Levelling Up
4 Levelling Up
In his Annual Report, Neville Eisenberg Chair of the Managing Partners Global Group mentioned four key indicators for the Managing Partners of his Group.
Business Skills
Innovation
Productivity, and
Levelling Up
Last week, we addressed Productivity the week before that Innovation, and three weeks ago Business Skills. This week we will look at Levelling Up from a Client Mapping perspective.
Levelling up is the term used to describe opening offices in less expensive locations where the professionals can charge lower fees to take into account the less expensive overheads.
When looking at levelling up from a Client Mapping perspective, the exercise becomes three-dimensional rather than two.
Before looking to relocate a group of professionals to a less expensive area, careful analysis needs to be done as to whether the work carried out by that group could be more profitable if the benefits of the work were better communicated and feedback was more regularly given. We addressed this in Business Skills. Clients should also be asked where they would like their professionals to work and what they would be prepared to pay more for.
Remember the Stella Artois slogan ‘Reassuringly Expensive’. It is not always a question of fees. Sometimes the client wants a service wrapped in tissue paper and to be cosseted more. For example how many clients can speak to an adviser 24/7? Would a client pay more for a dedicated professional, in a similar way that holiday makers will pay more for a butler to book their restaurant, take them shopping book a car for them reserve their seats by the pool and so on.
However, if after proper research it is decided to relocate a group to a less expensive area there are a number of options to consider.
Is it better for the organisation to keep those professionals within the organisation bearing in mind the management time in running a team across multiple locations? But also is there any perceived levelling down of the brand by locating part of it to a less expensive location?
Would it better to spin out the group into a separate business? The advantage is that if the quality of the service declines, then the organisation is not bound to continue to use these professionals it can choose to appoint others.
Allen & Overy successfully spun out its private client department into Maurice, Turnor, Gardiner. Allen & Overy continues to use the services of their former private client department but allows it to manage its business in its way.
UBS has also done this very successfully. A measure of its size is determined by ‘Money Under Management’ and the most time consuming aspect of investment management is to deal with clients. It therefore offered to set up their investment managers into separate advisory businesses but continued to keep custody of the money within UBS.
This has suited both parties very well. The independent investment manager continues to give a very personal service to his clients but has the protection of a big bank to protect the money.
Another strategy which has worked well is to set up semi-retired professionals as independent contractors who pay a fee out of the fees they generate from clients who want to continue to use their services. They can continue to hold meetings in their old firm’s reception rooms and use the other facilities such as HR and research.
My advice in these situations is to continue to insist on client feedback. If professionals are operating in other locations, it is imperative to know that the brand of the organisation is not being compromised through sub-standard services. The same is true for outsourced business.
A further option is to relocate a group of professionals into another organisation. This is the least favourable option because there is no control over the organisation to which they have been co-opted, and clients who continue to use their services may then start to use their other services.
This was seen with the strategy adopted by MacFarlanes which identified that entrepreneurs were a good source of commercial and private client work. It then actively pursued this client type and took Richard Branson and his Virgin work away from Freshfields. Branson wanted the high-calibre work for his commercial enterprises as well as for him personally and moved all his legal work to MacFarlanes.
Looking at a client’s wider interests should also be actively pursued. This is a natural extension of the Marketing Pods and active client feedback.
Your organisation needs to be the one organisation a client goes to for all their professional recommendations, whether for a divorce, estate agent, art broker, or other services. However, the quality of the professional to whom a recommendation must be actively monitored. Again, the best way to do this is by asking clients for feedback and suggestions from professionals of high-quality work and inviting them to join their next Marketing Pod.
Providing a holistic services across all of a client’s professional needs could be just the service a client may be prepared extra for, the best way to find out is to ask and possibly to trial it before promoting it.
The Club can also be used to identify ‘bolt-ons’ for the profitable and growing departments and work. Research professionals working for your ideal client through their case studies and the company their professional connections in their Marketing Pods.
Follow up by connecting through the Directory and meeting to discuss opportunities.
Once they have joined the organisation, they can then be integrated into the firm through the active use of strategic Marketing Clusters always making sure that any schedule of events is diarised and takes place by giving this responsibility to a marketing person or executive assistant and assessing their success at their annual personal review.
The Club can therefore help the organisation grow strategically and then assist in finding the right professionals to join and integrate their services into the wider firm through Marketing Clusters.