Beaton's research amongst 10,000s of clients of professional services firms over the last 10 years shows that perceived price is positively correlated with the value perceived by clients. Yes, that's positively correlated. In other words, the higher the price, the higher the value perceived by current buyers users of the service.
In these days of enormous price-down pressure on every firm in every profession, this finding – that perceived price is positively correlated with perceived value – warrants repeating. And explaining. And testing. And learning to use in practice. That's because it's seems at odds with everyday experience of firms. (more…)
Selling professional services has never been harder. Competitive intensity is increasing within and amongst the professions, especially law and accountancy. The winners are focusing on delivering great client service experience – the losers are focusing on sales. Now read on.
More on the importance of cost consciousness in law firms was added to the discourse last week in George Beaton's video interview with Australasian Lawyer.
Building on Mel Anderson's great post on why cost consciousness is valued by clients, in the interview George re-states the 'incontrovertible evidence' that cost consciousness plays a greater role than price in how clients perceive the value they receive from their law firms.
Research shows clients are the canary in the coal mine for professional services firms.
Analysis by Beaton Research + Consulting over last 10 years has identified seven larger professional services firms in Australia where their clients sensed the firm was in trouble well before the firm seemed to do so.
In these cases, independent measures of client satisfaction started to fall steadily years before any effective action was taken to arrest the declining fortunes of the firm. In six it was a case of too little, too late, and the firms as we knew them are no longer with us. In the seventh, a largely new Board and outside CEO turned the tide.
There are several types of competitive strategy according to Michael Porter of Harvard – and different risks inherent in each strategy. Most would agree though that being "all things to all people" is a sure recipe for mediocrity and being treated as a commodity. Professional services firms do need to differentiate – but need to be smart about how they do so.