Whether business or personal, mutually beneficial relationships take time and energy to develop. Yet, with the right partner, the effort is worthwhile.
The need to build relationships may not be essential in every industry, however their value within professional services has been proven on many occasions.
Macquarie Bank’s Legal Best Practice Benchmarking Reports have consistently shown that new business opportunities are greatest when sourced from referrals and word of mouth.
It is essential to develop a long-term plan that focuses on the establishment and nurturing of professional relationships. Without a plan, firm-wide engagement falls away and results are, not surprisingly, less than spectacular. Often, we move onto the next great marketing idea without focusing on the relationships we developed (or failed to).
Without suggesting that mutually beneficial relationships are the be-all and end-all for profitable growth, the Macquarie Bank studies demonstrate that firms should not overlook these opportunities as part of their marketing strategy.
Strong relationships deliver value in the following ways:
Well qualified new business
In my experience, if the referrer is trusted by their client, their referred client is almost on board from when you meet them. They will be looking for value, not price.
Ask any seasoned business development manager and they will attest to the fact that strong relationships deliver new prospects with greater probability to convert to new business – saving you time, money and effort (particularly shoe leather).
Even when you win a tender, it is the strength of the relationship that often determines how much work you receive. Thinking more laterally, consider if relationships held by your suppliers offer you and your staff productivity gains. For example, does your practice management system integrate with other systems you need to access, and does this reduce training time and effort?
Where do such potential relationships begin?
When considering who you could approach to build mutually beneficial relationships, think broadly:
- Existing clients
- Other advisors to your clients. E.g. bankers, accountants, insurance brokers, financial advisors, lawyers
- Other providers in your preferred industry segments. E.g. industry associations, IT and HR consultants. (One firm interestingly approached their water delivery man)
- Relevant networking groups
You know the why and the who. Now how do you do it?
So if this approach is appealing, how do ensure you are not wasting your time? Start by developing a plan that meets the following criteria:
1. Cultural alignment
How aligned are the cultures and service ethic across your organisations? The maxim that 1 plus 1 equals 3 is powerfully relevant when your career is in professional services. Every member of your respective businesses are ambassadors of your businesses and brand. Hence why it’s important to look for relationship partners who have a consistent and client focussed approach that reflects your own.
2. Build trust and confidence
‘Who can you refer?’ as the opening question won’t get you very far. Seek to recognise common ground that currently exists and ask open ended questions to deepen your relationship – e.g. what is important to them, what is their strategy etc. Then listen. Have some ideas or news to share that might be of interest to them. For example, how you can assist to grow their business? This might involve joint presentations or invitations to other events. Clearly, referrals are the outcome you’re both seeking, so be clear on how their referral will be managed.
3. Know when and how to ask for a referral
The simple answer to the ‘when’ question is after you have delivered value. The definition of value is greater than just referrals. It might be new industry contacts or knowledge you have shared. As to ‘how’ to ask, let’s start by avoiding the use of email, texts or other social media options.
4. Regular contact and feedback
Mutually beneficial relationships develop over time – where contact is not left to chance but diarised and followed up. Does your firm have transparency on who is working with which referrer? Ideally, your practice management system should enable this information to be captured and monitored. Also, make time to contact a referred prospect within 24 hours of a referral, and then thank the referrer regardless of the outcome.
Constructive feedback on referrals (that doesn’t impinge on confidentiality agreements) lead to better qualified referrals over time. So if your approach doesn’t meet the above criteria, you may at worst be wasting your time, or alternatively have identified some neglected areas to explore. Finally, remember that one coffee catch up, or even one referral, doesn’t guarantee an enduring mutually beneficial relationship.
About Stella Angelo
Having spent a lifetime in the financial services sector (primarily in project delivery and sales and marketing roles), Stella now consults to professional services firms to help them grow their business by delivering cash flow smart solutions. Organisational change is most effective where it builds on each business’s current culture and capability. In other words, why deliver a luxury car when a reliable run about will do as a starting point!