Tag Archives: competitive advantage

Secret Entrepreneur Weapon

In a January 26, 2012 article for Entrepreneur magazine (Mentors: A Young Entrepreneur’s Secret Weapon) Adam Toren writes,

…to take advantage of the most powerful weapon an entrepreneur can have, find a mentor.

A good mentor helps you think through a business idea, suggests ways to generate that startup capital and provides the experience and savvy you’re missing. You’ll get praise when you deserve it and a heads-up when trouble comes — probably long before you would have noticed it yourself.

Instead of mentoring, many entrepreneurs “hang out” with peers, attend fun/trendy events for start-ups, and make presentations at conferences and forums. While there is a place for many–if not all–of these activities, they do not take the place of a relationship with someone who has knowledge or expertise in areas that are not your own strengths. Often, the mentors even know of others who can be helpful in additional disciplines so that you are able to become surrounded with wise counsel and advice. EntreDot is a mentoring organization that has seen the need for this type of service and is creating and implementing programs via innovation centers and in conjunction with strategic allies to foster entrepreneurship in the Raleigh-Durham area of North Carolina.

Entrepreneurs — especially young ones — tend to tap their friends for business advice. But that can be a mistake. The reason is, friends tell you what you want to hear. For what you need to hear, rather, a mentor is often a better bet.

A mentor could be a professional who advises entrepreneurs for a living or someone working in a related industry who is willing to help you. And unlike your friends, mentors are typically more removed from you and your business. So they tend to be more comfortable delivering bad or critical news and advice. And since many of them have either started up businesses in the past or have worked in industries that you’re trying to shake up, mentors can also fill experience gaps, as well as impart their wisdom on how to handle specific business challenges.

The above quote was taken from another article in Entrepreneur magazine, this one by Martin Zwillig last week (A Good Mentor Will Tell it Like It Is). The gist of his insight is that mentors can come from a variety of backgrounds, but their key role is to warn you of missteps rather than cheer your every decision. The good mentors can help you identify steps to success and stand by you to follow them when challenges would distract you from executing your plan.

Zwillig concludes by suggesting 5 Qualities That Are a Must in an Ideal Mentor:

  • Pragmatism.
  • Fortitude. 
  • Stamina.
  • Connections.
  • Perspective. 


Hope you are successful in putting your own secret weapon to strategic advantage!

 

Put Your Money Where Your Mouth Is

Do your customers feel like you have “skin in the game?” Many times the answer to that question is not an affirmative one. Professionals who bill by the hour or some other common fee arrangement are perceived by their clients as making money whether the clients do or not. Ad agencies, law, CPA, architecture, engineering, consulting and advisory firms all face this uphill battle to demonstrate their understanding of the client’s economic model while simultaneously delivering a service of their own at an acceptable profit margin.

Take the advertising world as an example. The old model was charging clients a percentage of the paid advertising spend. When clients pushed back against the pricing model as a disincentive to do necessary promotion, some agency execs switched to an hourly billing model. There was a disconnect under this model in terms of quality and outcomes. Jaynie L. Smith describes the migration to a new model by Andy Berlin, co-CEO of WPP agency Red Cell this way:

     He stunned advertisers and agencies alike at (a) management conference of the American Association of Advertising Agencies by suggesting a radical change in the way advertising is priced. It boils down to pay for performance: The better the ads do for the buyer, the more the agency gets paid.

     When you stake your claim on your own ability to come through for the client, you and your firm take a calculated risk. Doing so will transform your service delivery model. No longer will “good enough” be acceptable when the client’s success is the focus. By making the client successful, your firm becomes successful as well. Getting your people to make the cultural shift to this paradigm will require strong leadership, courage, and perseverance.

You carve out an enduring competitive advantage when you are bold enough to depart from the strategy of the category killers and pursue client focus and concern. Differentiation on your own terms rather than price or something that undermines rather than builds up your company’s financial position is good business!

To have “skin in the game” means to have greater commitment than anyone else. Show your commitment to your clients by going above and beyond the call. By letting them know that you won’t get paid unless they receive what they seek, you have told the clients that you have their backs–that you are watching out for what’s best for them. That is unique and sustainable and gives you the ability to win people over with whom you would like to do business.

Legal Marketing Stats–How Do you Compare?

In surveys by organizations serving the law firm industry, one of the areas studied is marketing activities and spending.

Utilization of Marketing Tactics

Historically proven marketing tactics (yellow pages, legal listings, and client entertainment) are giving way to more focus on Internet-based strategies (Web sites, Search Engine Optimization [SEO],  paid search advertising, blogs, and newer forms of social media) to grow their practice. Firm size drives decisions as to what degree various marketing tactics are utilized. Smaller firms are most likely to use yellow pages and legal listings, but larger firms are more likely to rely on client entertainment. However, while client entertainment is still the leading choice among firms with 11-20 attorneys, it has been dropping off as a primary tactic. Web sites remain the preferred means of marketing over a multi-year period.

Significance of Internet Marketing

Law firms continue to use the Internet to promote their practice, and are using the latest techniques to attract potential clients. Search engine optimization increased throughout the period of 2005-2010. Additionally, more firms began using online legal sites to attract clients. Blog use soared during the same time period. This reveals a latent desire to explore new methods in addition to traditional tactics to attract potential clients.

Perceived Value of Marketing Tactics

Networking and word-of-mouth continue to be integral to building a law practice; however, online activities are also prevalent in integrated marketing campaigns. Web sites and related tactics are considered a primary marketing tool for growing a firm’s practice, and more money is allocated towards this tactic than ever before. Though blogs have been on the rise in efforts to develop clients, it should be noted that very little revenue is allocated towards this activity (1%).
While face-to-face interaction with potential clients is still important, client entertainment is decreasing in its value to attract potential clients, and less money is being allocated towards it than five to ten years ago.
Who Does the Marketing?
Solo practitioners increasingly use outside consultants and administrative staff members (office managers, assistants and secretaries). Mid-size firms (2-5 attorneys) have also increased their reliance on administrative staff members.
Larger firms (6+ attorneys) rely less on marketing consultants and more on other staff members, including marketing managers and related positions.
How Big is the Marketing Budget?
In relation to firm revenues, about one firm in four spends less than 1% on marketing activities. Interestingly:
  • More firms with 11-20 attorneys skimp on marketing than solo practitioners and smaller practices.
  • 39% of solo practices spend over 5%
  • 27% of practices with 2-5 attorneys spend over 5%
What does all this information mean to you as an attorney? I suggest the following:
  1. When small, spend bigger (%-wise)
  2. As you grow, curtail the spending (by %), but spend more wisely
  3. Look for Internet-based marketing strategies to fuel your growth
  4. Decrease your reliance on (but don’t do away with) client events
  5. Explore blogging and social media–either through in-house or contract resources

Rainmakers Outperformed By Personal Marketing Plans

Fundamentally, successful business development occurs when a professional has superior understanding of what a target client needs. To arrive at such enlightenment, the service provider has honed time-tested skills. The most successful ones have been very deliberate and intentional about the emphasis placed on the soft skills that wonderfully complement the technical acumen. In times past, such requisite skills for success were imparted through mentoring. However, the pressure to generate greater billings and profits today distracts mentors from their charge.

                Why not outsource a mentor like other business functions have been outsourced? In fact, why not become very specific and outsource a business development mentoring service that teaches your staff how to become inspirational? If succession planning is about identifying capable replacements, preparing them to assume a more executive role and helping them earn the following of others, then organizations should pay more earnest heed to it! Within the preparation of staff for leadership, it would be argued that business development is not learned through osmosis (years on the job). The skillset that makes one inspirational/capable of developing business is definable.

Inspirational employees are respected, admired, and well-known. Let’s say that respect means that one is competent, as evidenced by subject matter knowledge, a displayed ability to lead others and self-controlled. Admiration may then be construed as being expressed towards those who are consistent, fair and care about the well-being of others. One cannot be inspirational if no one knows in what context, how often, in what ways and to what constituency the inspiration is directed.

Do your employees have a plan to become respected, admired, and well-known? To refute the counterargument that some do not aspire to become well-known, I simply posit that unknown service providers do not enjoy the opportunity to serve significant clients. As for the aforementioned plan, we have heard of personal development plans (PDP). If the PDP is meant to address one’s emotional intelligence, then what plans are in place to help staff:

  • Become a subject matter expert?
  • Learn how to discern client needs?
  • Become referable?
  • Network more effectively?
  • Promote their personal specialty?

Savvy service firms empower their key staff to become inspirational leaders by helping them to produce a Personal Marketing Plan (PMP) that includes the PDP and the items listed in the bullets above. The PMP becomes the backbone of a succession plan, onto which other ligaments, tendons, and muscles familiar to HR executives can be attached. It is probably best developed by an outside third party who has no emotional ties to anyone internal to the organization and can objectively help staff develop and implement the Plan.

Organizations that are serious about the PMP have multiple Rainmakers and a system to produce more. Performance objectives and compensation systems can then be tied into succession management as all share the responsibility to grow personally and corporately.

Let’s become inspirational!!!

Personal Marketing Plans Outperform Rainmakers

Organizations that depend on their staff to only fulfill orders are short-sighted. Whether those orders are for products or services is not the issue; how they are sold is what is critical. Let’s assume for the moment that products are sold through a variety of sales channels and that services are primarily sold face-to-face. It is not uncommon for the services organization to have an aversion to using the term “sales” because it seems transactional. So, in an all-out effort to avoid being “salesy,” cloaked in a mantra that one’s organization is only concerned with great customer service, services firms create a culture that is averse to engaging new prospects.

There are, however, exceptions to most every business “rule” or stereotype. Enter The Rainmaker. The Rainmaker is both the organization’s greatest asset and liability. Employees understand that the creation of need for their intellectual contributions is usually a feat reserved for The Rainmaker. With considerable aplomb, this individual networks with ease, establishes strong referral networks, is well-known and is most appreciated by those who have a fear of ever being asked to copy what she does.

                When organizations rely on The Rainmaker—be that one or multiple—to generate enough work for everyone else to be paid competitive wages regardless of whether they ever successfully bring in a new account, they create a long-term liability. Like the temptation to live large off credit cards today in one’s personal life or to distribute earnings and share profits but not reinvest into a business, this practice of overreliance on The Rainmaker is precarious. Reckoning Day will arrive and most organizations realize that they have created a monstrous succession problem. Some are successful in delaying the inevitable by hiring a business development professional (read: salesman in any other context) who augments current revenue growth, but is not a viable replacement of the DNA of The Rainmaker, who is usually a 40 plus year old equity owner of the company.

Why is it that an executive who has strong technical skills is perceived as even more valuable when possessing business development skills? Is it because the firm administrator has calculated the number of employees that The Rainmaker can keep employed? While revenue generation and the ability to cover overhead expenses are important to success in business, this is not what sets The Rainmaker apart. Rainmakers are special because they inspire! The inspiration comes from fulfilled promises, a sense of hope and optimism and the ability to understand client needs.