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Lee W. Frederiksen, Ph.D.
“Cloak yourself in credibility.” That’s the advice Arun Gupta offered to start-up companies trying to gain traction with Venture Capital firms when he participated on a panel at the annual Venture Capital Outlook conference presented by Potomac Tech Wire last week. A partner in Columbia Capital and a very active player in the tech and services arena, Arun knows a thing or two about venture capital. And his comment is obviously right on point for firms seeking venture funding.
What struck me about his advice is how relevant it is to all professional services firms. You see, venture firms are betting on entrepreneurs to solve difficult problems. The same could be said of professional services buyers and the firms they hire. Credibility is the coin of the realm in both cases.
Arun had two additional comments that rang true. First, he emphasized the absolute importance of knowing and tracking the cost of acquiring a new customer. Far too few firms have any idea what it takes. If you don’t measure what it costs to acquire a new client, you will have a difficult time improving your closing rate. When you are armed with this information, you are in a position to accelerate investment when you discover a technique that works exceptionally well. For example, today I was talking with a client who was evaluating a lead generation program with a cost per lead of around $50. When I asked him what the value of a lead was, we calculated it to be about $5000 (average contract size multiplied by closing percentage). Who wouldn’t be interested in buying $5000 bills for $50?
Arun’s final point was to stop focusing on what’s hot today. If it’s hot today it’s too late. Your firm needs to be focused on what will be in demand in 2-3 years. How do you do that? Start by understanding trends that will shape the industry you serve. Then get in front of them. Easy? Not really. Can it be done? Absolutely. And the rewards for getting it right are very great indeed.
Filed under: Marketing, Professional Services, Technology Industry | Leave a Comment
Tags: cost of leads, credibility, venture capital
By Lee W. Frederiksen, Ph.D.
As you may know, Hinge conducts regular research on professional services firms and their clients. We are just finishing data collection on a national study aimed at identifying professional services firms that are growing fast, even in this challenging economic environment. The good news is that there are some impressive performers.
Today, I’d like to highlight one such company, a technology firm called Invizion. They operate in the GovCon space and are focusing on the security market.
Their top management team includes founders Steve Johnson, George Washington and COO Lauren White. Consistent with many top performing firms, these folks are experienced players with solid track records and experience.
In the interest of full disclosure, I should point out that Invizion is a client of ours. I confess that I admire this company, and I believe they would be successful even without our help. Why? We’ve researched professional services firms across North America. And based on our profile of the most successful professional services firms, Invizion does a lot of things right. Let me give you three good examples:
- They have brought on very high quality people, both employees and business partners. They spend senior management time and money to develop and maintain a carefully conceived corporate culture. This is very important for a company with a widely dispersed, culturally diverse workforce — a characteristic shared with many government contractors.
- They understand that their brand has to reflect their strategic focus. Like many high performing firms, they are clear about how they want to be perceived — and they do what it takes to support that perception. From website to office space to choice of teaming partners, they push for consistency. It’s not easy to refocus a high growth firm, but a well-calibrated brand helps keep high performance firms at the front of the pack.
- They are willing to take calculated risks and innovate. These initiatives build on core strengths and reinforce their brand positioning. Many companies are content to play it safe in an uncertain economy. But playing it safe comes with its own risks. Do all of their initiatives pay off? Of course not; that’s why they are called risks. But when risks work out, they can open up tremendous opportunities.
Invizion expects to continue growing this coming year. We’ll be right there with them, watching and learning.
Filed under: Government Contracting, Professional Services, Technology Industry | 2 Comments
Tags: Invizion, Professional Services
By Lee W. Frederiksen, Ph.D.
As business leaders, we’re supposed to know all about strategy. After all we’re typically responsible for setting the strategic direction of our firms. But it’s a widely misunderstood topic. So it’s a real joy to encounter someone who can put the topic in perspective.
Recently, I attended a workshop on the topic of execution conducted by Patrick Thean of the Gazelles organization. In my experience, strategy and execution are closely related, and a point Thean made only deepened this conviction. Thean was emphasizing how important it was that tracking performance indicators support your business strategy. That’s when he said it:
“Strategy is not about being better, it’s about being different.”
Now think about that for a minute. How much time do professional services firms spend trying to be better than the competition? We’re forever trying to be faster, more agile, smarter, have better people, use a better process, and walk on water. This is not a strategy. It’s not much of a competitive advantage either.
Let’s reflect on being different for a moment. If everyone else emphasizes low cost, you emphasize ultra-high quality. Now you are talking strategy! Your competitors emphasize customer service; you go for the self-service niche. That could work. What will not work, however, is trying to be “competitive” — i.e., doing what everyone else does, only better.
It is true. Being different just to be different isn’t very smart either. The only differences that really give you an advantage are those that are meaningful and beneficial to your target customers. Nail that one and you have a strategy that will put your professional services firm at the top of the list.
Filed under: Branding, Positioning, Professional Services | Leave a Comment
Tags: competitive advantage, differentiation, strategy