Winning Business and Building Recurring Revenue Streams

BackgroundOne of the fundamental challenges for professional service providers in the business services sector is overcoming the dependency relationship clients have with their business adviser. While this dependency creates a sense of importance for the adviser, from a business perspective, it is a major barrier to leveraging value from the time and expertise of the adviser.A secondary challenge for many business advisers is that the process of selling their advisory services is centered on their ability to convince a prospective client that they have the skills and knowledge to help the client or that they have a “personality” fit.These two issues are often further compounded by the inability of the adviser to introduce additional services or solutions to the client. This means the value of the client is not being leveraged and that a potential “advice gap” for the client will be filled by an alternative service provider.The outcome is that the process of winning clients, leveraging the value of the adviser’s time and leveraging the total value of the client is compromised. For most business advisers, this means that their ability to generate income is a function of the number of clients they have, the number of hours in the day they are prepared to work and their hourly charge out rate.The Client/Adviser RelationshipThe client/adviser relationship is a unique one. It essentially progresses through a series of phases as the relationship matures and becomes more sophisticated. This is like most other social relationships except that the client is paying for the services of the adviser and rightly has an expectation of value being added in excess of the cost. These phases are outlined in the following: ¬†Credibility – The process of establishing sufficient confidence in the ability of the adviser for the prospective client to appoint the adviser. Implications for Advisers: Important to have strong referral networks (where credibility is conferred), a strong brand name or the ability to establish technical competence quickly.
Assessment – The process of determining whether the appointment of the adviser was a good business decision. Implications for Advisers: Critical to demonstrate value of advice and to deliver in the short term on promises and outcomes.
Satisfaction – A period when the client feels comfortable about their decision to appoint the adviser and the relationship. Implications for Advisers: The adviser must not take the relationship for granted and be consistently vigilant to ensure they are adding value and demonstrating value.
Justification – The period when the relationship may start to feel “stagnant” and there is a sense that the adviser has nothing new to offer. Despite the strength of the relationship, the client again revisits the cost/benefit equation. Implications for Advisers: Seek new ways to revisit issues and opportunities. Ensure that the adviser has integrated the intellectual property they bring to the relationship into the day-to-day processes of the business.
Partnership – Having survived the previous phases, this stage reflects a relationship of mutual respect, aligned interest and trust between the client and the advice business. Implications for Advisers: Continue to innovate but engagement with the client must now be focused on delivering leveraged value for the client and adviser.Leveraging Time & Opportunity To enable the adviser to successfully traverse these phases requires one of two things. The adviser will need to dedicate significant personal resources by way of time and intellectual engagement or bring other resources and processes to the client relationship that delivers value without the same personal time commitment. As such, the secret to building a successful and valuable business services enterprise is not to establish “dependency” relationships with clients but “partnership” relationships where a variety of people and resources are used to ensure the value proposition for the client is significant, sustainable and recurring.