Wednesday, July 16, 2014

Three Value-Adding Strategies

Value drives business success. The premier companies are those that provide distinctive value. The more value delivered to the customer, the more value is typically returned (in the form of revenue, profits, loyalty, etc.) to the provider. The management mandate seems clear: Find ways to create more customer value than your competitors.

Yet value creation as a strategic objective is rarely mentioned in the A/E industry. We prefer concepts like quality, expertise, and experience. Unfortunately, these assets generally don't differentiate us; they are expected by our clients. Added value, by contrast, differentiates. Has your firm made value creation a strategic priority? If not, let me encourage you to give the matter serious consideration.

So what is value? A good working definition is: Value is the perceived benefit received minus the associated cost. Added value, then, is when the client receives more benefit for the cost than was expected.

It's important to understand that there is more to "benefit" than services rendered and more to "cost" than fees paid. To understand value creation, we need to recognize that:
  • Value is a personal and subjective concept that exists in the customer's mind (if you need proof, consider some of the items that people will pay good money for on eBay!). Value cannot be adequately quantified monetarily; purchase price is a helpful but incomplete measure of value. Nor should we presume what any given client values; we must uncover it.
  • Since value exists in the mind, it is delivered in both tangible and intangible forms. Thus the client may value that your firm is easy to work with as much as the quality of your work products.
With these principles in mind, let's consider what my research indicates are the three most common value-adding strategies. These are not specific to our industry, but they are all certainly relevant to us.

1. Satisfy unmet or emerging needs. This is the classic sweet spot in the product/service life cycle. When you are among the few firms (or the only firm) that can meet a client's specific need, the solution you deliver is inevitably of high value. Yet supply and demand are only part of the value equation. One study of professional firms found that the less the client understands the problem, the more valuable the solution. Getting involved early in helping clients solve emerging, unfamiliar problems is a clear opportunity to provide higher value—and reap the greater profit and client loyalty that comes with it.

Among the three value-adding strategies, this is easily the one most commonly pursued by A/E firms. No doubt your firm has periodically added new services to address emerging markets less populated by your competitors. Unfortunately, this strategy is typically short-lived. As the need becomes better known, more firms move to meet it. With more choices of providers, the perceived value (and the profit) declines. A/E firms are also routinely slow to respond to emerging opportunities. By the time most invest in new services, their competitors usually already know about it and are doing the same.

2. Meet clients' strategic needs. Strategic needs are those that affect the overall success of the client's organization. They commonly relate to financial, competitive, political, or operational factors. Given the critical nature of strategic needs, clients are usually willing to pay a premium for good solutions. That's one reason, I'm convinced, why other professional service firms demand higher multipliers than we do—they do a better job meeting strategic needs.

A/E firms once played a much larger role in this arena, but we have forfeited many of the high value, strategic services to other professionals like management consulting firms. The role of "trusted advisor" is at the heart of meeting strategic needs. Many A/E firms find themselves merely filling orders for design services rather than helping clients define their needs and choose the optimum course of action. We are often focused to a fault on doing what we do best, unable to connect our work to the strategic needs that drive our projects.

3. Provide distinct, valued customer experiences. This is the fundamental asset at the core of what is called the Experience Economy. Businesses that command the highest profits these days usually have tapped into the value of offering superior customer experiences. Consider the entertainment industry (including spectator sports), theme parks, adventure travel. Consider how the "Starbucks Experience" multiplied the value of a commodity like coffee. A five-star restaurant is defined as much by its ambiance and service as by the quality of its food.

Among the three value-adding strategies, I think this one holds the greatest promise for our industry—as I've written about in this space. While A/E firms routinely claim to provide "great service" (i.e., great client experiences), rare is the firm that has embraced this strategy as a management priority. That oversight is your advantage. For an overview of effective client service practices that enhance the value of your services, check out this previous post.

Wednesday, July 9, 2014

Proposal Specialists Need a Bigger Role

Working on a proposal for many technical professionals is a distraction from the billable work they prefer. It shows. The technical write-ups in most proposals I see look like an afterthought. Putting aside the weak writing, I too seldom read the kind of project insight befitting the firm's obvious talents. Instead, a generic rehash of a previous proposal's writeup too often suffices.

Who cares enough to raise the bar for proposal quality? Many firms have proposal specialists who by job description should want to push for improvement—and most I meet indeed do. But most also seem to lack the authority or influence to make a big difference. They may go to conferences or read articles about proposal best practices. But they find these ideas difficult to sell to their technical colleagues.

I've been there and understand your struggles. Yet I eventually earned the right to overhaul the proposal process for the national firm where I served as corporate proposal manager, radically changing the look and content of our proposals, and compiling a 75% win rate (nothing builds credibility like winning!). I succeeded not in spite of being a proposal specialist, but because I was one. The change can come from nowhere else.

Sound contradictory? It shouldn't. Who better to change the process and the product than one who has the specific expertise? The problem with most proposal specialists I've worked with is that they either (1) lack the expertise needed or (2) don't know how to leverage it. Let me offer some suggestions from my experience on how proposal specialists can enlarge their role and make a real difference:

First, become the unquestioned proposal expert. Let me be honest; most proposal specialists are not viewed as the consummate proposal experts in their firms. They may be recognized as the best at grammar or graphic design, but not as gurus of developing the winning proposal strategy. Until you acquire that reputation, your perceived role will likely be limited to "proposal coordinator and window dresser." That is, take something raw, organize it, and turn it in to something more attractive and readable. Unfortunately, those proposal qualities alone are commonplace these days.

Focus on function, not form. Don't settle for the role of merely prettying up the product. The primary benefit of good document design is not enhanced appearance but better communication. I meet few proposal specialists who seem to understand this connection. For example, do you strive to make your proposals more skimmable? Do you know what number of characters per column width is best for readability? Do you know how long it will take the client to read your submittal at the average adult reading speed? Do your proposals have a clear theme or discernable storyline? Do you know what makes a proposal persuasive? Having the answers to such questions helps qualify you as the unquestioned proposal expert.

Get feedback from clients. Nothing drives change in the typical A/E firm like direct input from clients. My early breakthroughs as a proposal specialist came as a result of the extensive feedback I gathered through interviews with clients. Thus the changes I proposed weren't just coming from me, but from clients. Unfortunately, it's harder to get good client feedback today than it was 30 years ago. Many are reluctant to be totally honest because such feedback has gotten some clients in trouble in the past. Some don't know what advice to give because the selection process is much more subjective than they want you to believe. In recent years, my best insights have come from former clients who don't have to be so guarded anymore.

Become familiar with the technical issues in your proposals. In the early years, I had the benefit of a decade of civil engineering work experience, so I understood much of the technical content of our proposals. But when I moved to the environmental consulting business, I found myself mostly ignorant of the technical issues and solutions. I closed that gap in large part by sitting in proposal strategy sessions as various technical options were discussed and debated. I also read a lot about these topics, talked about them with my colleagues, and attended technical sessions at conferences. This is a critical threshold for any proposal specialist wanting greater influence; you've got to understand what your firm does if you want a bigger role on proposals.

Earn the credibility to refine the technical parts of the proposal. I'm not suggesting that you need to be helping define the technical approach (although I've had many opportunities to do so). But you should be able to recognize how this is best communicated to the client. My guess is that most proposal specialists do only minor editing of the technical portions of the proposal. When I starting winning three-fourths of the proposals I led, I was rewriting these sections. Of course, it took several years of building my reputation as a proposal expert and gaining my colleagues' trust. But they eventually learned that it made perfect sense to have the team's best writer write the most important parts of the proposal. And interestingly, their own writing improved over time after seeing what I did to their drafts—which meant less rewriting on subsequent submittals.

Cultivate your strategic thinking skills. As I've written about before, most clients see their needs as more than a technical problem. In most cases, nontechnical strategic issues are driving the project. But many technical professionals tend to focus on the technical issues without giving appropriate emphasis to nontechnical matters. Most marketers and proposal specialists, on the other hand, are better at seeing the bigger picture. They may be more attuned to the critical nontechnical aspects of a project. The best proposals put technical issues in the context of broader strategic and personal needs. Thus the best proposal specialists bring this perspective to the team. You may find, as I have, that your lack of technical expertise can be asset, enabling you to bring a fresh perspective that could well turn out to be your proposal's competitive advantage.

The opportunity to develop distinctive, attention-getting proposals is relatively low-hanging fruit for firms willing to break from the pack. Who best to lead this transformation? Talented and influential proposal specialists. If that's your aspiration, hopefully this post will serve as inspiration. If you'd like to learn more about my experiences in making the transition, don't hesitate to give me a holler. 

Thursday, July 3, 2014

Selling: It's Not About You

A/E professionals have historically distanced themselves from the term selling. The s-word is rarely mentioned in some firms. The industry clearly prefers the terms business development and marketing, even if those words are sometimes improperly applied. The widespread disdain for selling in our ranks is palpable.

What is it that we dislike about selling? When I ask A/E professionals, their responses can be boiled down to one primary reason—the seller's apparent self interest when we are in the buyer's role. We don't like the fact that salespeople seem to be more concerned about their own needs than ours. Various studies support this conclusion: The most common complaints about salespeople is that they don't listen, they talk too much, they don't seem to understand our needs, and their follow-up is inconsistent. These are all signs of self interest.

Given our dislike for these practices, surely we would be motivated to approach sales differently. Right? That's not my experience. In hundreds of sales calls with technical practitioners, what I've commonly observed is not listening, talking too much, not really understanding the client's needs, failing to follow up in timely fashion. We may not like traditional selling, but it seems that's the only model we know. No wonder it feels uncomfortable for most of us.

There's a better way! Start by changing your mindset from focusing on yourself to focusing on the client. I know that's what the majority of technical professionals think they're doing, but their actions suggest something else. I suspect that the process of qualifications-based selection entices us to feature our qualifications in sales conversations. But don't be fooled—clients are more concerned about their needs and their priorities.

The best way to sell is to not sell in a conventional sense, that is, putting yourself front and center. Instead, you want to demonstrate that the client's interests are what you care most about. Here are some suggestions for doing that from the beginning of the sales process:

Don't think that merely introducing your firm is reason enough to call upon a prospective client. That's not to say you won't get the appointment. I scheduled numerous sales calls over the years by offering nothing more than "to introduce you to our firm." The client may agree to meet with you, but that's a poor exchange for his valuable time. Instead you should always offer your "entree," which typically is information or advice that is helpful to the client.

Do your homework; come in knowing something about the client and their needs. In the age of the internet, it's just plain lazy to meet with a prospect you know hardly anything about—that's so 1980s! Clients today expect you to have a basic understanding of their business or mission. Ideally you should know of at least a need or two that's relevant to your expertise and experience. Simply showing up and asking questions is not being client centered, especially when you didn't take the time to get more informed ahead of the meeting.

Spend very little time up front talking about your credentials, unless the client asks. It's common in the initial sales call to feel you need to present an expansive overview of your firm and your qualifications. Don't. It's like saying, "Let me start by telling you about the most important thing—me." A better start is to ask some questions confirming your understanding of what you researched in advance: "I was reading that your company was the first to manufacture gonzometers in the U.S. Are you still the market leaders?" Even if the client asks for an introduction to your firm, keep it brief. Let her ask for more detail if she wants it.

Mention your experience mostly in the context of talking about the client's need or project. It's always better to demonstrate your qualifications than to talk about them. For example: "That's been our experience. We've probably worked with 8 or 9 clients with that same issue, including the Big Blue Water District just down the road. What we've learned is that the best way to keep your costs lower is to..." Don't make case histories the focal point of your conversation; instead use that experience to illustrate some insight or option that's specifically relevant to the client's project.

Don't leave or send qualifications materials; provide something with information or insight specific to the client's need. It's best, of course, if your firm created that resource. But don't hesitate to provide something from someone else if you think it would be helpful. Even competitor-authored resources are worth considering if you're not competing with that firm for this particular client or project. This is a great way to show that you're focused on the interests of the client rather than your own.

Keep the focus on advising the client in subsequent sales conversations. If you continue to provide helpful information and advice, the client will want to continue meeting with you. And if that's the case, you stand a good chance of winning the job. Unfortunately, the value to the client of subsequent sales calls often declines, even if you made the effort to start well. Here's the secret to avoiding this problem: Commit to concluding every sales call with a mutually agreed-upon next step. This is easier when you've not only planned your current sales call, but the following one. Go prepared to offer something of value warranting a subsequent meeting. Even better, have a few options in mind since you can never be sure what will interest the client most.

Make your proposal client-centered. If you've worked hard to keep the sales process focused on the client, you don't want to reverse field at the proposal stage—even though that may be what the RFP is pushing you to do. I've written about the challenge of making proposals client-centered in the past. Yes, you want to be fully responsive to the RFP, but avoid being lured into making your proposal all about you. If you make the client the centerpiece of your proposal, including making it user friendly, the difference most likely won't go unnoticed.