Do you manage a medical, law, accounting, or another type of professional practice? If so, chances are that you’ve seen some changes in recent years.
You may be finding that the market you’ve served for years is no longer the same. In the midst of a world of endless options, customers are demanding more for less. Customers are expecting better service, but they don’t expect to pay for it.
With endless options available at the click of a mouse, customers are more empowered than ever before. If your professional services firm isn’t willing to meet a customer’s demands, the customer can call the next firm that comes up in their Google search.
What’s the result for those of us who work in these industries? It means increased pricing competition and a need for constantly-evolving strategies.
Managing and marketing a professional services firm is about building long-term relationships, increasing referrals, and demonstrating credibility. Here are three trends in our industry and what you should be doing about them:
1. Online Offerings and Social Media
Today, customers rely heavily on the Internet to make their buying decisions. Business 2 Community found that over 60% of all buyers research potential service providers on social media. Through a quick search, customers can learn about the variety of firms, services, and pricing structures available.
Perhaps the greatest change in recent years is the number of outlets for customers to write and find online business reviews. Customer reviews can spread like wildfire on the Internet, particularly through social media outlets such as Facebook, Twitter, and Pinterest.
These are powerful. Past or current customers can influence a firm’s reputation with a single review, and potential customers are just a click away from reading what these customers have to say.
There’s no doubt that the Internet has intensified competition and increased the power of the customer. However, smart firms are viewing this trend as an opportunity, not a threat.
Strategy: Because today’s customers are flocking to web-based resources, firms are taking advantage of websites and social media outlets to stay in touch with customers and take control of their online presence. It’s no longer enough just have a website. Now, it’s vital that professional service firms have a strategy for digital and social media in order to manage their virtual presence.
Another thing that should be on your mind is your content marketing strategy. The majority of purchase decisions are made before a customer even talks to you, so it’s up to the content on your website and social media platforms to speak for you and develop your credibility. Roughly 65% of professional service firms have blogs, and that’s just the beginning of the type of content marketing it takes to compete in today’s digital age.
2. Demand for Self-Service Options
An increase in the number of options available to customers has created a market of intense competition. Customers are increasingly look for self-service options and mobile capabilities.
To address this trend, many firms have taken their services online or provide at-home solutions, creating immense autonomy for the customer and greatly reducing live customer interaction. Brian Manusama, an analyst with Gartner Research, expects that two-thirds of customer service interactions will involve no live human interaction by 2017.
In addition to self-service options, customers also want quick, easy ways to research firms and their service offerings without personal interaction. An increasing number of customers are looking to firm websites to find answers, utilizing firms’ FAQ pages more than live chat options. As customers continue to demand independence, it can become more and more difficult for firms to retain control over the client experience.
Although automating services and providing self-service options can help firms cut costs and offer competitive prices, the loss of live interaction with the customer can be dangerous in the long run. Live interaction with customers can provide valuable insights into what customers need and how well a firm is fulfilling those needs.
Strategy: As the frequency of live customer interaction declines, it becomes even more imperative for a business to research and learn about customer needs through other avenues. If you don’t know how your customers make buying decisions or how you compare to competitors, you are leaving yourself open to unnecessary risk. Invest in customer research and competitive analysis, and use this data to drive strategy within your firm.
3. New Competitors
Remember when your biggest competitor was just down the street, and you could easily keep an eye on them? Oh, simpler days.
Now, online and self-service professional service providers are popping up left and right. By operating almost exclusively online and utilizing self-service delivery methods, businesses such as LegalZoom, TurboTax, and Esurance provide quick solutions to customers at prices that many brick-and-mortar businesses struggle to match.
With little overhead and automated services, these firms can deliver speedy, low-priced services that are attractive to customers living in today’s fast-paced world. While these new delivery methods may not always provide stellar quality and reliability, many customer segments weigh convenience and price above all else.
Strategy: In an effort to provide competitive pricing structures, many professional services firms are cutting costs by shipping service processes overseas. While larger professional services firms have the resources and capability to set up shop overseas, this is not always an option for smaller firms.
For firms of all sizes, it’s important to know what differentiates your services. Firms need to understand their competitors’ market positioning. Only by understanding the customer perspective of these new competitors can firms learn what customers want and strategize on how to evolve to meet their needs.
Unfortunately, many professional services firms, and law firms in particular, fail to see themselves as businesses. Therefore, they lack basic strategic planning processes and business acumen. They may provide expert service to their customers, but they fail to operate like typical for-profit organizations. Much can be learned by understanding how established businesses in other industries are working to meet changing customer demands, manage their internet presence, and respond to new competitors.
So, as a professional services firm, how do you keep up with this constantly changing environment and stay relevant?
What else would you recommend other professional service firms do to remain competitive?