[box]In our previous post Does the Market Know (and/or Care) That You Exist?, we discussed performing a market assessment of your industry practice, primarily from a competitive standpoint. This time we address question number four in our fifteen question series, “Does your Firm understand how much importance clients place on industry knowledge and does your firm measure clients’ perceptions of your firm’s industry knowledge and expertise?”.[/box]
This question gets at understanding the role that industry knowledge and expertise plays in selling and delivering industry expertise from the client’s perspective. As we have discussed previously clients have frequently indicated that they consider this to be important, but it pays to understand what they consider constitutes “industry knowledge and expertise” and how this may differ from one client or one engagement to the next.
In our experience the bar for industry knowledge varies considerably. For industries such as Financial Services, Life Sciences or Oil & Gas, a solid grasp of industry fundamentals and practices is a prerequisite; in other industries it is possible to “get away” with limited industry knowledge, particularly around commodity work and generic cross-industry issues. The requirements can also vary by client issue/service. For example, industry may be an important factor in advising on specific international trade regulations but less so for a pensions matter. However, typically the more complex the issue, the greater the need for industry perspective.
“I’m not an industry expert” (and being conversationally competent)
We have seen numerous firms whose professionals are reluctant to engage in conversations with clients or prospects around a specific industry because they say they “are not experts in the industry, and don’t want to look foolish.” Part of the issue here is the way term “expertise” is allied with industry.
In reality, clients are rarely looking for industry expertise in the sense that a professional is an expert in key technical or operational aspects of the industry. An attorney is not typically going to be an expert in jet engine manufacturing techniques or high-end fashion design trends. When we talk about professionals having industry expertise, we are really talking about their ability to understand the implications of industry issues and apply deep professional expertise, be it legal, financial, technology etc., to that issue.
One of our clients coined the term “conversationally competent,” which we have shamelessly borrowed, as expressing the level of industry knowledge a professional commonly needs in order to be effective in applying their professional expertise in the industry.
What does that mean?
When I was responsible for telecom industry training at Andersen back in the day, I illustrated “having telecom industry knowledge” as, for example, the ability to know that when a telecom client said they were building an ATM network that it meant they were building a network using Asynchronous Transfer Mode (ATM) technology – not that the client was planning on rolling out cash machines!
In this instance, in-depth knowledge about ATM technology or network design was unlikely to be important. However, knowing that the client was about to make a significant capital investment would enable a consultant to explore, say, the financial impacts on their business of this new initiative and identify areas the client might need assistance: How much are you investing? How are you funding it? Have you considered the tax implications?
That really is the yard-stick for industry expertise:
What do I need to know about the industry in order to understand what the client is talking about, explore the implications, and deliver service and advice that is relevant and appropriate to the client’s industry?
Horses for courses
At this point it is worth recognizing that this likely differs across the mix of professionals in your firm. Different levels of professional seniority may require different levels of industry knowledge based on the nature of their work and client interaction. Also, firms that run key client programs and/or work effectively across practice disciplines can typically be successful leveraging one or two key industry lead professionals who can help explain the industry characteristics to other professionals that are bringing some specific deep expertise around say a tax or technology issue.
It should also be borne in mind that industry expertise may be of little value if other aspects of your value proposition are out of whack. If your fees are too high, your responsiveness too slow or you simply fail to demonstrate deep expertise in the relevant professional discipline, industry expertise will not make up for these failings.
Armed with an appreciation of what might constitute industry expertise and knowledge, we can now return to the original question and its call to understand what is important to clients. Clearly the best way to do this is to ask them. This can be done both directly through conversation and often particularly effectively through client satisfaction programs.
Another important and effective method is to follow up on both client wins and losses to understand whether industry expertise impacted their decision.
Also be on the lookout for signals that you or your team are not up to speed on industry matters:
- Do clients express frustration at “…having to teach your people our business”?
- Do you find yourself sheepishly asking questions about basic terminology in client meetings … or bluffing your way through the meeting and frantically researching the topic later?
- Do clients and prospects explicitly ask to see industry credentials or meet with professionals in your firm that have industry expertise?
- Do you avoid following up on a particular discussion point (and therefore miss opportunities) because you’re really not sure what the client is talking about or its significance?
We’ve been working with one of our clients for several years now to help them avoid just these kinds of client signals. Through the development of industry courses and the delivery of hot topics briefings we have helped bolster their industry knowledge and give their professionals the confidence to engage with clients and prospects around industry issues.
Knowing what is important to clients in terms of industry knowledge and expertise is clearly critical to making the right investments in practice marketing, service development and professional development. If you’ve not asked this question or can’t clearly articulate an answer in each of your target industries, we’d encourage you to spend some time exploring the issue.
Let us know if we can help you assess or develop your industry expertise, and as always your comments and feedback are appreciated!