Is the Trusted Advisor Still Trusted?
“The market has changed dramatically,” a senior partner at a major law firm recently told me. “I’m beginning to wonder if clients even want a trusted advisor anymore. Much of the time it just comes down to price. It’s discouraging.”
Another client of mine, a senior executive in a large global consulting firm, echoed this sentiment: “Selling cycles are much longer that they used to be. Procurement is usually involved, and they can be brutal at squeezing down the price. Sometimes, after you invest a great deal to educate the prospective client, they just decide to do it themselves.”
Since 2008, many business professionals are feeling pummeled by intense price competition and ever-harsher client demands. They are asking: Is becoming a client’s “trusted advisor” an antiquated aspiration in a world where clients seem mainly concerned with getting the lowest price? Is it still relevant when procurement routinely comes between you and your executive clients? Do relationships, in short, really matter anymore?
Do relationships still matter?
The short answer is “Yes…but.” For many client executives, the role of trusted advisor is still relevant and valued. Trusted relationships are still very important. And, providers who offer substantial, differentiated value are getting handsomely rewarded for their expertise. There is abundant evidence for this: In even the most cutthroat markets there are competitors who command premium prices.
For example, in the last year, the number of law firm partners in the US billing more than $1,150 per hour has doubled. In line with that fact, the lawyers who have been able to raise their rates during the recession are the most expensive ones, whereas the most intense price pressure has been at the bottom of the billing rate scale. Remember, value is derived from two terms: Benefits and costs. If you cannot persuasively convince clients about the benefits they will receive, they will try to increase value by cutting your price!
That said, market conditions and client buying behavior certainly have changed since 2007. It’s tougher out there. To succeed, to have to select your clients carefully, demonstrate value-added at every stage of the client development process, and be more assertive and persistent than before.
Now we're going overboard…
It’s not just practicing professionals who are questioning whether trusted relationships still matter. A number of authors and pundits have also jumped on the “relationships don’t matter anymore” bandwagon. In recently months, for example, I have read the following in various books and blogs:
“Relationship-oriented salespeople are the worst performers”
“No client wants a ‘consultative salesperson’”
“Solution selling is dead”
“No one really values a trusted advisor—what they want is results.”
I hate to be cynical, but most of these statements fall into the category of trying to grab attention with false contrasts. It’s like the newspaper headline that reads, “Research proves that loving mothers raise more juvenile delinquents.” Then you read the article, and you learn that the mothers categorized as “loving” were the ones who were so accommodating that they let their kids have booze parties at home starting at age 16! Loving, indeed.
One recent study, for example, defines relationship-oriented salespeople as those who seek to please their clients, avoid conflicts, don’t confront their prospects with hard truths, and so on. But who ever said a trusted advisor did any of these things? Be wary of sensational headlines.
Relationships are still important, but you have to get sharper. Here are eight strategies that will help you not just survive but thrive:
1. You won't become a trusted advisor to all your clients, but you should still aspire to the role. You will not reach “advisor” status with many of your clients. Even the best firms and professionals have this type of relationship less than 50% of the time. Yet, you must strive for the role. In some ways it’s like aspiring to play tennis like Rafael Nadal. If your goal is to beat your aging, out of shape neighbor on the court, you won’t have to try very hard and you won’t improve much. But if you set your sights high, you will engage much more vigorously in the training needed to excel. You may never compete at Wimbledon, but you will improve your game dramatically and whip your average club opponents. The other side of the coin is that if you don’t set your sights high with clients, you’ll get marginalized pretty quickly by more aggressive and determined competitors.
2. Improve your advisor skills and you’ll be more successful in almost every client situation. Below is a list of some the things that a client advisor does. Despite difficult market conditions, do you think these are still important in winning sales and building long-term client relationships? Client advisors:
- Ask great, thought-provoking questions and they are deeply empathetic
- Have selfless independence: They combine client devotion with detachment. They put their clients first but are willing to say “No!” to them.
- Have deep expertise but also knowledge breadth. Because of this, they can put their specific products and services into the context of their client’s broader business.
- Are good at analysis but especially synthesis—at big picture thinking. They see the trends and make the connections that others do not.
- Go beyond “professional credibility” and build deeppersonal trust with their clients. They have great integrity, put their client’s interests first, and are immensely reliable and consistent.
- Are agenda setters. They don’t just take orders. They engage and stimulate their clients with points of view, best practices, new ideas, and so on. They try to shape and drive their client’s agenda of key priorities and goals.
These are important skills, period. Here’s some data: RAIN Group recently did a survey of 700 corporate buyers in business to business markets. They were asked what qualities separated out the winners from the second place finishers in competitive bids. What were the number one and number two characteristics of the winners? First, that the salesperson “Educated me with new ideas or perspectives”; and second, that he or she “Collaborated with me.” These are exactly the kinds of things a trusted advisor should be doing at every stage of the client development process. (Note–the actual study RAIN did is available here).
3. For selected clients, be a trusted expert. Some clients will view you as a narrow supplier and focus on price and execution. So don’t over-invest in these situations. Be realistic: For these clients, you can be a “steady supplier” who is considered a trusted expert by the client. But you won’t be part of the inner circle. If your profit margin from the acount is acceptable, these types of relationships can represent good business for you.
4. Understand that the better your relationship, the more value you have to add. Just because you have built a great relationship doesn’t mean you can relax. On the contrary, you have to continually re-earn your client’s loyalty by delivering over and over and by adding value and creating results. In a trusted relationship, clients’ expectations go up, not down! They expect you to work very hard for their love.
5. Choose your clients carefully to match your strengths. I recently spoke at a large sales and marketing conference in Santiago, Chile. I spent time there with bestselling author Neil Rackham ("Spin Selling"), a leading authority on selling. One of his key assertions is that the market has segmented into transactional buyers and consultative buyers, and the requirements to succeed in each are quite different. If you provide a high-end, value-added service, you probably aren’t going to do well with transactional buyers who only value price. Pick the right clients to invest in, say no to others, and your business will thrive.
6. Build a following. An important antidote to difficult market conditions is to build a strong and loyal following. What is your client retention rate year over year? How about over three years? What could drive that figure higher? How would you rate the total “client experience” that you offer? Would you say it’s average? Competitive? Differentiated? Are clients merely satisfied with your work or truly enthusiastic about it and telling others how good you are? Think about how you could create more client enthusiasm, excitement, and passion around your work and your brand.
7. Work at differentiating yourself instead of blaming clients for not understanding how special you are. If clients don’t see how you’re different than your competitors, that’s your fault, not theirs. It’s a basic principle of economics that when a buyer perceives equal substitutes there will be downward pressure on prices. There are many, many ways to differentiate, and in every market—including commodity markets—there are always competitors who successfully do so. You can differentiate on service levels, methodology, geographic focus, industry specialization, the client experience, relationships, and so on.
8. Treat prospects like clients and old clients like new ones. The goalposts have been raised. Clients expect more value in the sales process. And, when they have an ongoing relationship with you, they expect ongoing innovation and investment. Be selective about who you target as a prospect, but then treat them like they are already a client. Act like you’re already their trusted advisor. Then, treat your long-standing clients like brand new ones—bring the same enthusiasm, new ideas, and energy to the 100th meeting with a client that you brought when you were wooing them. That’s what keeps trust and loyalty strong.
It’s a much tougher world out there. Yes, sometimes even brutal. But here’s a final reason to keep the faith: Relationships reduce risk and are here to stay. One of the most fundamental benefits of a trusted relationship is risk reduction. A good, trusted relationship reduces the risk of misunderstandings, delivery failures, and missed deadlines. It also enables business to be conducted faster. Clients know this and value it because we live in a world that’s more fraught with risk than ever.
Do relationships still matter? What has your experience been?
Two New Power Questions e-Books
I recently wrote two short eBooks that John Wiley & Sons has published in all three e-reader formats. They set out the strategies and power questions that will help you acquire more new clients and deepen and grow your existing client relationships:
Power Questions to Win the Sale: Overcoming Nine Key Challenges
Power Questions to Build Clients for Life: Nine Strategies for Success