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The best opportunities for selling professional services – and the easiest to close – come via referrals from satisfied clients. For the entrepreneur launching a services business, however, those referrals may be several months or even a year from fruition.
The good news is, if you’ve properly pegged your ideal customer profile, selling professional services should be part of the fun of running a company, and there are myriad ways to sell right out of the gate. Presumably, all of your targets need your services at some level, and they should at least be willing to hear your value proposition.
While there are innumerable methods to increase sales activity and bona fide leads, such as speaking engagements, publishing, direct mail and e-mail campaigns, to name just a few, this article focuses on some of the methods that have proved successful for our firm, Venture Advisors, LLC, which I founded with a partner in 2002.
The points in the heading sound blatantly obvious, but it’s amazing how important these elements are to selling your services, and how neglecting any of them will hamstring your efforts. Before we launched our firm, our most important due diligence was focused on our competition and the specific companies and individuals we thought could and would use our services.
Once we convinced ourselves that a sizeable market existed, we aggressively pursued our list of more than 25 senior executives at companies that fit our ideal customer profile. Our pitch was and is a simple one: We provide senior-level finance, legal and human resources expertise at a fraction of the cost of internal hires or traditional consulting options. Because our target clients fit the profile – for instance, they may need financial and accounting guidance but do not yet need a full-time CFO – we almost always got a meeting and an attentive audience.
We distinguish ourselves primarily on cost, scalability and flexibility. While cost is usually most important, our clients love the fact that we don’t even ask for long-term contracts. If a client isn’t happy, they can terminate us immediately at no additional cost (which, fortunately, none have yet done). We also tell customers – and it’s not just lip service – that we can almost always find a pricing scheme that will work for them. Many of our clients are early stage with cash concerns, and we need to take that into account.Additionally, we network aggressively for our clients and always look to help them meet and close prospects. Nothing will endear you to a client more than helping them with their top-line growth.
Any professional-services entrepreneur can develop strategic partnerships to build a referral network and maximize sales activity. Such relationships can be informal arrangements among friends or elaborate deals papered with complex contracts. The key, of course, is thinking strategically and identifying providers who are in complementary but noncompetitive specialties. While not the focus of this article, successful partnerships need significant care and feeding, but can deliver tremendous return on the investment.
We identified several areas of expertise that would be of interest to our clients and would have a nexus to our service offerings. Payroll, benefits administration, insurance, IT, commercial real estate, executive search and tax preparation are obvious verticals for us, and, not coincidentally, our partners in these areas have clients who have a need for some or all of our services as well. We also have a partnership of sorts with the venture capital community, as we refer clients who are seeking funding and the VCs refer portfolio companies to us because they believe in our expertise and our value proposition.It is likely that your strategic partner roster will look quite different one year down the road, as you substitute partners who fit your model and style better. It is, of course, paramount to select partners who will deliver exceptional service to your clients. In close second on the list of criteria, however, is finding someone who (a) understands your business and your value proposition; (b) has developed robust partnerships with other providers; and (c) is willing to open up their client list, at least to some degree, to explore referral opportunities and to make introductions when appropriate.
When referring clients to your partners, it is crucial to be candid with the client about the details of the partnership, especially whether referral fees are a component. It is equally important, and not always obvious, to reinforce to the client that you are only making an introduction, and that the client must choose his vendor independently. One of our clients hired our (now former) tax partner for an audit and ended up in a bitter dispute over the final bill. The client expressed displeasure at us because we made the introduction, and asked our help in resolving the matter. We brokered a compromise, retained the client — and learned a valuable lesson.In our experience, non-commission-based relationships are just as effective as commission-based, and they eliminate the need for tracking and auditing the financial component. Most importantly, they help avoid the problems like we had with our tax partner, because we can tell clients that our partnerships are strategic only and not pecuniary.
It stands to reason that the more products and services you have to offer, the more numerous your sales opportunities. Our core model is an integrated set of offerings that are distinct but complementary. The importance of finance, legal, and human resources to start-up and middle-market companies was clear to us and made, we thought, a compelling offering. What we didn’t necessarily foresee was that it would also allow us to get in front of many more companies to make our pitch.
On several occasions, someone from our legal or HR staff has pitched a prospect and ended up “selling” our finance services. As importantly, our finance teams – which generally work on-site at client offices – frequently learn about opportunities for our other services, and are ideally suited to initiate sales of these services to client management teams.
If your business doesn’t lend itself to such a varied pitch, there are still ways to distinguish your offering when trying to get in front of decision-makers. Price, of course, is one such differentiating factor and the one that gets an audience most frequently. Also, the ability to make your services scalable can be a huge benefit that can help you broaden your target-client demographics. We offer financial services from accounts-payable interns to controllers to CFOs. As a result, we can offer programs to companies at the earliest stages up to those with more than 250 employees.
Successful entrepreneurs wisely tend to be frugal, especially in their early days, but new companies must loosen the purse strings in some areas to effectively sell their services. We were convinced from the outset that we had to act like a “real” company to convince senior executives to hire us. This is especially true for companies with little or no track record, and likely more important for services companies than product companies.
Establishing your corporate identity is also important, not only from a marketing perspective but for making effective and confident sales presentations. Paying a designer to develop your company logo will give you consistency and a professional presence. Fortunately, you can produce impressive collateral materials “in house” with a modest investment in a color laser printer. Sure, you can get 1,000 business cards for $10, or build a Web site for $49 (we initially did the latter), but as soon as possible, spend a bit more to get materials that show you are serious about your endeavor. Talented free-lance Web site designers, like graphic artists, are still very affordable, allowing companies to get a professional look for relatively short money.
Of course, an award-winning Web site and snappy graphics won’t mean anything if you don’t back them up with excellent service, but your promotional materials should reflect the quality of your company, not detract from it. Professional-looking materials will also give you added confidence when selling your company and your services.Colleagues with mature service businesses warned me that even our friends and closest contacts would not take us seriously until we were in business for at least a year. While that may be an oversimplification, there is some truth to the concept.In our case, we often compete against – and distinguish ourselves from – solo practitioners or contract professionals who may simply be “consulting” until they find an attractive full-time position. Early on, we had to establish that we were not similarly looking for the next-best thing, and that we were committed to building a professional services firm. Our corporate identity approach was one important component of that effort.
As with many things in business, great sales opportunities sometimes land in your lap when you least expect it, and in ways you never could have planned for. A month into our existence we landed a great client (and one that remains the largest of our 30 clients) through a chance encounter at a cookout.My partner and co-founder, Jim Jordan, was at the cookout and was, as always, in sales mode. Someone asked him if he had approached a mutual acquaintance at a venture-backed company. Jim had worked with the mutual acquaintance at a previous company, but had not been in touch for a couple of years. Jim called the next morning. We had a meeting with the CEO and COO the next day and within a week had signed an agreement.
The encounter was serendipitous largely because of the timing: The company was close to hiring a controller and might not have hired us if they had. Instead, they liked the fact that they could have a part-time CFO and a part-time controller under our model, and that we brought to the table other services and business contacts. We won the engagement with our value proposition, and we’ve kept it by delivering excellent service, but the initial meeting might never have happened without a good bit of luck.
Hard work and consistent effort often beget serendipity. Industry networking events and seminars are a good example. People can and do disagree on the ultimate value of attending such events, but you’ll likely come away from almost every event having met at least one person worth pursuing. And occasionally you will get an excellent lead at the event you nearly skipped. As with cold calling and direct mail, it’s a numbers game.