PM Forum Conference – The clients bite back (Sony Ericsson, Better Capital and JP Morgan)

My favourite session at each year’s PM Forum Annual Conference is the final plenary session where a panel of professional service clients are invited to give their view on the marketing and sales approaches that they receive and to answer questions from the floor.

This year the panel comprised:

- Jonathan Pearl, Corporate Vice President and General Counsel at Sony Ericsson
- Jon Moulton, Chairman of Better Capital (formerly managing partner of Alchemy, UK based private equity firm)
- Krista Lindsay, Vice President, corporate real estate EMEA at JP Morgan

Here are some of the highlights of a most entertaining and interesting discussion.

Q: How can firms be better at pitching?

JM – Find out what we might be interested in and pre-qualify so that you know the relevant decision maker
JP – Most law firms seem to be embarrassed to sell and pretend that they are on a social visit. If they were good at selling, they’d be dangerous
KL – Having previously been involved in architecture and design, I find that they are generally very good salespeople. The professions provide similar services so they need to be clear about what differentiates them – this takes time and research to demonstrate appropriate expertise

Q: What tips or best practice have you seen in building good professional relationships?

JP – Be upfront about fees. Bill on time. We scrutinise every bill to see if there are areas where we do not get enough value from the relationship. Most lawyers are not good at handling relationships – they are good at giving advice, but not so good at the commercial side of things. One firm even got my company and another Sony business confused – I wasn’t very impressed. All touch points are important – brief your telephone and reception staff – I expect them to recognise me when I call or visit. What impresses me is responsiveness – I had an injunction late on a Friday afternoon. I called five firms and the one that answered got the job – and we have had a good relationship ever since
JM – Show your understanding. Do Google searches before pitches or make a short telephone call asking “What would make you change your supplier?”
KL – Know your client. Suppliers must be prepared to roll up their sleeves and work with you, really get to know you. Be interested and inquisitive – no “cookie cutter” service.

Q: What are the alternatives to billable hours?

JM – In the private equity field we are used to contingency fees which make lawyers uncomfortable. But in essence we need firms to provide a budget for fees and stick to them – as they do in the construction industry. So, provide an accurate quote and hold to that price. Chargeable hours are just stressful to everyone.
JP – Budgets and staged payments. Law firms should rethink the whole model as the billable hour is outmoded. If one firm were to drop it, they would be a serious contender.
KL – Just no surprises please

Q: What are the most novel ways people have used to get in front of you?

JM – I’ve had a whole bookcase of rubbish books, business books, coffee table books with images of slums – these don’t work very well. I have been offered a three day cruise and been invited to a dinner to celebrate the opening of an office – where it was just myself and five lawyers. One of the most satisfactory relationships I had was with a lawyer in a small firm who used to say to me, at the end of a transaction and before posting the bill “What do you think it was worth Jon?”
JP – If you have done your homework and call me. Lots of emails don’t work. If someone calls with a compelling proposition I will be thinking “How can I find some work for this person?” What is it that you have that is unique to offer – a very qualified lawyer with no trimmings, someone with a lot of experience, someone who can get on with the project who knows your organisation well and can be up front and commercial. We’re looking for value.
KL – When a person contacts me and they know what I am interested in and have some of value for me.

Q: Do you think that next year’s LSA will have an impact on relationships?

JM – I can’t see people investing in law firms. If you take the cash out of a law firm, the troops will be less well paid. The accountants tried it and it just about worked (although one recently went bust). I don’t think it would be a stable model. Perhaps where a firm is just processing low end work it may. But the bulk of law firm work would not operate well with external shareholders.
JP – I am of the same view.

Q: Returning to the fees question?

KL – Most clients are financially astute. You need to be open – if the fees are discussed up front and there is open discussion then there are no surprises. But often fees are not transparent – projects move quickly and then is no opportunity to alert the client to the changing costs.
JM – Early notification. Unlike the construction industry, the professions have a love of extras. I want firms to admit if they make a mistake and a reduction in rates is the best form of apology.

Q: Has any firm ever provided a startling insight?

J – Some have tried – but they pitched it badly. Telling a client that they are wrong at a pitch is wrong. The best insights are from advisers who are working on a job – we have had some very good advice and solutions. We remember these occasions and return to those advisers. There was one firm who had a young associate who proposed a quick and easy solution – it was a brilliant idea.
JM – It’s rare. I just want advisers to recognise my needs. If they can offer some better ideas – for example in tax, that’s fine.
KL – I am always interested to hear what others in my industry are doing…

Q: What are your views on professional firms’ marketing?

JM – It means very little to me. Entertaining doesn’t make a difference to me. I just want the basics – field good people, show your credentials, perform well and set the fees right. One firm had a partner who failed to recognise that he had been at the same school as me.
KL – There was an awful situation where a potential supplier sent two people in to a panel of 15 – the presenter who was speaking was really good and clear but the colleague started to fall asleep. When architects and designers present they always come along as a team. The problem is when those who present are not those who are actually going to do the work.
JP – Technology let one firm down – they didn’t know how to hide slides and kept turning the machine off. Lawyers need a lot of help selling.

Q: Should professional firms invest if professional sales people?

JP – I tried to find a lawyer online for a mediation in a niche area. I received a call form the marketing director and we had a good conversation – they followed up with a pitch.
JM – Too many sales professionals can be a turn off. Probably what we want is a client relationship person. Quality control calls after a transaction are appreciated. It is important that whoever was at the first meeting remains in touch.
KL – I want to see who will be working with us

Q: As people buy from those they like, how important is rapport?

JM – If that were the case, no one would ever hire an actuary! Body language, words and attention are important. People playing with their Blackberry is a turn off. I need people to show that they are interested – with eye contact. Empathy isn’t essential but respect, interest and communication are. And no matter how much rapport there is there can be no “rapacious charging”.
JP – I know a number of litigators – and divorce lawyers – that I wouldn’t want to spend time with
KL – Research indicates that we must engage with people on any number of levels as an individual

Q: When you put work out to tender, how do firms prove they provide “added value”?

JP - This is partly due to culture. Access to their library and training is fairly standard. Seminars are helpful – partly for the networking opportunities and also the opportunity to learn – at a high level – for example, with a good economist. These sorts of events impress me.
JM – On a particular topic – for example, corporate restructuring – three or four people from our side and three or four from the advisers over a bottle of wine to consider what can we do that is different. Obviously not charged for – this is easy and good to arrange.

Q: Do you have any views of firms’ web sites?

JP – Mostly I am looking for the telephone number of a particular specialist. I don’t want to see shots of exotic premises.
JM – Email and telephone details.
KL – In property we are used to more visual stimulation and like to see previous projects and case studies.

Q: What do you think of subscription web sites?

JP – I would pay others to do the research
JM – Most of the information we need is there for free

Q: What are your views on low balling fees?

KL – If it’s very low it will sound warning bells. We would worry that the firm might come back later and ask for more. Or we may suspect that they will field junior staff.
JP – If it’s comparable service then we will go for the lowest price.

Q: So how do you choose which firm?

JM – Back to the basics – are the people able? Do they have the time available? Are they competent? Does it provide value for money? All the other aspects – fees, physical environment, quality etc are secondary.
JP – Fees are not the determining factor
KL – The relationship and chemistry is important – you need to know that the teams will work well together

PM Forum Conference – Laurie Young on “An alternative to commoditisation” and Andy Bounds on selling skills

Each year I go along to the PM Forum Annual Conference although this year I was co-presenting a workshop session with Peter Abraham of e-consultancy on “Using social media in (new) relationship development” pursuing our interest in social media in the role of selling in the professions (We are producing a white paper on this topic shortly and will blog separately).

The first two plenary sessions were presented by Laurie and Andy and I thought I’d comment on a couple of the points that they made.

Laurie Young – Attracting high margin mandates

Laurie explored how some firms (e.g. McKinsey, Goldman Sachs) managed to rise above the bun fight of commoditisation and fee pressure to keep their margins high. He suggested that the common factor was “explicit reputation management which keeps cost-of-sale low and price high” and personal franchises. I liked his observation, I think he said it was from The Economist, that “much thought leadership is in fact thought followship”. He outlined the beginnings of a model for high margin strategy which included:

• Reputation and client service stimulate demand pull
• A personal franchise, a point of view and senior level access
• Eminence, fame and mystique (creates familiarity and aspiration, don’t give away the family silver, you cannot market yourself and choose who not to deal with, it defines you)
• Track record and heritage

Andy Bounds – The best, simplest way to generate fees

Having won “Britain’s Sales Trainer of the Year 2009’ and author of best seller “The Jelly Effect: make your communication stick” we knew Andy was going to do a spectacular presentation. What he did was to take a simple, well known sales tip (the need to translate features into benefits by answering the question “So what’s in it for me?”) and create an engaging and compelling session.

He pressed home the point about how awful it is for sales pitches to start with a long introduction that is inwardly focused with some graphic examples. He suggested an interesting approach – use a blue highlighter to identify all the statements in a proposal about your firm and its offering and an orange highlighter on all the points about the benefits to the client.

He then explored the four different memory preferences – primacy, recency, repeat and outstanding and finished with a reminder that “facts tell, stories sell”.

Get things in perspective

I usually reserve this blog to write about work related issues but I am making an exception.

Earlier this week a senior partner at a firm I work with calmly and without drama announced that a close family member was attending tests for a life threatening condition the next day. We were all taken completely by surprise - both at the shock of the awful announcement and the composure of the partner.

He sent a short email subsequently to say that whilst it was not the immediately life threatening condition feared, it was degenerative and life limiting. We were all humbled by the way he accepted with good grace the awful prognosis and thanked us for our support.

It just made me want to remind everyone that whilst careers, work, money, deals. projects and markets are important - actually, facing the prospect of premature death puts it all in perspective.

So take some time out NOW to be with your loved ones. For they, ultimately, are what it is really all about. And sacrifice, please, a few of those potentially billable hours to enjoy some of the simple pleasures we often miss each day just in case life rudely and cruelly interrupts.

A day in the life of an office agent

The Evening Standard Homes & Property section runs a regular feature called “Diary of an Estate Agent” seeing life through the lens of those selling residential properties. But I had to spend a day with some real life commercial property agents last week to gain a bit more insight into the firm E A Shaw with whom I work on a regular basis.

My day started at the alarmingly early time of 8am when they have their weekly team meeting to go through all the work projects they have running both in their two key territories – Southbank and Covent Garden/Holborn (Midtown). Happily, they had provided coffee, croissants and pastries from the local coffee shop to ease the shock of such an early start.

Meeting promptly over and I was off out with one of the partners and a young surveyor. We took a taxi over the river to meet with an asset manager from one of their development clients to take a peek at four small offices on one of the floors above a rather prominent pub not far from London Bridge station in the shadow of the rapidly growing Shard. The asset manager was keen to hear the views on what rents might be possible depending on the extent of some planned modernisation works and to assess whether to keep the units separate or forge ahead with more substantial works to remove some non structural walls to create one large office space. Interesting discussion.

We returned in a taxi back to the office in the heart of Covent Garden. After a few minutes to catch my breath (and an extremely fast cup of coffee) I was out with an associate and another young surveyor (conveniently sharing the same name as the one who had come with us to the South Bank) as we walked briskly down towards Red Lion Square where nearby, in New North Street, was a self contained and rather lovely split level office that is likely to come onto the market in a few months. After a quick tour we spent a little time thinking about where best to place the letting board so that it could be easily seen.

And then we were off again, striding across the roads to reach Great Queen Street where there is an impressive marketing suite for New Brook Buildings. The newly refurbished reception area was really impressive and the large floor plates of the available space were light filled and super modern.

I didn’t make it back to the office as I was handed over to another agent – this time a woman – who had just collected the keys to show me around one of the firm’s most impressive developments – St Martin’s Courtyard. Whilst I have walked up and down Long Acre about a zillion times, I was struck by how different Slingsby Place now looks. The newly pedestrianised pavement sits between the freshly cleaned façade of Banana Republic on one side and another impressive retail outlet on the other.

Whilst there is still some construction works here it is clear that this will be a beautiful area – similar in style to St Christopher’s Square over in the West End. There is an incredible blue and silver design on the front of what will be a restaurant which overlooks a small square of what will be some rather select retail outlets. The extensive development (a joint venture between Shaftsbury Estates and The Mercer’s Company) includes some commercial office space as well at number 10. There are achingly new bright modern floors with those really attractive skylight windows which shout “media company headquarters”. Oh to work in offices like these!

Dragging ourselves away from such a lovely environment, we returned to the office. At this point we parted company as I had agreed to meet with a colleague at nearby Holborn to talk about her new business venture. The agents were heads down in deep conversation on the phone or tapping information into their PC screens. But I returned again towards the end of the afternoon for a full meeting of partners where numerous firm-wide initiatives were discussed. It was buzzy.

The office agents were still running in and out of the building and talking non stop on the phones to clients, solicitors and other agents as I slipped away around 530pm to get to an evening meeting on the other side of town. How do they maintain such energy levels? Mind you, I can think of a lot less appealing ways to earn a living than walking around the amazing properties in Covent Garden, the West End and South Bank. If only I would be happy to part with my high heels on a permanent basis…

Prices of accountancy firms falls

In the Accountancy Age TV video this month (I recommend that you watch it) they discuss why the value of accountancy firms is falling – with some generating less than one times turnover.

The main reasons cited for this are:

- The predominance of “lifestyle” practices
- Poor quality staff – without the necessary skills and drive
- Poor management of WIP (possibly due to long standing client relationships)
- Succession issues
- The younger partners not interested in buying the firm
- Inadequate pricing plans

What is shocking is that these are not new issues – they have been known about for a long time. The fact that the recession did not jolt firms out of their complacency and old ways is really quite shocking.

PS On another matter entirely, interested to see that PricewaterCoopers finally changed its name to pwc – I remember the financial press suggesting this when they first merged all those years ago!

Professional selling tips

Talking with some accountants the other day about their recent sales experiences reminded me of a number of tips for more effective professional selling.

Continuance or progression? - These are important concepts for those who have contacts that they see on a regular basis but find, rather frustratingly, that they are not going anyway in terms of selling. Basically, when you just continue to see people but without progressing the relationship towards an eventual sale then you need to do something different. Maybe it is to pluck up the courage to move the conversation into a different area, or to ask a key question relating to some potential opportunity or perhaps it is to try and meet someone else in the decision making unit.

Decision making unit? - This well known concept identifies the different roles that people play in the buying process. Sometimes, people find themselves in a continuance relationship because they are dealing with a gatekeeper who does not have the authority to buy and is restricting access to the real decision maker. Other times you may be in contact with the buyer – as often the case with a Finance Director or purchasing professional – who is unlikely to act without approval from the effective decision maker. Sometimes the person is not directly connected to the buying process but is a powerful influencer on the decision maker or who can act as a sponsor to help you learn more about the organisation and introduce you to the decision makers. Other times the person might be a user of the service but who is removed from those who have the ability to make purchase decisions within their remit.

Grading contacts – If you have a lot of contacts where you are trying to cultivate relationships and identify opportunities, it helps if you periodically review them all and grade them in terms of factors such as the attractiveness of the potential work, the time horizon over which it might convert or their importance in terms of referring other work. This will allow you to decide the frequency with which you contact them and/or whether they receive general alerts to keep you on their radar or whether you should invest your precious time in making a more personalised approach. Sometimes you might devise a list of filters (things that increase or decrease their attractiveness to you) and triggers (things that indicate a change in circumstances that might indicate an opportunity is imminent) to help with the grading.

Trial close – Sometimes you wonder whether it is worth pursuing a contact that you have known for a while but where things don’t seem to be progressing. In sales parlance, you could try a gentle “trial close” – along the lines of “bearing in mind what we have discussed, and assuming that such an opportunity arises, how would you feel about trying us out for this sort of transaction?”. Their reaction – especially the non verbal one – should provide you with insight into their sincerity.

A note after meetings – After an informal meeting, it really helps if you drop your contact a short email summarising the main points you have discussed. This provides them of a reminder of your conversation and an easy way to communicate your discussion (and thus raise your profile) with others in their organisation. If the discussion provided an opportunity for them to explore and scope a challenge they are facing, then the note will act as a handy aide-memoire for them and be a subtle reminder of your expertise in the area.

Current opportunity? - Sometimes you are in touch with the right people in the decision making unit but there is no reason for them to change advisers or appoint new ones. Whilst it is good if you are skilled enough to either uncover or create the motivation to buy now, sometimes inexperienced or impatient people may ignore a relationship because there is no immediate opportunity – possibly losing out on opportunities in the medium and longer term.

Free advice? - Sometimes you have contacts with whom there is a good relationship but where they are constantly seeking “free” advice but without showing any indication of actually appointing your firm. Obviously, you need to take a commercial and professional view about whether you continue to provide freebies – but sometimes you can trade such free advice in exchange for other things – such as introductions to others in the decision making process or for more information about the organisation and its long term aims or even a meeting to discuss another issue.

Keep in touch – While most people will be disciplined enough to have put good contacts on their database so that they receive regular updates and bulletins, the real skill is in knowing what the contact is really interested in and taking the time and effort to send across snippets and articles that relate directly to something of interest to the contact or the contact’s organisation. Natural empathy and skilled questioning will reveal those areas so that you can then set up alerts or watch developments through social media channels to help you identify things that might be of interest to them.

Add value at every occasion – One of my golden rules is to always aim to provide some value to the contact at each interaction – this could be with some information about their market, some ideas that might help them with an unrelated issue or simply some news about new developments that might impact their organisation. Where you are in a situation where you must sustain regular contact over a long period of time, the fact that you always provide some value means that you are unlikely to be declined when you request a catch up call or meeting.

What are your favourite tips for more effective professional selling?

The UK recession – is it over?

From what I see at the numerous legal, accounting and property firms I work with it would seem that the recession is over – most firms appear to be enjoying an increase in work and thus income. Yet there are mixed messages about growth in the commercial and residential property markets and the media is again carrying warnings about the potential of a double dip.

So it was with interest that I read through the HSBC Economic Outlook (Summer 2010) to try and gain a more objective view. Here’s the key points:

The global picture

• The global economy is growing at between 3-4% this year and next so it would appear to have emerged from the negative growth of 2009
• Yet the advanced economies of US and Europe continue to struggle while the emerging economies are enjoying robust growth rates.
• The Chinese economy is once again generating rapid growth – with GDP expanding close to 12% this year.
• India, Brazil, Indonesia, Russia, South Korea and Turkey all expanding at a brisk pace too
• Euro countries largely facing austerity measures – possibly tipping some back into recession
• Switzerland, Sweden and New Zealand never ran big deficits – Germany now has a surplus
• Canada, Australia and Norway are enjoying export led growth
• The problems faced by Greece appear to have spread to Spain and Portugal with Ireland, Italy, Belgium and France in the spotlight
• There are concerns in the US where the administration passed another stimulus package – it’s deficit (at 10% of GDP) is as large as those in the Eurozone

In the UK

• The UK increased its spending by 36% in the five years but received only a 12% rise in income – the UK was living beyond its means
• The Government’s debt interest payments will account for 6% of Government spending this year (at £44 billion this is more than expenditure on defence and twice as much as on transport)
• .3% increase in GDP during the first three months following the .4% in Q4 confirmed “that the recession is finally over” but pace of growth remains short of the “business as usual” trend rate
• Consumer spending – accounting for two thirds of final spending – made a disproportionate contribution to growth before the recession but by 2009 consumer debt reached £1.5 trillion and the debt-income ration rose to 160%. Saving/debt reduction is now the priority.
• Gordon Brown’s key ration (national debt at 40% of GDP) exceeded by over a half and will exceed 70% before it starts to decline
• Unbalanced UK growth (reliance on consumer and Government spending) to 2007 is felt to have pushed the economy into recession rather than the credit crunch. Recovery needs investment and international trade.
• Office for Budget Responsibility shows economy recovering this year and next and then growing by a healthy 2.7%-2.8% from 2012-2015
• The Bank Rate is expected to rise to 1% in the first quarter of next year and will end 2011 at 2.5%
• The Emergency Budget and the announcement of £6 billion spending cuts will be followed by a third instalment – the major spending review – in October. Job losses that run into six figures from the public sector are anticipated and the impact in the Midlands and the North are expected to be severe.

So what do we make of all that? I guess that whilst we can be cautiously confident that the worst is over, we will have to wait to see the impact of the Government spending cuts, the January VAT increases and other tax changes before we know for sure. And that could take another six months or so.