The State of Selling Professional Services 2015

The State of Selling Professional Services 2015

Entering 2014 the news was generally gloom and doom. “Americans will earn less than they previously expected, that fewer of them will want jobs and that fewer will get them. They think companies will invest less and earn less. The economy, as measured by growth in real gross domestic product, will settle into a prolonged period in which it grows at an average rate of just 2.1 percent.” said the C.B.O.

It didn’t happen.

Economic trends are up. The US economy is the place to play in 2015 and the Professional Services market, where partners are paid for their knowledge and expertise, is poised to take advantage of the growth. With that in mind, understanding your value and properly communicating the value your expertise should be the focus this year.

What follows is my outlook for selling professional services in 2015. I’ll touch on 5 industries after I describe 3 topics that span all 5: Forecasting demand for services, Pricing services and working Niche markets. 

Forecasting demand is a competitive advantage

“It’s not possible for services businesses like ours to predict sales,” is common wisdom. Closely followed by “our junior partners aren’t entrepreneurial” and “so-and-so [target company] is a [big firm] client.” In 2015 this mindset needs to change. You can forecast your business, you can predict growth and your current team can get you there.

Every service will get continued pressure from offshoring, bump into the limits of traditional billing practices, and need to get creative with working capital management. Your firm’s ability to predict future project flow will be a competitive advantage and accelerate your firm’s value. It’s time to invest accordingly.

Pricing services to capture true value

“We charge by the hour because that’s what our client’s expect,” is a typical to my billing practice queries. That’s just being lazy. It’s asking your clients to value your expertise and determine its value without the benefit of your experience and intense knowledge.

Here’s the thing: solutions get their value from the problems being solved. Your team’s inability to accurately match the value of the solution to the value of the problem is the root of billable hours. In the near future it will be the firms that provide the most value to clients, do the best job of communicating that value and excel at charging accurately for that value will have a huge advantage and exponentially increase their firm’s intrinsic value. Again, invest accordingly.

Niche markets like aging Baby Boomers

“There are riches in niches,” said a McKinsey consultant to me many moons ago, and he’s right. In 2015 the baby boomers start to turn 70. They are living longer, hold more assets, and are putting tremendous pressure on elder care services. I felt it firsthand. My father just turned 70 and bumped into the mandatory distribution rule for his IRA. He said, “I don’t need it yet!”

Guess what? He needs advice. They’ll all need advice.

Take a look at your current practice and think of the value you can provide to this giant group. The last ones turn 70 in 2034.

These three trends – Forecasting, Pricing, Niches – are industry agnostic. Keep those 3 topics in mind as you hurtle through this year. 2016 will be upon us before you know it and chance favors the prepared mind.

What follows next is a quick spin through my favorite professional service industries. As you’ve heard me say: Try, Fly or Die. Adapt, Migrate or Perish. It’s the law of the jungle out there.

Accounting

This year you get to look forward to more offshoring; upstarts challenging “billing hourly in arrears;” a growing income gap between the business owners you advise/partners in your firm; and elders wandering around looking for help. The accounting industry, more than any other professional service, is inherently trusted by the businesses you advise. Your response to these industry challenges will be easier because of this trust.

Law

My attorney friends can expect to have their own issues with offshoring; flat rate pricing fixes that didn’t take because they weren’t tied to value; lead generation providers taking more and more from client transactions; and challenges with working capital management separating winning firms from the stragglers. The big 3 universal issues of Forecasting, Pricing and Niches are the key to success in the coming years.

Architects

A huge opportunity awaits architects and engineers as we continue to rethink the problems surrounding space and planning. Billing pressure’s continue as your building partners seek out a larger piece of the pie and take capabilities in house. Determining the value of intangibles becomes more and more important in order to stand out. Elder care takes up more and more resources. The firms that can re-think how they communicate their value will separate themselves from the pack.

Healthcare

The battle over Obamacare continues and offers a continuing opportunity for concierge care to stand out. The elder care as a growth industry banner that’s been waved for decades is here and there’s a huge opportunity in using remote care and telemedicine to help. Working capital management will determine a firm’s ability to position themselves for growth and money is flowing into the space in response. Get best practices in order and borrow heavily from what’s working in other industries.

Software consulting

Technology purchasing power has run from the IT department out to the rest of the organization and it’s exposing value added resellers inability to recognize the full value of their solutions. (ironic given their title, I know) Partnering based on the value these technology solutions bring to the table is changing the game going forward. Get better at building and communicating business cases across the entire organization in the coming years.

That is what’s happening in 2015.

You’re here in the USA and our economy will continue to attract investment from around the world. Service drives our economy. The art of business development will continue to be a differentiator in this shrinking world space. Robots and computers are masters of the law of scarcity, so spend your time working the law of abundance.

Good stuff.