In Search of Added Value

If professional firms really want to be their clients’ trusted advisers, they need to put their clients at the core of their business strategy.

In a place far, far away called 2004, we ran a project where we conducted a programme of face to face interviews with almost half of the GCs in the FTSE-100. We wanted to explore this strange idea of added value because every law firm in town had a clear idea of what they were required to spend their marketing budget on to add value, but we weren’t convinced this aligned with what clients saw as adding value.

So, first we showed them a list of so called value adds and asked them to score the firms they were talking to us about. That done, we asked them about the value they got from those same add-ons. Then we put the two data sets together – it wasn’t rocket science, but the resulting chart just seemed to hit the spot.

We called it the marketing paradox for obvious reasons: what was really valuable or important to clients, law firms were poor at delivering on and what was of less importance to clients, they delivered on in spades.

In short, it looked law firms straight in the face and said,

You’re getting it wrong – big style’.

The question is, 14 years and a worldwide recession on, are they getting it any more right in 2018?

There’s no spoiler alert because we are just starting out on the research, sponsored by one of our clients. But I have an inkling, a feeling in my boxers if you will: the way we add value has moved on, but the way clients see it has also moved on and firms are still playing catch up – they are lagging the market.

Since I get to speak to lots of GCs and senior legal decision makers, I often introduce topic of added value. And it often throws those I’m discussing it with. But once they’ve thought about it, they may mention training, a secondee. They definitely won’t mention the website; they’re unlikely to mention any newsletter, digital or otherwise; hospitality, on the rare occasions it comes up, is usually mentioned in a negative context, unless it has been very well-judged indeed. What they actually refer to is the way the work itself is handled.

One GC reflected on my question wistfully and said,

I was on this deal and it was a nightmare, it just went on and on and every night at 10pm, the partner would call me up and say ‘How are you doing? Is there anything more we can do to help?’ And that made me feel so much better, just to know that someone really had my back.”

The high-octane atmosphere of a deal brings its own pressures and clients often see the added value in the fact that the firm actually did what they said they were going to do, rather than overpromising and underdelivering, which can leave the in-house team in the lurch.

This is a curious state of affairs because it is almost reversing Maslow’s hierarchy of needs. Simply put (with apologies to those with degrees in psychology), humankind have a hierarchy of needs, the most basic of which are having food to eat, water to drink, shelter, clothing etc. The next level up is about safety and being able to avoid danger. Thereafter we are into the more esoteric area of love and belonging, which is perhaps where the example of the GC getting his ten o’clock nightly call comes in. Then we have esteem – the cred’ from driving that super smart car or living in an expensive house in the best area of town. Once we have covered off all these bases – we’re fed, safe, feel we belong, have all the toys, the final level is self-actualisation, where we get real fulfilment from what we do, whether that is at work or home.

My hunch is that the hierarchy of needs works slightly differently in the business of professional services. To start, the client wants the basics of offices, IT and other ‘tangibles’. They add little if anything on the value add front. Then we have ‘reliability’ at the next level up. Can the firm be relied on to deliver?

The third level is everybody’s favourite ‘responsiveness’. Stand in front of a room full of partners and ask them, ‘what is the most important aspect of service?’ and they’ll answer responsiveness every time. Except our data shows very clearly that it is isn’t. You can add value by being omnipresent but it’s a one dimensional trick unless the client is the firm’s most profitable relationship by a stretch.

With apologies to Abraham Maslow:

Assurance is about trust: trusting that you can wheel the partner in front of the Board and they will be impressed not bored. It is the ability to see the bigger picture and think strategically. Get this right – and few do – and you will add oodles of value.

At the top of this particular pyramid is ‘empathy’. The opposite of arrogance. This is about listening, understanding and being there for the client – phoning at 10pm every night to check the client isn’t teetering on the edge of Beachy Head. Enormous scope for adding value.

So, adding value is much less about all those newsletters  or the latest incarnation of your website. For the most part clients don’t give a stuff. Added value is one element of managing the relationship, understanding the client and their needs, not a selection of arbitrary bolt-ons that may be irrelevant to one or more clients. It is inextricably linked to the service you provide and how you provide it and, more to the point, it comes low down on the hierarchy of needs.

About the author: Tim Nightingale

Tim founded Nisus Consulting in 1996 with the aim of helping professional services firms become more client focused. Tim has an MBA from Cass Business School, is a Fellow of the Chartered Institute of Marketing and a full member of the Market Research Society. See Bio…