Independent research from Hinge and the National Australia Bank indicates that professional services firms don’t know their clients as well as they think they do. This stems from a lack of client feedback.
Lack of client feedback causes sub-optimal client experience which hurts profits.
From first principles this is self-evident.
Strategically, a systematic effort to know your clients leaves you better placed to satisfy their needs. With better client experience strategies firms should do a better job of retention, increasing positive (and decreasing negative) word-of-mouth, and therefore have stronger organic growth rates.
Tactically, regular feedback serves as quality assurance: helping you spot and react to dissatisfied clients and not letting poor performance fester into a poor bottom-line.
But just because something makes sense, doesn’t mean it’s true, and this leaves room for people to kick the can down the road with respect to proactive feedback.
Scepticism is rooted in these objections:
Objections 2-4 give professionals a place to hide when their true objection is objection 1.
4 is pure conceit. The idea that the person paying for service is in no place to judge it is silly. Yes, clients are paying for your expertise. They’re also paying for peace of mind, ‘bedside manner’ and having their problem solved.
They alone are in a position to judge the service they received per se.
However, Objection 4 is an attitude, more than an opinion, and this post won’t change anyone’s attitudes. Instead, it deals with Objections 2-3 to help firms overcome Objection 1.
Empirically, this doesn’t play out.
Hinge Marketing’s research indicates that, 70% of the time, clients will admit that they don’t really know what a firm does – which indicates a significant communication break-down between the firm and client. This lines up well with our data, with “Communication” having the highest variance, and lowest average, of any metric we measure.
More directly, NAB’s research indicated that 26% of SME clients thought their law firms didn’t understand their business, as well as a host of other discrepancies regarding clients’ perceptions and law firms’ perceptions of client relationships. It also found only 31% of law firms seek feedback regularly to bridge this gap.
Until recently we had to rely on first-principles. They made sense, but as I’ve already mentioned making sense doesn’t imply truth.
Here’s the empirical evidence from Hinge’s research:
Firms who frequently conduct formal client research grow up to times the rate of those who don’t. The marginal payoff of even occasional research is 6x growth.
These numbers are stark but not surprising. Doing a better job of knowing your clients, systematically and backed by evidence, means your service initiatives will be rifle shots not scatter-gun. And to torture the metaphor, you only have so many bullets – so it’s important that your client service initiatives are prioritised based on evidence.
Another less obvious benefit is that regular measurement helps staff to stay more accountable and motivated. What gets measured gets made, and client satisfaction is a great thing to shoot for.
Getting client feedback is always important and never urgent. That’s why firms almost always procrastinate in implementation.
But the longer you leave it, the more money you’re leaving on the table, so the best time to start is now.
Systematic client feedback is just one of the benefits of a FirmChecker account – you can claim a 30 free trial here.
About the Author
Ben Farrow is the Managing Director of FirmChecker and consults with Beaton Research + Consulting, the leading management consultants to professional services firms in Asia-Pacific. He holds commerce and law degrees from the University of Melbourne and digital marketing certifications from Northwestern University.