Tag: do nothing

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Episode 50: Are you Losing to “Do Nothing”? – Member Case with Beth Trejo

Beth Trejo, CEO, and Co-Founder of Chatterkick, discusses how to stop losing to a competitor we call “Do Nothing.” Boutique professional services firms lose more deals to “Do Nothing” than any other competitor. If you want to bring on new clients, you will need to defeat this competitor to grow your professional services firm.

Transcript

Sean Magennis [00:00:17]: Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. Our goal with this show is to help you grow, scale, and exit your firm bigger and faster. I’m Sean Magennis, Collective 54 Advisory Board Member, and your host. 

I will make the case that boutiques lose more deals to a competitor, we call “Do Nothing” than  any other competitor. I’ll try to prove this theory by interviewing Beth Trejo, the CEO, and co-founder of Chatterkick. Beth educates business leaders on social media tools and gets their digital recruitment, social media, and digital customer service efforts working. You can find Beth at chatterkick.com. Beth, great to see you, and welcome. 

Beth Trejo [00:01:14]: Thank you, I’m excited to be here today. 

Sean Magennis [00:01:16]: Likewise, we’re so excited to have you. So, Beth, our description of the competitor we called “Do Nothing” refers to the project that went away. The prospect did not hire a firm, any firm. They just decided not to move forward with the project. In other words, they decided to do nothing. Has this problem occurred for you in your line of business? 

Beth Trejo [00:01:40]: Yes, and we actually see this a lot. We focus on the social media platforms, and many times these are the first things that people set aside when they’re busy, or they hand their social media keys to an intern, and then the intern goes away. And so it’s one of the most overlooked opportunities that I think a lot of businesses have in multiple categories, not just direct retail. 

Sean Magennis [00:02:03]: Yeah, you know, that’s what we find, too. And so, just following up from there, do you feel that this is a top competitor that boutiques must defeat to grow? And why do you feel that way? 

Beth Trejo [00:02:16]: Yes, I do, and I think the “Do Nothing” competitor really does demonstrate a core value that a lot of the professional services firms have, which is expertise and their advice. And let me give you an example. 

Sean Magennis [00:02:30]: Yes, please. 

Beth Trejo [00:02:31]: One time that we had a particular customer and they were looking to recruit a salesperson, and this “Do Nothing” approach actually cost them millions of dollars. So, what happened was they were in this business. They were a manufacturing company, and their lifetime customer value is really high. So, they were looking to recruit a sales individual that, you know, they were super excited about when they found a candidate. 

This candidate had expertise in the industry, and they were going to take this new product line and really get it off the ground. He’s super excited about this candidate, the business buzz. And they got to the final stage of the interview process, and they offered the candidate position, and the candidate declined. And they were just completely perplexed. They couldn’t figure out what happened. 

And they asked the candidate, and the candidate said that they had multiple offers from this business and their competitor, and they felt like their competitor, the offer they accepted, felt more “modern” than this business. And this business was innovative. It was high technology-driven. It was all of the things. 

Sean Magennis [00:03:51]: Yes. 

Beth Trejo [00:03:51]: But online, they had a website that was old school. 

Sean Magennis [00:03:56]: Yes. 

Beth Trejo [00:03:57]: They had a social media presence that was pretty much nonexistent. And maybe a couple of tweets that were left from Happy Memorial Day a few years ago. And so it really was. They didn’t have a presence, so they didn’t get to tell their story, and their story was formed for them, which was that they weren’t a modern company, and they lost the candidate. 

Sean Magennis [00:04:22]: That is such an extraordinarily good example, and it just showcases the nuances and the importance of having all of these elements defined. And then, you know, there’s this concept of mystery shopping where, you know, I think it’s so critically important for people to mystery shop themselves so they know what candidates you know, think, and feel. Is that something you guys do? 

Beth Trejo [00:04:45]: Yes, we definitely just kind of take a customer journey approach. Can people find basic information about you? Do you have a presence online that is an authentic reflection of who you are?  I don’t think that people are looking for perfection, whether it’s candidates or it is customers. But, they want to feel like they have good information and they want that authenticity. So, stock photos – throw them away. I would rather have a candid picture of your team over lunch than a stock photo of people that don’t look like those who work at the business.

Sean Magennis [00:05:18]: Yeah, that makes total sense. So, OK, defeating this “Do Nothing” competitor. It sounds like it will save founders a ton of time and boost revenue. I’d like to get your thoughts on some of the best practices that we recommend in this area. 

There are four specific things I’ll walk you through, and I’ll have you share your thoughts on each? The first is to be sure you can state the problem you solve for your clients clearly. I often ask a professional services firm  founder what problem they solve for clients. And they typically tell me about their solution. So, what are your thoughts about this? 

Beth Trejo [00:05:56]: Yeah, and I really think from our angle, the power of social media really lets you cross multiple operational areas of your business. Yes. The first is it does give you a competitive advantage because if you have a microphone, you can tell your own story. And it’s not just the story that your employees that maybe left in an unfavorable way could tell about you. It’s not the story that your history necessarily defines you. 

But, if you have these channels, they really are a communication channel. And so it can build loyalty, gain a competitive advantage, and help you build real connections. Yes, because I do think that that is the currency of our future. It’s how deep can you connect with your audience? 

Sean Magennis [00:06:41]: You’ve hit the nail on the head. The second thing to do is to determine if the problem you’re solving is pervasive. So to grow your professional services firm, we need lots of sales opportunities. What are your thoughts on this concept? 

Beth Trejo [00:06:55]: So, I think for as it relates to social media, I think and even just creating a digital presence, we really are living in a world of you need that existence online, and you need to make sure that you have proof or validation. 

It’s funny. Testimonials are not as important in terms of the word testimonials. People like the word review because review feels less forced than testimonial. And we want as consumers, again across all categories, to feel like we have control to source information about our businesses and the people that we work with, and we don’t want it dictated to us in, you know, a non-authentic way. 

Sean Magennis [00:07:39]: I like that. So the concept of reviews rather than testimonials that’s very powerful. Number three that we recommend is it’s a problem proving the problem is urgent. So when a founder pitches a prospect, a prospect of determining what he or she, you know, is hearing is worthy of making it on the priority list, what do you think of this idea? 

Beth Trejo [00:08:03]: I think, especially as it relates to the “Do Nothing” competitor, urgency is really important because what can happen is if you’re complacent and you just let your presence exist online, or you’re not actually trying to make it better, your story gets told for you. And people are really busy picking up little pieces of breadcrumbs. 

We see this all the time with reviews and again, especially in professional services industries. They don’t collect and capture reviews as much as maybe retail businesses may. But what happens then is if you get two bad ones and you had zero, now you have two two-star reviews. And you start making that times ten, and all of a sudden, you’re not ahead of that, and it’s a really difficult thing to fix.. 

So, my recommendation from an urgency perspective is you have to get ahead of it because this is our world of people leaving reviews and talking about your business. And so, if you’re not getting ahead of the curve and it is urgent, you’re going to be missing out. 

Sean Magennis [00:09:10]: And it’s a 24-7 all on environment. So having the discipline to look at those to respond, to capture them, to learn from them, I guess, is equally important. 

Beth Trejo [00:09:22]: Hundred percent. 

Sean Magennis [00:09:22]: Yeah. So the fourth recommendation to defeat “Do Nothing” is to confirm that a prospect is willing to pay for the solution. Often founders make the pitch, the prospect says yes, and then they see the price, and then that yes, becomes a no. What are your thoughts on this? 

Beth Trejo [00:09:39]: Yeah, I think there’s a little bit again, especially in the professional services category of the what is the cost of “Do Nothing” right? And this is a pure cost of losing a critical employee or losing your current employees because, you know, the grass looks greener on the other side. 

Yes, the cost of PR mitigation strategies, I can tell you that’s very expensive, very expensive. And we see this example all the time. And I mentioned this on the review side of things. But if there was something said about you, and there was a swarm of people that just really hurt your reputation, you’re going to need not only just an outside person to help navigate that, but your employees are also going to have to spend a lot of time. 

So there are definitely resources internally that you’re probably going to have to put on that. And I’m sure that those all could be calculated into a total cost analysis. 

Sean Magennis [00:10:34]: Yeah, I think that’s an excellent answer and unpacking of that. Beth, this has been fantastic. There are four ideas: state the problem clearly, pursue only pervasive problems, prove the problem is urgent and use a cost justification to increase the prospect’s willingness to pay. These will defeat “Do Nothing”, and they’ll help our audience members grow. 

OK, so this takes us to the end of the episode. Beth, let’s try to help listeners apply this. We end each show with the tool. We do so because this allows the listener to apply the lessons to his or her firm. Our preferred tool is a checklist, and our style of checklist is a yes or no questionnaire. We aim to keep it simple by only asking 10 of these. 

In this instance, if you answered yes to eight or more of these questions, your strategy to defeat “Do Nothing” is working for you. If you want to know too many times, not identifying the problem is likely getting in the way of your attempts to grow. So, Beth has graciously agreed to be our peer example today. Beth, I’ll ask you the yes, no question so we can learn from this example. 

Sean Magennis [00:11:47]: So, number one, can you explain the problem to your family? Do they understand it? 

Beth Trejo [00:11:55]: Yes, social media is relevant in multiple categories and industries. 

Sean Magennis [00:11:59]: Outstanding. Number two, when you explain the problem to your friends, do they understand it? 

Beth Trejo [00:12:06]: Same answer, I don’t think that anybody would argue that social media isn’t baked into all of our lives. 

Sean Magennis [00:12:11]: Number three, does the problem exist in more than one industry? 

Beth Trejo [00:12:17]: It’s a human-to-human  world these days, and we need to make sure that we’re not just living in a B2B or B2C space. 

Sean Magennis [00:12:23]: I love that answer. Number four, does the problem exist in companies of all sizes? 

Beth Trejo [00:12:30]: Absolutely, from a small little retailer to a large manufacturer. 

Sean Magennis [00:12:35]: Yeah, to a one-man band up to, you know, a global multinational. Does the problem exist in many geographies? 

Beth Trejo [00:12:43]: Yes, and I would argue that it connects us to more geographies than we don’t even probably realize we’re connected to. 

Sean Magennis [00:12:49]: Again, completely agree with that. Number six, are clients paying to solve the problem today? 

Beth Trejo [00:12:57]: Yes, they’re either paying with their time, or they’re hiring someone to help them. 

Sean Magennis [00:13:01]: Number seven, have clients been paying to solve the problem for years? 

Beth Trejo [00:13:07]: As long as social media has existed, they realized that it takes a lot of work, and the trickiest part about it is it doesn’t shut off. 

Sean Magennis [00:13:14]: Yep, that’s 100 percent. Number eight, if the client does not solve the problem, are the consequences severe? 

Beth Trejo [00:13:22]: Very much so, we gave that example with that PR crisis or just losing a key candidate. 

Sean Magennis [00:13:26]: Yep. Number nine, is there a trigger event that puts the client into the market for your solution? 

Beth Trejo [00:13:34]: I think if you start a business, you need to have a presence online. 

Sean Magennis [00:13:37]: Yeah, I think that’s a baseline. That’s table stakes today, right? 

Beth Trejo [00:13:41]: Exactly. 

Sean Magennis [00:13:42]: And number ten, when clients have the problem, do they work to get it solved by a certain deadline? 

Beth Trejo [00:13:49]: Yes, and I think from a deadline perspective, it really does kind of come in waves. But, the consistency is half the battle of social media, and it’s more than just posting on the holidays. 

Sean Magennis [00:13:59]: You know, I love that, and that’s such an important lesson for listeners to understand and then to model. I’m assuming that there are great examples out there that people can, you know, fast follow. What are your thoughts on that? 

Beth Trejo [00:14:12]: Oh, there are so many businesses that are doing it right, and they’re upending different categories. These smaller companies are really competing against large behemoth brands just by connection. And that’s the thing that I would encourage your listeners to do. Social media isn’t just about pushing information. It’s about really listening and building true relationships with your audiences and developing a community. 

Sean Magennis [00:14:37]: Beth, thank you. I mean, this has been extraordinary. And again, I would encourage our listeners to reach out to you if they have any needs in this particular area. So, in summary, “Do Nothing” is defeating you at least 50 percent  of the time, whether you know it or not. 

To beat this competitor, be sure to pick a problem to solve that is pervasive, it’s urgent, it’s one that prospects are willing to pay to solve and be sure you can explain it simply. In other words, start with the problem, not the solution. And in the context of social media, make sure that you are very prepared and that you are literally following it 24-7. Big thank you to Beth for sharing these great examples for us today. 

Sean Magennis [00:15:23]: If you enjoyed the show and want to learn more. Pick up a copy of the book “The Boutique: How to Start, Scale and Sell the Professional Services Firm”, written by Collective 54 founder Greg Alexander.

And for more expert support, check out Collective 54, the first mastermind community for founders and leaders of boutique professional services firms. Collective 54 will help you grow, scale and exit your professional services firm bigger and faster. Go to our website to learn more. Thank you for listening. 

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Episode 24: The Boutique: Are you Losing to “Do Nothing”?

Boutiques lose more deals to a competitor we call “Do Nothing” than any other competitor. On this episode, we discuss how boutique owners can improve sales results by defeating this pesky competitor. 

TRANSCRIPT

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 boutiques lose more deals to a competitor we call do nothing than any other competitor. I’ll try to prove this theory by interviewing Greg Alexander, Capital 54’s chief investment officer. Greg has helped many boutique owners improve sales results by defeating this pesky competitor. Greg, good to see you and welcome.

Greg Alexander [00:01:06] My man Sean, good morning. Good to be here.

Sean Magennis [00:01:08] OK, Greg, let’s jump in. Can we start off with a description of the competitor we are calling, “do nothing”?

Greg Alexander [00:01:16] Sure. So do nothing refers to the project that went away. The prospect did not hire a firm any firm. They just decided not to move forward with the project. In other words, they decided to do nothing.

Sean Magennis [00:01:28] Got it. The quirky name makes perfect sense. And Greg, you feel this competitor is the top competitor boutiques must defeat to grow. Why do you feel that way?

Greg Alexander [00:01:39] So founders of boutiques are time starved. They have too many things to do and not enough time in the day to get them all done. When they pursue new business, the pursue takes up a lot of time. If this time spent does not produce revenue, it can be devastating. Fifty percent of all lost deals are lost to do nothing in the professional services game. This stat was true in my firm and it is proving to be true in the firms led by collective 54 members. Defeating this sneaky competitor will save Founders’ a ton of time and boost revenue.

Sean Magennis [00:02:11] Wow, 50 percent is a big number. This just became a priority for many of our listeners. Before we get into the recommended solution, can you share with the audience the root cause of this issue?

Greg Alexander [00:02:24] Sure. So the root cause of the problem is founders of boutiques are peddling solutions, looking for problems. They are selling vitamins when they should be selling painkillers. Let me explain my analogy. People buy painkillers when they are in pain. When someone is in pain, they do not decide to do nothing. They buy immediately. In contrast, people buy vitamins occasionally. It is an optional activity, maybe tied to a New Year’s resolution or some new health kick. However, many people, when faced with the decision to buy vitamins, just decide to do nothing. It’s not urgent. Boutique Founders’ can get enamored with their solution. They think every prospect needs it, and they are surprised when many prospects decide not to buy it. They have a solution looking for a problem to solve. This is the root cause of this issue. Vitamin instead of painkillers.

Sean Magennis [00:03:16] Yes, Greg, I can see this. So founders can fall in love with their solution. And at times this can blind them to the commercial realities of the marketplace. They get caught up in the technical sophistication of their solution and they do not think about how it will be bought and sold. Greg, I imagine you have some practical advice to avoid this mistake. Please share it.

Greg Alexander [00:03:40] I do. And I’m excited to share it because it’s based on common sense and it is easy to implement. There are four things to do. First, be sure you can state the problem you saw for clients, clearly. This seems like a duh comment, but surprisingly it is not. For example, when I ask a boutique founder what problem they solve for clients, they tell me about their solution. They do not tell me about the client problem. I recently asked an IT consulting firm what problem they solve with clients, and he said we provide cloud migration services. This is not a problem statement. This is a solution description. In this instance, a better answer might have been our clients are trying to migrate legacy apps to the cloud. This is taking too long, costing too much and causing too much downtime. Now, that’s a problem statement and positioning a solution against this has a much better chance of resulting in a win.

Sean Magennis [00:04:33] This is a great before and after illustrative example. The difference between a solution description and a problem statement is subtle, but it’s so important. Greg, you mentioned four things to do. We covered the first. Let’s hear about number two.

Greg Alexander [00:04:49] OK, so the second thing to do is determine if the problem you are solving is pervasive. To grow your firm, you need lots of sales opportunity. If you are solving a problem only a few clients are experiencing, you are limiting your growth. This is a big reason why “Do Nothing” is the number one competitor. A founder gets in front of a prospect, makes the pitch and the prospect says something like, I can see why your solution is very valuable. And if I had the need for it, I would consider hiring your firm. But it does not apply to me right now. Check back with me in six months. You just lost to do nothing. You just wasted your time and a prospect which is never going to buy. If you have to kiss a lot of frogs who never turn into a prince, you will be celebrating your one hundredth birthday before you scale focus only on pervasive problems.

Sean Magennis [00:05:37] Greg, I must admit, I’ve heard many prospects say that to me over the years, almost verbatim. If I think about how many hours I wasted in pitch meetings with prospects like this, I cringed. Anyway, okay I’m hooked on the subject. Tell me about the third idea on defeating do nothing.

Greg Alexander [00:05:56] OK, so number three is proving that the problem is urgent. When a founder pitches a prospect, the prospect is determining if what he is hearing is worthy of making it on his priority list. Prospects just like founders of boutiques are time time starved. If they are going to take on another project, it better be worth it. Prospects prioritize their projects based on urgency. The most urgent go first and get the most budget, the least urgent go last and get the smallest budgets.

Greg Alexander [00:06:29] The action for the founder is to prove that your solution solves an urgent problem and therefore it should be prioritized. Our listeners are wondering right about now how they do this. We don’t have enough time to go into this on this episode. So let me just hit the tips of the wave. To prove you a solution solves an urgent problem, do two things. Number one, calculate the cost of inaction. Make sure the prospects know exactly how much it’s going to cost them if he does not act right now. Number two, show that the pain is getting worse over time. Make sure the prospect knows that if he does not act now, it may be too late down the road. A small problem today will be life threatening six months from now. So let’s giddy up.

Sean Magennis [00:07:19] I had heard the urgency suggestion before, but I had never heard it from a thought leader on how to create the urgency. Calculating the cost of inaction and showing the client the problem is escalating are brilliant ways to get a prospect to move from buy to buy now. Let’s hit the fourth idea.

Greg Alexander [00:07:40] OK. The fourth recommendation to defeat do nothing is to confirm the prospect is willing to pay for the solution. Often founders make the pitch. The prospect says yes, and he sees the price and he changes the yes to a no. When asked what happened, the prospect says we just don’t have the budget for that right now. And guess what? He just lost the do nothing. The fix to this is to confirm that prospect is willing to pay for the solution to the problem. So how does one do this?

Greg Alexander [00:08:10] Every proposal must come with a cost justification and the cost justification must be believable, populated with the prospects own figures. For example, in my time in SBI, we would sell prospect’s projects around sales effectiveness. Each proposal came with the cost justification based on two things. Number one, decreasing the prospects cost to acquire customers and number two, increase in the lifetime value of each customer acquired. These two items were expressed in hard dollars, and the math was based on the client’s current baseline.

Greg Alexander [00:08:47] In each, our fee was placed in this context, the client could clearly compare the benefit in the cost of the project. As a result, we defeated do nothing regularly. I am not sure what metrics our listeners would use in their cost justifications, but I do know they need to figure that out if they are going to defeat do nothing regularly, it is the only way to get the prospect to having high willingness to pay.

Sean Magennis [00:09:13] This is fantastic. So overcome the prospect price objection with a cost justification in the proposal and make it easy for the prospect to have a high willingness to pay. These four ideas state the problem clearly to pursue only pervasive problems, prove the problem is urgent, and use a cost justification to increase the prospects willingness to pay. This will defeat, do nothing and help our audience members grow.

Sean Magennis [00:09:46] 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 firms at the right time for the right price and on the right terms. Let us meet one of the collective 54 members.

John Ferguson [00:10:12] Hi, my name is John Ferguson. I’m the CEO TBM Consulting Group. We’re a global operations and supply chain consultancy, serving manufacturers, distributors and field service organizations in North America, Latin America, Europe and Asia. Our primary clients, our C Suite operations executives and operationally focused private equity firms. TBM helps to reduce costs, improve cash flow and to leverage those gains for sustainable, profitable growth. We provide diagnostics, go forward plans and hands on implementation support to create speed, flexibility and responsiveness throughout our client’s manufacturing and supply chain operations. If you need help leveraging operational excellence to accelerate value creation, contact us at TBMCG.COM. My direct email is [email protected] Or you can reach us via 1-800-438-5535.

Sean Magennis [00:11:13] 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 Collective54.com.

Sean Magennis [00:11:29] 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 the listener to apply the lessons to his or her firm. Our preferred tool is a checklist and our 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, you are not losing to the competitor called Do Nothing. If you answer no, too many times, you are losing to the competitor called Do Nothing. Let’s begin with the questions.

Sean Magennis [00:12:17] Number one. When you explain the problem to your family, do they understand it? Number two, when you explain the problem to your friends, do they understand it?

Greg Alexander [00:12:29] So the reason why family and friends is here is because they’re not in the weeds, right? So if they can’t understand it or if they do understand it, then, you know, you’re communicating clearly. You know, I will add one little funny story. Yeah. So I used to bring my dog Rocco to work. And if I was in these early days of SBI and if I was pitching on the telephone, if he got up and left, I knew I was in trouble.

Sean Magennis [00:12:52] Rocco was a smart dog.

Greg Alexander [00:12:52] He was.

Sean Magennis [00:12:52] Number three, does the problem exist in more than one industry?

Greg Alexander [00:12:59] This goes to pervasiveness.

Sean Magennis [00:13:01] Number four, does the problem exist in companies of all sizes? Number five, does the problem exist in many geographies? Number six, are clients paying to solve the problem today?

Greg Alexander [00:13:17] Right, which is a great way to judge whether the problem is urgent, if they’re already spending money to solve it, then they’re voting with their wallet.

Sean Magennis [00:13:23] Right. Number seven, have clients been paying to solve the problem for years?

Greg Alexander [00:13:29] Yep another important thing, right?

Sean Magennis [00:13:32] Number eight, if the client does not solve the problem, are the consequences severe? Number nine, is there a trigger event that puts the client into the market for your solution?

Greg Alexander [00:13:44] Right. So a trigger event is is something that happens to the client that causes them to act.

Sean Magennis [00:13:50] And number 10, when clients have the problem, do they work to get it solved by a certain deadline?

Greg Alexander [00:13:56] From from buy to buy now.

Sean Magennis [00:13:58] It’s great, Greg. So in summary, do nothing is defeating you 50 percent of the time, whether you know it or you don’t know it. So to beat this competitor. Be sure to pick a problem to solve that is pervasive, urgent, one that prospects are willing to pay to solve. And be sure you can explain it simply. In other words, start with the problem, not the solution. 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.

Sean Magennis [00:14:38] Greg, thank you again. I’m Sean Magennis and thank you to our audience for listening.