Differentiating your IT Services Menu
(This article was a collaboration between Robert Hamilton and myself)
It seems every week we talk to just another IT services shop trying to kick-start their marketing and sales process. We sit down with the founder and ask the same question: “so how are you different from all the other firms out there?”
When we ask that question, we get the same answer: we have a global delivery model, we are client centric, we put people first, we are domain experts and/or we really understand our clients.
Woop do flipping do. Welcome to the club. With those credentials, you are beautiful and unique, just like everyone else. Your competitors have the same answer. They have a global delivery model, they are client centric, they put people first, they are domain experts and they really understand their clients.
So if you are just another IT services shop, what do you do when it comes to answering the question: “so how are you different from all the other firms out there?” How do you differentiate yourself in the undifferentiated world of IT Services?
There are really three interrelated ways to answer that question. All three answers build on each other and are critical to each other. But explaining all of them here would take too long and is beyond the scope of this post.
The first answer is “trusted customer relationships.” We believe this answer is most critical, actionable and more important and therefore will be the basis of this article. The second answer falls into the camp of messaging, positioning, and defensible-niche creation. We’ll discuss that answer in the next article. The third answer comes at the question from the inside-out perspective – company culture, decision making process, and internal trust. Again, this is a topic for another article.
Trusted Relationships and Hunting Big Accounts – the founder’s problem of scale
Say the word “trusted customer relationships” and many definitions and meanings come to mind. Each definition has a different context. In this case, we need to be very specific about context and so we want to talk about a very specific scenario.
In our work with professional services firms in the $1 to $5 million/year revenue range, what we generally see is a founder who has left a senior Fortune 500 IT position to start a company. As a first customer, the new entrepreneur lands his account by selling services back to his former employer – a whale (a large farmable account capable of more than $1M annual billings and a well known brand or reputation).
In this scenario, other than a trusted relationship, there is very little that on the IT services menu that differentiates the IT services shop from the competition. Aside from marginal differences in talent, culture, expertise and methodology, almost every other $1M to $5M competing IT services firm can do a job as well as any other.
So when we talk about trusted customer relationships, we’re talking about founders who are friends with their new clients. They have leveraged a deep pre-existing relationship to become entrepreneurs. This relationship was built over many years through interaction, integrity, success/failure, transparency and consistency.
Because of the relationship, the founder brings speed and nimbleness to problem solving. This is due to the fact that he or she has an intuitive grasp of the project goal (i.e. benefit to the company) AND the culture’s style of generating support for the goal AND the culture’s preferred style of organizing execution toward the goal. Together all this means a relationship that is hard to duplicate.
The problem of scaling this kind of relationship begins when the founder wants to find another major whale sized account that is just as profitable and farmable as the first major account.
The entire problem for finding the second whale is creating what was “second nature” with the founder’s former employer. How do you replicate in the selling and marketing process the relationships that were created over time through interaction, integrity, success/failure, transparency and consistency?
The answer (and the currency by which the trust is established, earned and scaled) is USEFULNESS.
In sales-processes, the conversations, the relationships, the personal network and persuasion have always been the de facto currency. If people buy from people and if a brand is really the sum total of a customer’s interaction with a company, then it follows that in B2B, the personal brand of the founder is really all that matters when it comes to finding the next whale.
And, if you accept the fact that, for IT services firms of this size, the definition of a successful marketing and sales campaign could be the addition of one new whale per year. In this context, the sales and marketing discussion takes on an interesting new perspective.
The web and social media did not create the idea of a personal brand. Leading with value and emphasizing relationship value over a quick-transaction have always been the hallmarks of successful professional services organizations.
The only difference that social media makes is that the technology finally got granular enough and accessible enough and instantiated enough to be useful in facilitating this level of the ageless human dialog of value exchange.
The tendency of people to become known through repeat encounters is as old as walking upright – and establishing a brand of credibility and openness to repeat transaction is earned by being accessible and broadly useful to the challenges prospects face – across the whole lifecycle of the problem solution.
Unfortunately, many founders of professional services organizations somehow got disconnected from this simple truth. You can see this in their marketing departments – day after day churning out me too SharePoint webinars with co-op Microsoft funds. If everyone is using the same campaign materials and selling the same products, then there is no differentiation.
For that and many other reasons, a dedicated emphasis on personal branding may overlap and replace some of the “traditional” tactics in marketing’s tool chest. The highest value of these personal branding activities is how they reach past the product attributes and into the underlying human issues beneath the problem the prospect company is experiencing.
Professional services marketing needs to take the next step to scale personal branding. Marketing’s ability to speak to, or at least package the pitch, to speak to this broad set of human issues feels like the leg up that the sales organization needs in order to stand out, be remembered, and be valued as sources of solid thinking, not just products. Again, before trusted advisor, before regular meeting, even before someone recognized your name comes USEFULNESS – which we believe is the new universal of finding and growing a business through new sales.
At first, this approach is not a substitute for the “core” business building activities. Over time, however, it will replace the shopworn marketing tactics that just aren’t working like they used to. Marketing will soon be measured by its ability to reach into the inner recesses of the decision process around every significant buying decision. The way buying decisions are made is so complex within major accounts that nothing other than pure USEFULNESS could penetrate the dialog.
Great sales people have always done this – communicated the solution when it was time, and then spoken in specific about how it could be sold inside by the champion, and how it would be implemented, and described the benefits that would accrue. Equipping the internal champion to carry the message further and generate some kudos for himself in the process is natural.
Tom Searcy, author of “Hunt Big Sales” says “People only buy what they can safely sell to others, or defend if challenged. Our job as whale hunters is to equip and train the buyers to defend themselves from the attacks that will come later.”
It is in such a discussion where you first get to cross over into the advisor role, almost coaching the internal champion on how to make the case succinctly for your solution. Not only is this valuable, but you quickly pick up other cues about the company’s comfort level with the disruption that comes with change, entrenched interests and some of their agendas, priority of the need against other investments the company is making, etc. These are exactly the kind of things that are “walking around knowledge” for the recently exited employee when he hangs out his shingle and sells services to his former employer.
In transferring this knowledge to new whales, over time, the more useful encounters you have with the prospect/customer, the more quickly you can get to equipping them to defend themselves and eventually co-own your goal. Co-owning a goal is not just implementing the solution, but helping your internal champion adequately share and evolve the problem and its solution.
Co-ownership is an exploration of how the whale’s culture generates appropriately widespread concurrence on this problem. How does it get on the priority list of problems to be attacked? How does the company’s culture establish resources for those sufficiently high-priority problems it decides to attack? What is the current decision-maker’s role in those deliberations about priority and resources?
When these questions are answered, THEN, only THEN can the sales machinery begin sketching a proposal that speaks to prospective solutions AND how to help steer consideration of those solutions through the company’s internal machinery, equipping the current decision-maker to advance the dialog, not just show a product list and price sheet from a vendor.
Trying to short-circuit this natural process is much like getting married on a first date. It only happens to a lucky few.
The sales process must itself be value-add if it is to stand out from the competition’s. As satisfying as it would be to sit in a prospect’s office and take an order, most substantial-dollar transactions cast a 6 to 18 month shadow in front of them. Helping with the decision dynamics of getting your solution chosen is a way to equip your internal champion, to lead with value, and to stand apart from the show-up-and-throw-up types.
In our experience working with IT services organizations, the one true differentiator that separates one IT services firm from another is the relationship it has with clients. Unfortunately, this aggregate concept is tired, shop worn and not even a memorable cliché.
Yet, if the personal relationships of the firm are the true differentiator, then the co-ownership of problems that keep the project on track, on the priority list (to preserve resource allocation) and interim results appropriately socialized to maintain support. These dimensions are what is inside the “relationship” concept and the goal of ever more familiarity is ever faster grasp of the goal of co-ownership.
The ideal scenario for finding the next whale begins with discovery of the client’s pain-points, or challenges, or problems – because then the dialog can begin about possible solutions. All too often, in the rush to “close the deal” we’ve seen too many founders jump straight from this discovery to an internal mapping back to his company’s potential products and services for addressing the prospect’s problems.
Instead of rushing to a solution, co-ownership should begin with fresh perspective about the issues surrounding the problems, the solutions, the challenges, the benefits, untethered to promotional push to sell the products. It’s the intellectual property that is related to the solution-provider’s area of specialty that can be scattered around like seeds, to find fertile ground wherever they can.
This really is where the payoff is when it comes time for the customer to source his next solution – it shows when the sales person gets the call telling him of the need, it shows in the degree of involvement in helping shape understanding of the need, perhaps even contributing to the internal defense document to secure funding.
This is far beyond “will the prospect know whom to call” when he needs something. In every case, the IT services firm that wins disproportionately is the one that has established trusted relationships with clients, possibly many years in advance of projects.
Recurring features of such a relationship include:
SKIN IN THE GAME. Perhaps this is better framed as alignment. Do you have skin in the game? Are your fees tied to the client achieving their project goals as well as their business goals? How closely is your success tied to the client’s success?
TRANSPARENCY. This is another component of co-ownership. When your profitability is aligned with the client’s goals, there is a level of transparency and trust built into the transaction.
RELATIONSHIPS. Invariably project success will involve interactions beyond just the sales person and the internal champion – to what degree does the sales person have relationships with sources of special knowledge or experience when helping refine a solution?
ACCUMULATED LEARNING. The essence of repeat-interaction is that no one has to start from a blank sheet to establish a baseline understanding of the challenge, the resources, the culture, the goals. The sales person with a trusted relationship is this “on steroids.” Not just having access to previous purchases, but having notes about issues learned while implementing the solution, technical notes, people notes, management hot-buttons, etc that broaden the reach of the internal champion as he navigates the project.
The items listed above, when appropriately investigated, can lead you to the answer of what is different. It can help you help the client mitigate risks (and in some cases share risk) as well as understand your critical thinking abilities.
If product specs, delivery times, rates, and service level guarantees are all very close and can be put on the IT “menu,” where can the differentiation come from? As all veteran sales stars know, the differentiation happens when youhuman beings finally make sense of chaos – when data becomes information, specs are aligned with goals, project timeline get fleshed out and dollars are allocated.
The IT Menu of services can be neat, clinical and rational; the messy part is in the eating. No one ever gets nourished consuming the menu.