EY axed 30 partners to improve profits!

EY axed 30 partners in its consultancy division in March of this year to maintain profits. This could have been avoided. Axing partners to retain profits is not an isolated incident. 

When I was appointed head of the private client department at City lawyers, Simmons & Simmons, I was told that if my department did not make a decent profit within two years, I would be asked to leave. There was no guide, mentor, or handbook on what to do. I succeeded and then decided to share my research and findings with others so that all professionals can learn how to win good quality business, and clients are given a better service.

I have a background in psychology, experience as a leading professional adviser and have been a contributor to the weekend FT on tax and trusts for 12 years, so I was well qualified to do the work. 

The first distinction is the difference between marketing and business development. Marketing promotes and penetrates the brand's market, whereas business development seeks new business and revenue streams. A team of specialists usually does marketing, whereas business development is generally done by the professionals themselves, whether through networking or finding connections to target prospective clients.

Research into human behaviour - psychology - shows that people have an ‘innate fear of the influence of strangers’ or product push. Whatever you are promoting at any one time, only 3% of people will be interested. This percentage increases on subsequent promotions, but it takes 5-12 touches before the brand becomes familiar and ‘interesting’. This is the aim of the marketing team.

However, most marketing is non-strategic, whether social media, advertising, PR, brochures or cold-calling. This gives rise to the ‘Pareto Principle’ or the 80:20 rule. Twenty per cent of the work is responsible for 80% of the profits. 

To increase profits in an organisation, business development needs to be strategic.

Networking by professionals at ‘face to face’ events is non-strategic. The only strategic element is to decide what events the professional will attend and hope that the other attendees can refer them business. One obvious fact is that if the professionals at the event do not have clients which you would like to do business with the event is a waste of time and money.

Further psychological research revealed that there are four methods of engaging interest without triggering the innate fear, aggregation, case studies, reciprocation and education. 

Let’s look first at aggregation. If your services are featured alongside other service providers  this significantly reduces the fear. You can see the power of aggregation in Burlington Arcade for cashmere sweaters, articles by journalists with numerous quotes from similar industries, the Frieze for art, etc. 

For service providers to feature alongside other professionals on a neutral platform, I needed to design one where their blogs, podcasts, case studies and profiles could be easily accessed and shared. LinkedIn is not designed for this purpose so although useful for social media is not fit for this purpose. You can find the platform on https://carolines.club.

The second method is case studies. These are incredibly useful, but first, you must find out your most profitable client types. The emphasis here is on profitable, not revenue, so you need to weed out the clients who expect a discount, demand urgency without paying extra, do not pay on time or waste time.

The case studies need to be centred around these clients and the work you do for them. First give the clients an identity, and include to whom you report to bring a human element into it, the problem the client wants to solve and how you solved the problem using your experience and training.

We now come to the education and reciprocation. Professionals like to meet to listen to a talk on what interests them such as how to make a profit through client mapping. Make sure you invite only professionals who work for the same client types. If they are from the same organisation, we call them ‘Clusters’ and from different organisations, we call them Pods. 

After the short talk, which is to ‘Educate’, the professionals share case studies recorded and loaded onto the platform where they can be accessed and shared. At the end of the event the host can then serve refreshments, which completes the four ways to win business with reciprocation. The whole event takes no more than one and a half hours!

Each professional who records a case study is then asked to share it with colleagues contacts and clients.

There are numerous other ways to increase an organisation's profits. A straightforward way is to find out what clients would pay more for and to reorganise the charging structure accordingly. Another is to host workshops with professional staff to brainstorm ideas on how to charge more and work less.

Another area to improve the work/life balance is to adopt good working habits, such as eliminating ‘just a minute’ meetings and rewarding the most profitable professionals rather than those who like to be seen to stay in the office until late.

To get some idea of the breadth and depth of the scope for increasing profits, take this Quiz.

We can then take you through our 12 Point Plan focusing on your organisation's areas of most interest and our interactive Workshop

Please contact me on 07979 188 288 or by email.