How are professional services firms and clients changing their behavior in light of the chaotic economy?

One goal of the Client Advisor Awards is to celebrate the impact of the professional services industry on the economy. Each year, as part of the program, finalists and sponsors are invited to attend a content rich Summit session. For those, who didn't make the exclusive circle, here is the executive summary from the 2008 Summit dialogue focused on how professional services firms and clients are changing their behavior in light of the chaotic economy.

Our esteemed panel included:
• Paul Gladen, President, Muzeview
• Bob Davis, Managing Partner, TopRight
• Read Ziegler, CEO, Vantedge Group
• Lynne Zappone, Sr. Vice President, Global Learning, InterContinental Hotels Group

The economic chaos in the past three months has significantly changed the way clients and professional services advisors are interacting…and, especially how firms are marketing. Paul Gladen recently conducted a review of the thought leadership marketing activities of major professional services firms and identified a rapid shift from simply “reporting” about the crisis to providing implications and advice in their thought leader materials and programs.
Read Ziegler observed that clients are becoming more transparent in their discussion about the difficult economic reality and about the state of their business. If this increased openness is indeed a trend (at least between clients and their most trusted, “inner circle” advisors), the current situation may present a special opportunity for professional service providers who have built close relationship and are in excellent positions to help their clients. Inner circles of advisors will solidify and become more difficult for competitors to penetrate.
Bob Davis counseled on the need for advisors to be especially sensitive to the emotional impact on clients of career uncertainty and survivor syndrome (when your colleagues are laid-off but you aren’t). Client may be equally stressed about reductions in budgets and delays in new product or service introductions and increased competition for a shrinking total market.
From the client’s standpoint, Lynne Zappone confirmed these challenges. She indicated that while budgets are tight, she is still willing to pay for professional services help from firms that view themselves as committed team members who are willing to make the same kind of financial sacrifices that her team is expected to make. Lynne reinforced the importance of professional services providers sharing relevant ideas and information that can help solve immediate challenges.
The recent election and the resulting changes in the political landscape and the government’s active intervention in the economic crisis will create new opportunities for professional services firms. Clients will be looking for help understanding how the policy changes will impact their specific industry. The key here is industry specific knowledge. Immigration and labor laws, off-shoring, and the shift from retail to the internet are all hot topics for creating change. The critical issues will revolve around compliance and keeping up on human resources legislation and changes in the tax code.

The panel came up with four suggestions for moving forward:

1. Talk to clients about the impact of economic and political changes on their business and careers and stay close to them. Confirm your spot in the client’s inner circle of advisors. Building relationships with existing clients is the first priority before developing new relationships.
2. Develop insights and implications regarding the current financial crisis. Help identify issues, but more importantly, come up with implications, opportunities and prescriptive action-oriented recommendations.
3. Develop services that address current urgent needs and cannot easily be duplicated by clients or competitors. In addition to cost-cutting, clients need new thinking regarding revenue generation and customer satisfaction. Consider how you can help your clients grow despite the economy, not just cost-save. Make sure your offerings bring quick and significant ROI in 2009.
4. Provide your clients with flexibility and options. For instance, when developing proposals, be sure to provide a menu of options covering different project scopes and costs. Focus proposals on the most critical, pain-reducing elements. Be very cautious about discounting fees…the downward fee spiral is extremely hard to reverse.

In a nutshell, change and the confusion it creates is good for helping to generate new business in professional services…clients may need their closest advisors now more than ever.

To find out how you too can participate in similar dialogue visit: www.clientadvisorawards.com