Sean Magennis [00:00:15] Welcome to The Boutique with Capital 54, a podcast for owners of professional services firms. My goal with this show is to help you grow scale and sell your firm at the right time for the right price and on the right terms. I'm Sean Magennis, CEO of Capital 54 and your host. On this episode, I will make the case that there are two sales tools that allow boutique founders to win bigger, faster and more often. I'll try to prove this theory by interviewing Greg Alexander, Capital 54's chief investment officer, Greg is arguably the world's leading expert in sales effectiveness in the professional services industry. Today, he will share some of this magic with you. Greg, this is your baby. Good to see you.
Greg Alexander [00:01:14] Hey, Sean, I'm excited about this episode. These two simple tools are powerful, yet for some reason they are not used with as much discipline as they should be. So hopefully this show will help with this.
Sean Magennis [00:01:26] OK, Greg, let's jump straight in. What are the two tools?
Greg Alexander [00:01:29] OK, so the two tools are the demographic profile and the psychographic profile.
Sean Magennis [00:01:35] And give me a simple working definition of each.
Greg Alexander [00:01:38] OK, a demographic profile is a description of a particular type of client based on unique identifier such as gender, age, industry, job title, geography, etc. It focuses on quantifiable attributes and is objective. The psychographic profile is a description of a type of client based on unique identifiers as well. But in this case, it's things such as wants, needs, goals, challenges, priorities. It focuses on qualitative attributes and is subjective.
Sean Magennis [00:02:13] And why should leaders of boutique professional services firms care about these two tools?
Greg Alexander [00:02:19] These tools help leaders of boutiques win bigger deals win these deals faster and win them more often.
Sean Magennis [00:02:27] Greg, how do they do that?
[00:02:29] Selling services is much harder than selling a product. When a prospect buys a product, they put their trust in the product itself. When a prospect buys a service, they put their trust in the people delivering the service. Therefore, establishing trust is essential to win bigger, faster and more often. The best way to establish trust is to know the client better than they know themselves and without question know the client better than the competitors. There is an old saying he who knows the client best wins, and I believe that
Sean Magennis [00:03:05] Some of the old sayings are the best. I think this one was tested recently during the pandemic and it held up. When you must limit human contact, guess who you let in the bubble? The people you trust. Greg, demographic profiles and psychographic profiles are not new tools. Did you know the Englishman John Gaunt invented demography back in 1662?
Greg Alexander [00:03:31] I did not, but nice pull.
Sean Magennis [00:03:35] Did you know that the use of psychographics in the marketing of services began at Stanford University in December of 1917?
Greg Alexander [00:03:42] I did not know that. But I see you are a power user of Wikipedia.
Sean Magennis [00:03:45] Thank god for Wikipedia. I bring up these stats to prove my point. These tools have been around forever. If they truly can help win bigger deals faster and more often, you would think they'd be used more often. However, when I look at firms, they are either not present or if they are present, they are used incorrectly. Why is this?
Greg Alexander [00:04:09] In my opinion, the main reason is founders, especially are domain experts. They are not business experts. Let me explain myself, so, for example, if I asked an owner of a cyber security firm about the technicalities of network security. They could talk to me for weeks, however, if I asked the same owner to describe their client profile, it would be a 10 minute conversation. Because they are not business experts, they do not understand that knowing the client deeply is the key to growing revenues with new and existing clients. Most of them are technicians of a sort, domain experts, but they are not business people, so to speak, meaning worldclass a generating revenue and profits. To grow a firm, a founder must be great at both he or she must be skilled at working on the business in addition to working in the business.
Sean Magennis [00:05:04] OK, Greg, I think we've established what the tools are and why they're important and why they are underutilized. A percentage of our audience are overachievers. They will get off this podcast and immediately go to work on creating these tools. How can they get started?
Greg Alexander [00:05:22] Geez, I would need a day long workshop to do this justice, but let me give the overachievers a cheat sheet. So let's start with a demographic profile. So make a list of all your clients, current and past. Identify the decision maker, the person who bought your service for each one document the following race, age, gender, ethnicity, industry, title, education, geography and income level. Use the 80 20 rule. What is common among each of your clients? This will get you to a V1 of a demographic profile. You should have. You should have all this data inside of your internal systems. If you do not, these days there is no privacy and you can find it in all the social media platforms. Let's switch gears to the psychographic profile, which is much harder. Take a statistical sample from the above, say maybe 30 clients or so, and interview them. Ask them about, what are their wants or their needs or their desires? What are their goals, maybe immediate, intermediate and long term, what are their challenges standing in the way of accomplishing these goals? What are their priorities? And how do they set priorities? What interests them inside and outside of work? What is their attitude? Are they optimist or a pessimist? Are they activists or passivist? Use the 80-20 rule here as well, what is common among each of your clients, this will get you to a V1 of a psychographic profile.
Sean Magennis [00:07:04] That's very helpful I got that, very practical, and once they have the two tools built, what do they do with them?
Greg Alexander [00:07:11] Everything. I mean, there is no part of a boutique. This information will not change. I mean, every sale script changes, every process to deliver a service gets rewritten to reflect this enhanced understanding of the client. The firm should change its marketing messages, its price positioning, their hiring profiles of staff. I mean, the list goes on and on. To win bigger, to win faster and more often, requires a boutique to obsess over the client every little detail. Without this information dynamically updated regularly, you are not client focused. You are throwing darts against the wall, hoping something sticks. Here's little fun thing to do at the next staff meeting when sitting around the table, be sure to have one seat at the table empty. Put a sign in the seat that says client when the team is trying to make a decision turned to the client who now has a seat at the table and ask what would the client say if he or she was in the room? This signals to everyone that the client is at the center of everything you do.
Sean Magennis [00:08:16] This is just fantastic. It's brilliant and a good reminder of two tools that have been best practices for decades. Thank you, Greg. And now a word from our sponsor, Collective 54, Collective 54 is a membership organization for owners of professional services firms. Members joined to work with their industry peers to grow scale and someday sell their firms at the right time for the right price and on the right terms. Let us meet one of the collective 54 members.
Josh Mastel [00:08:54] I'm Josh Mastel, the CEO of UpRoar Partners, which is an outsourced sales solution for leaders of B2B organizations across the U.S.. At the end of the day, there's only one reason why companies and teams missed their revenue targets, and that's because of a lack of quality opportunities inside their sales pipeline. We fix this exact problem for our clients by deploying our sales methodology that's been proven and executed by our team of salespeople. And the whole goal is to remove all of the hassle of generating sales opportunities completely off of your plate.. So if you have a dry pipeline and you're not confident that you have enough, that that's enough opportunities to get you to your revenue number by the end of this year, get in touch with us at www.uproarpartners.com or my email at Josh@uproarpartners.com.
[00:09:37] If you are trying to grow scale or sell your firm and feel you would benefit from being a part of a community of peers, visit the Collective54.com. OK, this takes us to the end of the episode, let us try to help listeners apply this. We end each show with a tool. We do so because this allows a listener to apply the lessons to his or her firm. Our preferred tool is a checklist and a style of checklist is a yes no questionnaire. We aim to keep it simple by asking only 10 questions. In this instance, if you answer yes to eight or more of these questions, then your ideal client profile is working for you. If you answer no too many times, then your ideal client profile is not working for you and you are likely getting in the way of your attempts to scale. Let's begin the questions.
Sean Magennis [00:10:44] Number one, you have a demographic profile of your target client?
Greg Alexander [00:10:50] And it's important to mention this is the client you want. Not maybe that's different than the client you currently have.
Sean Magennis [00:10:57] Number two, do you have a psychographic profile of your target client? The same thing.
Greg Alexander [00:11:03] Correct.
Sean Magennis [00:11:03] Number three, do you have an elevator pitch that speaks directly to the target client?
Greg Alexander [00:11:09] That's oftentimes a humbling experience.
Sean Magennis [00:11:11] Yep.
Greg Alexander [00:11:12] Record yourself as to what your elevator pitch is and pull out your demographic and psychographic profile and say, how would this sit with them? Oftentimes it's off.
Sean Magennis [00:11:20] Number four, do you understand the personal goals of the client?
Greg Alexander [00:11:25] People of people, people buy from people, so personal goals are just as important as professional goals.
Sean Magennis [00:11:31] That's right, great point. Number five, do you understand the professional goals of the client? Number six, do you understand the obstacles preventing the client from accomplishing their personal goals? And number seven, do you understand the obstacles preventing the client from accomplishing their professional goals? Number eight, do you understand the likely objections that your client is going to submit to you?
Greg Alexander [00:11:57] Right, so if you understand their obstacles professionally, personally and make your pitch, you should you should be able to anticipate what are they...
Greg Alexander [00:12:05] Exactly.
Sean Magennis [00:12:06] Good point. Number nine, do you understand the client's top priorities? And number 10, do you understand the emotional makeup of the client?
Greg Alexander [00:12:17] Goes to client experience, right.
Sean Magennis [00:12:18] This is fantastic. Greg, thank you. In summary, know thy client. Get inside their hearts, their souls and their minds. Try to know them better than they know themselves. Take this knowledge and drive it into everything you do. When a prospect bumps into you, they should say to themselves, these people, get me. If you enjoyed the show and want to learn more, pick up a copy of Greg Alexander's book titled The Boutique How to Start Scale and Sell a Professional Services Firm. Thanks again, Greg. I'm Sean Magennis and thank you for listening.