RainToday Note: This article is part one of two. Here, Paul Collins discusses why a strong value proposition is important, what makes performance benchmarking a unique value proposition, and the five vital characteristics your performance benchmarking offer must include. In part two, he gives the six steps for building your performance benchmarking proposition.
If you have a strong value proposition, it elevates clients' minds away from price towards the overwhelming benefits your service provides, thus taking the brakes off their decision making and accelerating your sales growth. Is it easier said than done to produce a proposition like that?
Usually yes. But if you are open minded, there is an innovative and relatively quick way to make it happen by incorporating a "performance benchmarking" offer into your sales and delivery toolkit that enables three very important things to happen:
- The creation of an entry-level service that's easy to sell
- The opportunity to add on and sell more services
- The ability to measure performance improvement
I hear some of you saying, "Performance benchmarking is not relevant to my business." You may be right, but in my experience you'll be in the minority, so please put aside all of your pre-conceived ideas and go with the flow while I develop the idea with you and cover the following:
- Why a strong value proposition is so important for sales growth
- Performance benchmarking as a unique value proposition
- The five vital characteristics a performance benchmarking offer must include
In part two of this two-part article series, I will then cover the six steps to building your performance benchmarking proposition.
Why a Strong Value Proposition is Important for Sales Growth
Selling Professional Services is Typically Hard Work, Let Alone in a Tough Economy
In the professional services industry a common limiting factor to sustainable sales growth is the absence of a strong value proposition. The weaker the value proposition, the more costly it is to get marketing and sales results. This is where most firms sit; they have a "me too" proposition that does not stand out in the crowd.
Selling is never easy, but professional services firms make life harder by being undifferentiated and telling a complex story about an intangible service, requiring clients to commit large amounts of cash for benefits that cannot be quantified or guaranteed. In short, the offer is too indigestible for a prospect to consume.
In a tough economy such as now, it gets worse because unless you are able to show a return on investment in three or six months, doors will quickly close and prospects may decide that your cost is one they can do without.
The key is to present an entry-level offer that prospects say "wow" to, enabling you to deliver loads of value in a short period of time (one or two days) and demonstrating that you are an expert in your area, professional, and well organized. That's where performance benchmarking comes in. And if you can answer "Yes" to the following question, this is definitely something you can leverage.
Do you help your clients identify gaps and improve performance?
Performance benchmarking as a Unique Value Proposition
Whether you are a sole practitioner, in a $1 million firm, $10 million firm, or $100 million firm, your initial work in a typical engagement is probably some form of health check, audit, diagnostic, capability maturity assessment, performance assessment, or gap analysis of a process, capability, or system. It's done to identify the performance improvement potential for the client and to enable the planning and execution of change that will realize that potential.
This is probably true whether you work in business and management consulting in all of its forms (strategy, human resources, change, program, operations, financial, economic and environmental, marketing, BPR, risk, etc.), IT consulting, engineering consulting, tax and audit consulting, or almost any kind of consulting.
Performance benchmarking is a catch-all term, and you can substitute it with whatever words best describe the process in which you perform initial diagnostic work with your clients.
The Five Vital Characteristics in Your Performance Benchmarking
There are five very important components you must have in your performance benchmarking offer to make it a compelling proposition to your clients and prospects:
- Demonstrability—it must be available online in a professional and graphical format. This makes your proposition less ethereal and more tangible. It is accessible anywhere by you and your clients. You can show your clients exactly what the outcomes will be from the initial engagement. This makes it easier to sell and deliver with repeatable high quality.
- Well-Packaged Expertise—you can show your clients that your wealth of expertise has been organised into a cohesive and structured diagnostic that embraces all of the issues they face in the form of a certain number of topics, questions, and answers. It helps them to clearly see how good or bad their performance is on all counts within a one- or two-day workshop moderated by you. This entices your clients into an initial, low- or no-cost engagement that enables you to show the calibre of your knowledge and expertise.
- Change and Performance Tracking—once your initial workshop is complete, you have identified performance gaps and prioritized improvement actions, and your client has ongoing access to your performance benchmarking tool so they can change their scores and monitor their progress towards good or best practices. This motivates the client to make changes and increases his dependency on you over a longer term.
- Comparability—people have an insatiable appetite to compare their performance with others. Over time, as you roll out your offer, you will be able to show in graphical form how clients compare with one another—worst, best, and average. This will increase client perception about your depth of experience and add to their compulsion to buy.
- Value Measurability—it is usually possible to create an algorithm that links the output score in your benchmark to a value. For example, the output score for say a business continuity assessment could be in the form of a "risk factor" with a progression in 0.1 increments from 0 to 1. As your client executes recommended changes to reduce risks, he can see the effect of change in his risk factor. This opens up the possibility for you to link your fees to performance improvement.
Nearly all professional services businesses deliver some sort of gap analysis and performance improvement service to their clients. By packaging this up into an entry-level performance benchmarking service, you can create a very compelling value proposition that gets you more sales with less effort and time. If you think outside the box, you can also use it to measure results and make a link to the value you have created for the client.