When a family member had some health problems a few years ago we began meeting with doctors. We marched into one doctors' office after another and offered our diagnosis of the situation, then asked to hear the recommended course of treatment. Finally we happened upon one who stopped us in our tracks: “Stop. You're diagnosing. That's my job. Tell me the symptoms.” We knew then we had found our doctor.
What can this professional teach us about selling agency services?
In my speeches I like to tell the story of my small town mechanic. I telephoned him one day and told him that my rear brake drums were out of round. He instructed me to pick up the parts, bring them in and he would replace them. A few hundred dollars later I was driving away from the garage when I quickly realized that my symptom – vibration – was still there. I returned. The mechanic looked the vehicle over and declared: “U-joint.”
Fifty dollars and a few minutes later I was off, problem finally solved, but I had first needlessly spent hundreds of dollars on brakes. At this point in my speech I'll ask the audience, “Who was at fault for wasting my money?” They almost without exception answer in unison, “You!”
This is where the fun begins as I bellow and screech that it was not at all my fault. I know nothing of the workings of cars or their brakes. My brother-in-law off-handedly suggested that it might be brake drums, and I, not wanting to look like I knew nothing in front of the expert, came to him self-diagnosed. But the mechanic, being the practitioner in the relationship, has a professional obligation to diagnose my problem before he spends my money to fix it. And when I come to him self-diagnosed he is equally obliged to validate my diagnosis.
You have the same obligation with your clients. As I illustrated in my first story above, any doctor who relied on my own diagnoses was not someone I returned to. Professionals diagnose before they prescribe.
Here are four points to consider when using diagnostics to help improve your product and your sales process.
1. Formalize Your Diagnostics
Almost every firm has its methods of diagnosing its clients' problems and opportunities, but too few formalize their diagnostics, package them up and brand them. Do you refer to your initial knowledge transfer (brain dump) meeting that begins most new engagements as a “briefing meeting” or is it a branded “discovery session”? Do you have a one-page outline that describes the process and outcomes, or do you just show up and start asking questions?
As I have written many times, there is much power in demonstrating that your firm has a formal, defined way of practicing your craft. It is highly reassuring to the client that your firm has a systematic way of going about solving his type of problem, has done this before, and is likely to deliver consistent results. Such defined methodologies begin with formalized diagnostics.
Make a list of all the means you employ (internally or through external research partners) to diagnose the client’s situation then write a one-page fact sheet on each. Give them each a name. This is the beginning of your brand diagnostics suite.
2. Charge More
If you are not employing formal diagnostics in helping your clients then you are leaving yourself open to two problems. The first is that by not defining your methods you are impairing your ability to improve those methods. The second is that you likely are leaving much money on the table.
Four Phases of the Engagement
There are four main phases to any client engagement. They are: 1 Diagnose the problem, 2 Prescribe a strategy or solution, 3 Implement the strategy, and 4 Ongoing re-implementation as necessary. The value you deliver, and therefore the margin you should command, is highest at the beginning of the relationship and declines steadily as you progress through the phases. The tactical work of ongoing reimplementation is commoditized and subject to pricing pressure. The upfront diagnostic and strategic work is valuable and so highly coveted that many agencies have repositioned themselves as consulting firms that only do this upfront work.
If you are delivering great value through powerful diagnoses then you should be benefiting through higher fees. Closing – securing the engagement late in the buying cycle – is all about reassuring, and if you have any doubts about the reassurance value of an accurate diagnosis, think of an MRI, a CT scan – even a stethoscope – or any other diagnostic tool that you would insist your doctor employ before “exploratory surgery”.
When charging for this upfront work, be sure to charge in big, fat round numbers that have nothing to do with the hours it takes to deliver it. The value you are delivering here has nothing to do with time.
3. Don't Break Out the Diagnostic
Yes, the value of a good diagnosis is high – usually higher than the solution on which it is based, however, separating the diagnostic fee from the total can sometimes be difficult for the client to swallow. Whenever possible, don't do it.
Imagine that you are proposing a $100k solution to a client and you assign a $30k value to the diagnostic portion of the engagement. What are you likely to hear? “This looks great, but we don’t need to do this first part.” It looks to the client like a $30k add-on that perhaps they can do without. Don't break the diagnostic out by itself. If the client is looking to save money and they think they can reduce the price by eliminating the diagnostic, they'll ask. “How much if we don't do the Brand Audit?” Your response is, “We always do the Brand Audit; that's how we begin every engagement like this one.”
In describing the diagnostic to the client you are merely showing them how you work, you are not trying to convince them to buy a diagnostic from you. “If you were to engage us this is how we would begin.” Only the most impertinent of patients would suggest to his doctor what diagnostic to use, and only the most incompetent of practitioners would allow the patient to direct the care in this manner.
Again, this is another area where defined methodologies are powerful: if you cannot demonstrate that you have a defined way of working, then the client may dictate to you how he wants you to work. He may impose diagnostics on you or keep you from doing them altogether. You will have little high ground from which to defend. If you can demonstrate defined methodologies then you can make the case that your outcomes are rooted in your process, and no, “we will not alter how we work.”
A Phased Engagement
Often you will try to close on a phased engagement when you cannot close on the whole thing. Any phased engagement should end after the second phase (prescribe a strategy), and not after the diagnostic. Essentially, a phased engagement begins with the client paying you to develop a plan – to diagnose and prescribe. So, if you have to break up your pricing for a phased sale, the first phase should include diagnoses and strategy. (Ideally, it should also include the beginnings of the creative interpretation of that strategy through something like a mood board, but this is a nuanced subject that I will address in a future issue.)
4. Don't Sell the Diagnostic
Beware: once you formalize your diagnostic processes, package them up and build case studies around them, you may start to sell process over outcomes. Many practitioners fall in love with their tools and a marketing communication agency with a new diagnostic process is no different. But bear this in mind: clients don't want to buy process; they want to buy outcomes. The process is important, but it in itself is not what you do or what you should be selling; your process is merely how you do what you do. Watch your language and make sure you keep the client focused on outcomes – repositioning, product launch, message management, re-branding, etc. and not on your fancy new discovery session.