papers are insufficient. Cultivating trust benefits immensely from real conversations and face time.

By all means, create content. Share the good stuff. Use inbound marketing and marketing automation—mindfully—to build awareness and understanding of your firm and its capabilities. Just don’t neglect the importance of relationships and trust. For that, you need to get personal. A sharpened focus will make the effort easier, more productive, and personally satisfying.

Additional Reading:

by Tom McMakin

The post First is Best appeared first on How Clients Buy.

Trust is an accumulation over time.

Skin in the game can take many forms. Not all currencies are money. Some forms appeal to the head, others the heart.

Demonstrating emotional authenticity and intimacy is difficult for many of us who wish to be perceived as being professional. That’s because authenticity and intimacy are risky. As Bill Noonan explains,

Defensive routines are patterns of interpersonal interactions people create to protect themselves from embarrassment and threat. The conditions of threat and embarrassment arise when our abilities are negatively evaluated by a colleague or authority figure.

Being vulnerable is uncomfortable. Visible gaps in our emotional armor can be interpreted as weakness. Weakness can be exploited by others. However, by abandoning our defenses we demonstrate trust. Such a gesture can go a long way toward evoking trust in return.

For a more hard-headed approach, consider guarantees. David Maister—co-author (along with the aforementioned Charles Green) of the classic book, The Trusted Advisor, and a man How Clients Buy co-author Doug Fletcher considers a mentor—advocates professional service providers offer unconditional satisfaction guarantees to their clients.

by David Maister | Professional Life Podcast Series

by Tom McMakin

The post Trust is Everything appeared first on How Clients Buy.

Traditionally marketing and sales are two poles that define a spectrum of work companies do to drive revenues. The work is different in several important respects:

Much of this language comes from the world of consumer products. But does it apply to the provision of professional services? The short answer is yes. The longer answer is that in a world where individuals and their expertise are the product, professionals need to have both long and short-game skills to finish the full eighteen holes.

Ask Don about how to land a new client and his main advice is, above all, to think. He says that professional service providers don’t have a product to brand or sell, per se. They have their experience and their brains which they bring to the table. They are solution providers. In that world, your market research and product development (things that marketers do) happen in the same instant as you are presenting and pitching (the work of salespeople).

This a radical notion that undermines centuries of conventional wisdom about the power that stems from a division of labor workforces. Nineteenth-century sociologist, Émile Durkheim, wrote the division of labor inevitably produces “a proportionable increase of the productive powers of labor.” It is as if the world of professional services is a throwback to a time when those in business were craftspeople who had to be skilled in everything from design and production to marketing and sales.

That is why professional services are so hard to scale. An expert point of view can scale. Write a book and it can be read by thousands. But experience and brains are difficult to productize and deliver to large numbers of customers. Which is why Don’s message that we need to both be marketers and salespeople continues to be critically relevant to anyone who is in the business of building a practice around their expertise.

by Don Scales

The post Sales or Marketing? appeared first on How Clients Buy.

by Doug Fletcher

The post Forget About Being Likable appeared first on How Clients Buy.

Levison Wood knows something about generosity and so does Kris Klein.

As documented in his Walking the Himalayas series, Wood shared a meal with Kirgiz shepherds in the Wakhan Corridor in the remote northeastern corner of Afghanistan.  In the documentary, the chief welcomes Wood over the open fire and offers him the eyeball of a sheep and then a bowlful of brains. Wood explains these are the choicest pieces. Kirgiz tradition is that the good stuff is always shared.

While the prospect of chewing on an eyeball might seem foreign to you or me, the idea of sharing the good stuff with others is familiar.  The world over, people in a community are taught to share with others, particularly strangers, with no expectation of return.  Call it karma or paying it forward, human beings have a sense that what goes around comes around. As the early Christian writer, Paul, wrote to a community in Galatia, “As you sow, so shall you reap.”

Kris is the CEO of the well-regarded marketing and sales strategy consultancy Lenati.  He believes in “top funnel demand.”  From where he sits, he sees a lot of small professional services businesses initially rely solely on their network of relationships to scale.  Over time, however, those relationships cannot keep the firm on a high-growth path.

I asked Kris to hazard a guess about the relative proportion of demand-driven business to non-demand driven business that exists in his own firm.  He reported that it used to be that 100% of new business came from the network, but now the firm is generating about 30% of its business using automated outreach and content marketing, so-called demand marketing.

Here is how it works:  You give something of value to the audience you hope to court on your website.  This can be anything from a consumer’s guide to an instructional video or a whitepaper.  The important thing is that the target audience finds it when they are looking to learn more about the subject on which you are an expert and then is attracted to the content.  From there, marketing automation takes over. Software can track who is downloading your content and then follow up (automatically) with additional useful content.  Over time, having reminded your would-be customers about your expertise, having given them something of value and stayed top of mind, they either call you asking for your help on a project, or you can call them.

I asked Kris what made him so successful at this approach.  He confided that there is a secret to content marketing.

His secret?

“You have to share your good stuff.”

Seth Godin has written, “In the digital world, the more free samples you give away, the better you do.  The miserly mindset that afflicts the merchant watching inventory walk out the door at the market is counterproductive in the digital world.” But what Kris is talking about is somewhat different from Godin’s philosophy of free samples. Kris is talking about giving away your best work, and that is harder.

Like the Kirgiz herdsman, don’t sandbag your generosity. If you believe that welcoming a guest is a duty and a high honor, then serve up the eyeballs and don’t keep them for yourself to munch on after the party is over.  Serve them without a feeling of loss but instead with a feeling of creating something greater: a new friend or ally.

The same goes for content marketing.  If you hold back your “good stuff,” your efforts will be less effective.  Your good stuff is, by definition, the most interesting stuff.  If you hold back and offer up only your not-so-good-stuff, your offering will be less compelling.

Giving away your best work won’t be easy. “This was hard to create. I want to be paid for it. What if I do attract a new client, what will I have to show them that they haven’t already seen? Then there are my competitors. Won’t they just rip off my stuff?”

All good points, and all are wrong.

Salma Jafri writes,

Give away the why, what and who. Give away the inspirational content. Give away the content that shows people what’s possible. Give away the results. Give away the stories. Give away your opinion. Give away your best thoughts on the topic.

Instead,

Charge for the how, Charge for showing people how to get from A to B. Charge for the processes that you’ve made. Charge for showing the systems you’ve set up that they can replicate. Charge for the templates. Charge for, “I’ll hold your hand all the way.” Charge for customization. Charge for training. Charge for empowering your audience.

Indeed, Salma gave away that insight for free and look what happened. I received that gift and found it valuable and now am passing it on to you. It is as if there is a direct relationship between the value you offer and the speed at which word spreads that you are a source of expertise and insight.

So, don’t hog the eyeballs, share them with every honored guest who shares a meal in your yurt. “Share the good stuff,” as Kris says.

by Kris Klein

The post The Good Stuff appeared first on How Clients Buy.

According to The 8 Rules of Business Golf,

Golf isn’t merely a leisure sport. It’s the martini lunch of the modern workforce, the buoyant venue where work gets done.

That may have been true, but golf—and country club memberships—are in decline. It’s been said that golf is too time-consuming, too slow, too expensive, and too difficult. I think Tom McMakin has identified another reason for the structural diminishment of the sport: it’s become a less effective way to cultivate business relationships over time.

With due respect to Mark Twain, “propinquity” is a useful five-dollar word. It refers to the psychological proximity between people. It can derive from physical closeness, kinship, or other similarities. Propinquity is one of the main factors leading to interpersonal attraction.

As Tom explains, professional services are bought based on relationships and trust. Not surprisingly, the cultivation of propinquity is a key indicator of potential business development success. Frequent interactions over time are the building blocks of relationships—something social psychologists call the mere-exposure effect.

White Bucks

A white-shoe firm describes professional services firms in the U.S. that serve large corporations. Historically, the term referred to firms run by WASP elites, particularly those in Boston and New York who attended Ivy League schools, where the white buck dress shoe was a distinctive fashion accessory.

The people in white-shoe firms lived near one another. They attended the same schools, went to the same churches—and played golf at the same country clubs—as their prospective clients. Propinquity abounded. More often than not, the resulting familiarity bred affinity rather than contempt.

As Tom explains:

So maybe our parents were accountants in Poughkeepsie. In order to generate business, in order to create those relationships off of which they’d scope business, they’d meet people at the synagogue or church, or they’d meet people at the golf course. They’d get to know them over a lifetime, and then they would scope business off of those relationships.

However, the emergence of new technologies—and the globalization they have encouraged—are undermining these traditional sources of propinquity, trust, and new business opportunities.

More than 200 years ago, Adam Smith noted, “The extent of the division of labour…is necessarily regulated…by the extent of the market.” Small towns have general stores, while big cities have boutiques. Small towns have all-purpose CPAs. Global markets have, “very narrowly niched accountant(s) that sells expertise around transfer pricing as it affects sovereign wealth funds.”

Niches tend to breed more niches in an expanding market (e.g. heavy metal genres). The more specialized we become, the less likely it becomes that our practice will be supported locally.

Golfing may be on the decline for a variety of reasons. I suspect that globalization is a primary cause. As the scope of our services narrow, we have to reach farther afield to make a living. The effectiveness of hanging out at the country club as a business development strategy is diminishing.

That’s not to say the importance of relationships, referrals, and trust has diminished. In fact, there is a reason to believe that trust may grow in importance.

Have you ever tried to explain to your child or parent what you actually do for a living? People think they know what accountants do, but few will immediately grasp “transfer pricing” as it relates to “sovereign wealth funds.” As we specialize, our services are increasingly likely to be characterized as credence goods.

In “On Doctors, Mechanics, and Computer Specialists: The Economics of Credence Goods,” economists Uwe Dulleck and Rudolf Kerschbamer observe,

Education and experience give experts the ability to diagnose the exact needs of customers who themselves are only able to detect a need but not the most efficient way to satisfy it. The information problems in markets for diagnosis and treatment suggest that experts may be tempted to defraud customers.

Our specialization creates an advantage. At the same time, it pushes us away from local clients, makes what we do harder to understand, and can increase the threshold level of trust required to engage our services. It’s tough to build trust across distance—even more difficult than playing golf well.

by Tom McMakin

The post The Decline of Business Golf appeared first on How Clients Buy.

In his most recent book, Skin in the Game, Nassim Taleb defines intellectualism as, “the belief that one can separate…theory from practice.” The problem with intellectualism, according to Taleb, is that it obscures the causal links between thoughts, actions, and consequences. Theories not subject to the balancing feedback of consequences are dangerous to one’s commercial health.

Nevertheless, beginning early in the 20th century, businesses schools embraced intellectualism and scientism, which Taleb defines as, “a naive interpretation of science as complication rather than science as a process and a skeptical enterprise. Using mathematics when it’s not needed is not science but scientism.” As Tom McMakin and Doug Fletcher note in How Clients Buy:

Like other social sciences, including sociology, anthropology, and psychology, the study of business suffered from an inferiority complex as newcomers in the academic ranks. Business departments made up for it by emulating the hard sciences like mathematics and physics, teaching economics, finance, the management of resources—anything that could be quantified—while eschewing soft skills like people management or sales, which might be better learned standing at the side of an experienced practitioner.

As a consequence, “intellectual” marketing pushed aside “commercial” sales as a featured topic of discussion within the academy.

The omission of sales from the curricula of academic training need not be a constraint. If it’s truly important, we would expect firms to make an investment in developing the sales skills of its employees and partners. We don’t, though. More often than not, junior partners are left to their own devices.

While selling is acknowledged as being necessary to a firm’s survival and success—and “rainmakers” rewarded handsomely—the act of selling is commonly perceived as being grubby or déclassé. It’s not something done in polite society.

Part of that perception is due to our self-awareness that professional services are a credence good. Per Wikipedia,

A credence good is a good whose utility impact is difficult or impossible for a consumer to ascertain…The seller of the good knows the utility of the good, creating a situation of asymmetric information.

Asymmetric information gives rise to the agency problem, in which the seller of a service can be tempted to exploit the buyer. Professional ethics and misunderstanding of what selling entails result in a misperception of sales as being inherently manipulative and, in the long run, potentially damaging to our reputations.

Even while acknowledging the requirement for sales, we cringe at the thought of being labeled a salesperson. Too often, that aversion stunts our professional growth and ability to make a living.

Plato and Aristotle cast long shadows. Essentialism as applied to sales—the persistently popular view that salespeople have intrinsically different and characteristic natures or dispositions—is a perspective that diverts our attention from what is actionable. That is, it focuses on the seller and ignores the buyer. That’s a mistake.

The American Bar Association reports that there has been an 18% increase in the number of lawyers in the United States over the last 10 years. That’s somewhere between 2-3 times the rate of growth of the country’s population. The competition among providers of professional services continues to heat up. Relative market power is shifting to buyers.

Business development is a practical requirement. It’s worthy of our study and understanding—notwithstanding the neglect of sales by schools. Furthermore, a seller-centric perspective that emphasizes persuasion and manipulation are short-sighted, outdated, and ineffective. Bullshit and exploitation aren’t sustainable in a competitive environment predicated on trust.

Tom and Doug offer an alternative path, one characterized by the following:

A focus on how clients buy reconnects theory and practice. It acknowledges the reality of the marketplace. It allows us to be more effective salespeople without compromise.

by Doug Fletcher

The post What They Don’t Teach You in B-School appeared first on How Clients Buy.

The Seven Elements is a set of conditions that must be present in order for a prospective client to buy your services:

The buying process for professional services and consulting isn’t linear. You can’t drive prospects through a funnel. The dynamics of each prospect’s buying journey will be unique.

However, you can anticipate your prospective clients’ buying needs and take actions that facilitate their buying.

If our role in a firm is marketing, there may be a tendency for us to rate others’ awareness and understanding of our services highly. On the other hand, if we are primarily focused on business development, we may tend to rate the trust and respect felt by others as being high. Nevertheless, we probably have weaknesses that could be our undoing.

After all, it’s insufficient for a client to reach six of seven thresholds. A prospective client might be very aware of you, understand your services, respective your capabilities, have an important and pressing need and have the budget. If they don’t trust you sufficiently, you’re unlikely to get the gig. So, continuous and honest self-assessment is required to identify and rectify deficiencies. Cultivating The Seven Elements is a discipline and practice rather than a campaign.

by Tom McMakin and Doug Fletcher

The post The Seven Elements of Business Development for Professional Services appeared first on How Clients Buy.