At The Shattuck Group, Randy empowers mid-sized service firms to break through to their next level.
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I have said for many years now that the nature of selling professional services is all about promise. Because services are intangibles, clients sign agreements and begin paying money without taking possession of something physical that they can look at or hold in their hands. Think about that for a moment. What other business model can you identify where you pay for something and get nothing (at least, physically) in return? It almost sounds ridiculous.
Yet, for professional service providers, that’s exactly how our business models work, in most instances. We engage in dialogue with prospective clients. We conduct due diligence and discovery. We develop a scope of services. We convert the scope to an agreement, and we ask clients to start paying us money. What do they get in return?
I believe they should get a three-part promise. The first part is a promise that you’ll actually do the work outlined in your scope of services. That’s pretty straightforward. The second part of the promise is about the client experience. You promise a certain level of service and attention. That’s also clear enough to explain via service-level agreements.
But the third part of the promise is much more complex and nuanced. I call it a promise of outcomes. This one is tricky. In some industries, like financial services, you cannot promise certain outcomes. If someone has $1 million in savings today but needs $3 million to retire, you cannot promise that your services will produce the $3 million outcome. The SEC won’t allow you to make that promise.
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However, it’s not just the financial services industry that struggles with a promise of outcomes. After 25 years of being a professional services entrepreneur, and after having worked with more than 70 mid-size firms, I find that all service organizations struggle with their promise. Here’s why this matters. The promise you make has a huge impact on your growth potential.
If you make the right promise, a promise that clients can believe in and that motivates them to buy and stay with you over the course of time, you grow. But if you make a promise that is not compelling, that prospects don’t believe in or care about, you’ll stagnate. So let’s talk about how to make a meaningful promise that will help you grow.
A Strategy to Define a More Powerful Promise
My master’s degree is in semiotics — the science of signs. Semiotics studies how humans make meaning out of the spoken and written word. I tell you this because I have come to believe, after many years of exploring this topic, that what we say is often not what people hear. Anyone who’s been involved in a long-term relationship with a significant other probably understands this inherently. It takes a lot of communication to comprehend where someone is coming from, even if you know them really well.
In business, this gap between what we say and what people hear becomes most apparent to me when I conduct a certain exercise. I like to ask a cohort of my client’s leaders how they have impacted and delivered value to their clients. These two levers — impact and value — seem to matter most to service buyers. Then I’ll ask a dozen or so of their clients the same question. Inevitably, I discover major differences between their answers. I like to display these differences through word clouds that show what my clients tend to emphasize and how that’s different from what their clients tend to emphasize.
The differences are often subtle but incredibly important. Let me give you an example. A few years ago, I conducted this exercise for an RIA firm. The internal leaders at that firm suggested that it was their expertise — their degrees, years of experience and technical competence in investing — that delivered impact and value to clients.
But when I spoke with their clients, I heard something very different. The clients acknowledged that the RIA had experts. They expected that expertise but viewed it as table stakes. In other words, if the RIA had not had that expertise, the clients probably would not have chosen them in the first place. But expertise was not what the clients said they valued or where they felt impact.
Instead, the clients talked about their comfort level with their financial advisor. They talked about the relationship and the connection they felt for the advisor. They talked about what it felt like to be listened to, deeply, and how powerful this experience was for them compared to other advisors they’d worked with in the past. Rather than emphasizing hard skills (technical expertise), the clients emphasized soft skills (listening, connecting, being empathetic).
So here is the interesting part of this exercise. The SEC does not allow RIA firms to promise returns. I told this client that emphasizing expertise is a secondhand way of saying “we’ll get you great investment returns because we’re such experts.” The problem with this statement is that nearly all their competitors were saying similar things. In truth, my clients were no better (even though they might disagree) than the firm down the street at producing investment returns.
So I recommended a pivot, arising directly from client interviews, that would cause this RIA to really stand out. I recommended that they promise comfort and connection. I recommended that they begin to ask prospects a simple question: Are you comfortable with your financial advisor?
This shift, making a very different kind of promise, worked very well for them. The organization grew even as competitors around them did not. But more importantly, they took on the right kind of clients and avoided the wrong ones — clients who only valued investment returns. This impacted their profit margins and reduced the stress levels of their staff, a pain point for most RIA firms.
So when you consider your promise of outcomes, how does it match up to what your ideal clients want from you? Is there a fit? Or is it time for you to make a pivot?
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Author: Randy Shattuck, Forbes Councils Member
