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How you can beat cheap: 4 ways to compete against low-cost BV providers

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Greetings from the Cumberland Gap. The RV is parked at the tri-state intersection of Kentucky, Tennessee, and Virginia where we will be exploring the passage blazed by Daniel Boone back in 1775.

I hope you found our last conversation about creating Authority-building videos to be useful and that it inspires you to start using video to market your expertise. Remember the stats from a previous newsletter: the average person spends 6 hours per day watching video of some kind vs. 19 minutes per day reading text of all kinds.

On to this week. I am frequently asked about how to compete against low-cost BV providers. And, parenthetically, low-cost BV providers are not just the online services of our world. They are also found amongst traditional practices that, lacking differentiation, compete on the basis of price.

And if you’re new here, welcome aboard. This is what we do!

The year is 25% over. Are you 25% of the way toward reaching your 2019 practice building goals? What habit do you need to add or drop to get there? Email me and I’ll try to help … my inbox is always open!

The BV industry is becoming more competitive every day … more professionals doing the work and better informed prospects getting fee quotes. There’s tremendous pressure to lower prices and conform to the demands of “the market” as online firms like BizEquity gain traction. And this pressure is not limited to my coaching niche of 1-3 person BV practices because I hear even some big valuation shops are feeling the burn.

If you’re trying to build a profitable, sustainable practice, pricing can be daunting. But here’s the good news: you can compete if you are willing to do some things differently. I am not saying these things are easy … if they were, everyone would be doing them.

#1 – Narrow your focus and become the expert

You’ve tried the generalist route, and it isn’t working. The key to differentiating your practice from the low-cost options is to narrow your focus and build a brand as a leading expert in a standalone practice area or industry niche or a group of related areas or niches.

Then – like the Beatons, Dietrichs, Fannons, Grabowskis, Hitchners, Mercers, and other titans in our profession – work to build your reputation as the go-to expert for that specific area or niche. Write a newsletter. Publish articles. Launch a podcast. Speak at conferences. Write a book. Pick something, get started, and the rest will fall into place.

#2 – Build and maintain your referral network

For many of us, our referral sources are our clients. So you must build a network of referral sources who know, like, and trust you, believe in your expertise, and understand the value you provide. They’ll send you prospects who are a good fit and have already been prepped to pay your fees.

Thus, a major focus of your marketing should be maintaining relationships with your referral network and frequently reminding them of what you do, why they can trust you with their clients, and what makes a good referral. This activity is a large component of my 2019 BVFLS Practice Development Marketing Plan.

#3 – Demonstrate the cost of low-cost alternatives

It’s important to alert prospects of the hidden costs that may accompany a low-cost service as it relates to that prospect’s reason for wanting/needing a valuation. Hey, there are some reasons for which a low-cost valuation may be “good enough.” But it’s easy to point out why business owners who built companies over their lifetime and are now ready to exit shouldn’t rely on a $500 valuation to tell them what the selling price is.

And I think it’s important to have a script ready so that when you need to explain the hidden costs to a prospect it comes off as a thoughtful rejoinder and not a disparaging rant against all low-cost providers.

#4 – Eliminate the competition

Not by tilting at their windmills but by transforming your practice. If there’s too much competition in your market, create a new segment for yourself. If you can accomplish this, you’ll be selling in a vacuum and there will be nobody your prospects can price-shop you against. How can you enhance, combine, or structure your services to create something that nobody else offers? Read Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant for some ideas and examples.

What can you do to place yourself in the Blue Ocean category of one? What resources do you have … what relationships can you leverage … what unique value can you create … how can you mix, match, or restructure your current services? It requires innovation and a willingness to pivot. And if you haven’t thought about this before, it’s worth blocking off some time to consider the possibilities.

So what

Competing successfully in these conditions requires us to accept that many prospects will choose the low-cost provider every time … no matter how much it offends our sensibilities. So don’t chase those clients.

Instead, focus your business development efforts on a practice area or industry niche where you can stand out for an audience who will pay premium fees because they recognize the superior value you provide.

In real life

In many industries, there are insanely profitable businesses that charge premium fees and still win business despite the availability of free alternatives. Look at water.

Even though experts say we have high-quality potable tap water, millions of people buy bottled water every day … and bottlers position themselves to charge premium prices within this category (think Fiji).

If an entire industry can thrive by selling water – readily available for free – at high prices, there’s no reason for you to panic when you hear about low-cost competitors. But you must have a strategy to attract the right prospects who have the means to pay your fees and see the value in doing so. Because that is what you do when you hire a professional service provider.

Related Posts

Big Data Valuations: What we BV experts are up against
Big Data Valuations: What you said about them
Our fees are determined by the market. Which market?
Has anyone noticed that we are being disrupted? (a must-read)

Cheers!

 

 

 

Action Items:

– If you like what I write about, tell a colleague.

– If something resonates and you want to reach out directly, email me.

– If you think we share common interests, connect with me on LinkedIn.

– If you want a sense of how well your practice is working for you, take this Practice Self Assessment.

Does your website speak the right lingo? Here’s how you can tell.

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I hope you found our last conversation about newsletter writing tips to be useful. While doing good work for the current clients you serve is important, your potential clients need a way to find you and understand your perspective. Writing a newsletter is one way to remove the barrier between just doing good work and communicating the kind of good work you do.

On to this week. What is the lingo that your website should speak? The word “lingo” is my homage to a book by Jeffrey Shaw I recently read of the same name … the subtitle being, discover your ideal customer’s secret language and make your business irresistible. Does your website do that for your firm? Does it speak the lingo that attracts the clients you want?

And if you’re new here, welcome aboard. This is what we do!

One thing I found last week: Your Clients Pay You to be Effective, Not Efficient … a LinkedIn article by Tim Williams who reminds us to be overly obsessed with delivering the results (the ends), not doing the work (the means).

If you believe your website is not the lead generating/prospect converting tool it could be perhaps there is a reason. Because if you’re not getting the results you want, it may be that your website is not speaking to the right people. Or you’re not saying the right things to the right people via your website.

So … in this context lingo is your clients’ secret language. It’s the words and phrases and jargon they use to describe their operations, services, and issues. And building a website around your clients’ secret language is one key to landing more clients of the same variety.

So … how do you know if your website speaks, or speaks to, your clients’ lingo? How do you get the attention of the specific clients you want to reach within seconds of them arriving on your website? How does your website show them that you are the best (only) person to serve their immediate needs?

Instead of me suggesting what you must do or should consider, let me perform one of my favorite coaching exercises with you: put yourself in a potential client’s shoes. When you are looking for a specific professional service and you land on a firm’s website …

#1 – Do you feel like you are in the right place?

Does the look/feel/style of the website resonate with you? Does the website create some kind of connection … an emotional familiarity, if you will?

#2 – Does the website speak to you?

Does the website use the words and phrases and jargon that say the firm behind this site understands you … your operations, services, and issues?

#3 – Do you see your problem?

Does the site have testimonials or case studies that you self-identify with? Are the language triggers in #2 written in a way that makes you feel the firm is in your head? That they “get” you? Because you are wired with a need to “see” the problem before you will seek a solution.

#4 – Do you see your solution?

Does the website present a clear roadmap showing you the benefits of working with the firm, how (what options) to work with the firm, and what will be the outcome of you working with the firm?

Got it? Cool.
Now you know how you want to feel when you land on a website. Do you think the kind of clients you want feel that way when they land on your website?

So what

To speak the lingo of the clients you want to work with, you need to know how they think, what attracts them, and what makes them feel as if they belong. And the best way to do that is to serve one particular kind of client.

Because if your website speaks to everyone, it speaks to no one. Because clients don’t want to feel targeted by you, they want to be drawn to you.

And that’s why generic, we-do-everything websites don’t work. Because a website can’t possibly speak, or speak to every client’s lingo … just to the clients you want to work with.

In real life

Speaking the right lingo doesn’t just relate to your website. It should be part and parcel of all of your Authority-driven communication efforts, whatever form they take.

Reading that can help

LINGO: Discover Your Ideal Customer’s Secret Language and Make Your Business Irresistible by Jeffrey Shaw.

Tips for Getting Your Audience to Stay on Your Website Longer by John Jantsch.

Related posts

How Do You Know If It’s Time to Update Your Firm’s Website?

Is Your Website Missing Any of These 3 Critical Features?

The #1 Thing BVFLS Clients Look for on Your Website

 

Cheers!

 

 

 

Action Items:

– If you like what I write about, tell a colleague.

– If something resonates and you want to reach out directly, email me.

– If you think we share common interests, connect with me on LinkedIn.

– If you want a sense of how well your practice is working for you, take this Practice Self Assessment.

Want to look like an expert? Stop listing all of your services.

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I hope last week’s conversation about Sisyphus inspires you to think about how you could augment your BVFLS practice with a 1:many side hustle. Break out of the rut you’re in by relying less on pushing the 1:1 client service boulder up the hill just because everyone else does it.

On to this week. When I started doing BVFLS work back in the 90s, the body of knowledge was relatively small and the valuation mechanics were not that intricate. It was relatively easy to be a jack of all trades, master at all … an expert at all, if you will. And so we did it all. We need to stop doing that.

And if you’re new here, welcome aboard. This is what we do!

One thing I found last week: “Most People Use LinkedIn Wrong” from the blog of Chris Brogan.

Most of us play in the sandbox called LinkedIn. Chris offers some thoughts around two of LinkedIn’s primary functions: posting and connecting. Do you know what to post? Do you know who to connect with? You will after you read this.

With little effort, we can dash off a dozen reasons for getting a business valued. Here are the first 12 I thought of:

  • 409A
  • Bankruptcy
  • Buy-Sell Agreements
  • Charitable Contributions
  • Employee Stock Ownership Plans
  • Exit Planning
  • Financial Reporting
  • Gift and Estate Tax
  • Litigation Support
  • Marital Dissolution
  • Merger & Acquisition
  • S-Corporation Elections

But if you have a list of services like this in your marketing content, including your website, you are telegraphing to leads and prospects that you are a service provider, not an expert. Because, today, no one can be an expert in all of these services. We may be able to adequately perform several of these services, but we are not an expert in all of them. And our leads and prospects know that.

Why? Because here is what has changed in our BVFLS world/industry/profession since those Wild West days of the 90s:

  • The number of appraisers (choices) is increasing.
  • The body of knowledge has expanded 100x.
  • The businesses we value are more complex.
  • The audience we hope to serve is more educated.
  • The triers of fact we must go up against are more sophisticated.
  • The valuation mechanics are more intricate (anyone attending a recent Hitchner webinar can testify to this).

We are all BVFLS experts, but there are only a few experts within any given field of BVFLS services.

Today, I believe the best strategy is to keep the messaging of what we do much more targeted by focusing on the specific problems we love to solve and are best at solving – specifically for whom and in what situations – so leads and prospects can self-identify themselves as potential clients for us!

The goal is to attract our ideal clients (while repelling everyone else), start a conversation (literally) so both parties can assess if they are a good match for each other. Only then can we go into a deep dive and comprehensively explain the process of what we can do and reveal our expertise.

So what

Listing a lot of BVFLS services pigeonholes us into the role of a service provider who sells commoditized products instead of an expert who can solve problems in a way that our leads and prospects might not even be aware of.

In real life

Do you want/need to move from service provider to expert? It’s a fundamental step that I work on with all of my coaching clients. Because when we elevate ourselves to expert status, we do the work we want, attract the clients we enjoy serving, and get paid what we are worth.

Cheers!

 

 

 

Action Items:

– If you like what I write about, tell a colleague.

– If something resonates and you want to reach out directly, email me.

– If you think we share common interests, connect with me on LinkedIn.

– If you want a sense of how well your practice is working for you, take this Practice Self Assessment.

Your message IS the mediums

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There are only 3 days left to get your 2019 BVFLS Practice Development Marketing Plan … availability ends Friday at 6pm PT.

I like the concept, and it reads like this is you and from the heart.
Michael Gregory | Michael Gregory Consulting

So if you read my first newsletter of 2019, you know my theme – or overarching goal – for this year is impact. It’s the first time I’ve ever had a theme. How is this for impact?!

Hey, what’s up! I’m Rod Burkert. And welcome to my Practice Development Corner, the place where business valuation professionals like you come to learn how to turn the practice they have into the practice they want.

I didn’t need to shave my head. I wasn’t going bald. It wasn’t a double-dog dare. And I didn’t lose a bet. It was a bucket list thing. And definitely something outside of my comfort zone.

But I like it … more than I thought I would. It’s given me a new perspective in my personal life – a different energy level and a greater inclination for trying new things – that has spilled over into my professional life. And from this, my 2019 theme of impact emerged.

Now I am not suggesting you should shave your head. But is there something you want to do? How about doing more to reach your audience?

Because now more than ever, we need to be more omnipresent to – and with – our leads, prospects, clients, and referral sources in the channels where they consume content … particularly in the form of video and voice. Here’s why.

Mary Meeker, of Kleiner Perkins venture capital firm fame, publishes an annual report on internet trends. In her 2018 report, she researched the various ways people spend their time online. The result? The average person spends almost 6 hours online every day.

However, a study by the US Department of Labor Statistics says the average person spends only 19 minutes reading every day – and that is reading of all types.

Think about that: 6 hours online, but only 19 minutes reading.

So if you are relying on things like JUST text to reach your audience, you are unlikely to capture their attention. But you won’t capture their attention with JUST videos or JUST podcasts either. Because it’s never just one medium that will reach your audience … it’s exploiting multiple mediums consistently.

The good news is that your content doesn’t have to be perfect. It just has to be good enough to get your audience to spend their time consuming your message regardless of its form. It should also be educational AND entertaining … because that is what captures YOUR attention.

So, will you jump into video or voice in 2019? If you don’t see other people in our profession doing this, that’s more of a reason to amp things up now and deliver ridiculous amounts of value to your audience … a natural outcome of YOUR intention to create impact this year. Remember, things are only uncomfortable before you do them.

That’s it for this episode. How can I help you move in this direction? Let me know by taking just a few seconds to like, comment on, or share this video. Thanks for watching!

Cheers!

 

 

 

Action Items:

– If you like what I write about, tell a colleague.

– If something resonates and you want to reach out directly, email me.

– If you think we share common interests, connect with me on LinkedIn.

– If you want a sense of how well your practice is working for you, take this Practice Self Assessment.

How do you differentiate yourself from large firms?

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I hope you found our last conversation about using HARO (Help A Reporter Out) inspires you to sign up and start growing your authority by sharing your insights with journalists who need your expertise for stories appearing in national news outlets.

On to this week. I just turned in my 42nd Practicing Solo interview for NACVA’s Value Examiner. That represents seven years of interviewing some of our profession’s seasoned and new sole practitioners. One question I always ask is “How do you differentiate yourself from large firms?”

And if you’re new here, welcome aboard. This is what we do!

The question I ask when I start every newsletter is the same: does it pass the “So what” test … will what I write help you grow or strengthen your practice in some way.

So, what’s the one thing you’re struggling with most when it comes to getting the kind of work you want? Email me and I’ll try to help … my inbox is always open!

The responses to that differentiation question generally fall into one of two strategies:

  1. Because it’s just me, prospects know that I will be the one completing the project.
  2. Because of my lower overhead, I can charge a lower price to get the work.

Note: Based on my experience, these strategies are applied not just by solos but also by smaller valuation practices. And there are insights here for larger and large valuation firms as well.

Because it’s just me

The because-it’s-just-me strategy is the antithesis of “hey prospect, several people are going to be involved in your project … from more junior to more senior as the work progresses … and it will be ultimately be reviewed for a few hours by the partner you first had contact with.”

The because-it’s-just-me strategy can work if we are truly an expert in the industry niche or practice area straddled by the project. Otherwise, it doesn’t matter if we are the only one completing the project if we have never done that type of work before. And if the project is important enough to the prospect, s/he is going to ask for proof of expertise.

The because-it’s-just-me strategy also works if the project, now a case, doesn’t involve thousands of documents (I almost gave my age away by saying “dozens of banker boxes”) that must be reviewed before we can determine what we need to do first. But since we are solos, what if we get swamped … either by this case or by other cases in our pipeline?

Because of my lower overhead

The because-of-my-lower-overhead strategy works if we believe we don’t provide the same value as the big boys, won’t get the same results in the same time frame, and therefore, we’re ok with charging less for the work we do.

The because-of-my-lower-overhead strategy also works if we want to compete on the basis or price (and let’s not kid ourselves … that is exactly what we are doing) and we don’t have any other way to differentiate ourselves.

The because-of-my-lower-overhead strategy is the one I wrestle more with because I certainly charge something less than the big boys, but not significantly so. And if the prospect is willing to pay Large Firm $X, why shouldn’t they pay Small Firm the same amount … IF Small Firm can deliver the same result in the same time frame.

Is the prospect’s outcome worth more BECAUSE OF Large Firm’s higher overhead? Is the prospect’s outcome worth less BECAUSE OF Small Firm’s lower overhead? (When I ask the questions that way, don’t the answers seem obvious?)

And yet this strategy persists.

Own your positioning and messaging

My 4 Pillars of Practice Development model will tell you that positioning is who you serve and messaging is what makes you different. If you want to differentiate yourself from larger and large firms you have to own your positioning and messaging.

What do I mean by that?

Some prospects won’t be for you – clearly, the ones you don’t have the expertise to serve – regardless of whether you’re the only one working on the project or how you price the work. So don’t waste your time with them.

Rather, take the opportunity to actually stand out to the prospects and for the projects that are a fit for you.

What do I mean by that?

Big Firms are aircraft carriers – ungainly, slow-moving ships who can’t speak as openly and honestly as you can because they don’t want to risk turning anyone off.

So don’t play it safe. Aggressively communicate who you serve and what makes you different. How? Try some of these ideas:

  1. Demonstrate how technology makes you just as capable as Large Firm.
  2. Price with options to show you are more flexible than Large Firm.
  3. Cut your report lead time to show you are more nimble than Large Firm.
  4. Provide a portfolio of your work to show you are more transparent than Large Firm.
  5. Talk to your client weekly to show you are more proactive than Large Firm.

In short, build a brand that confirms you are a more credible option than Large Firm.

So what

In my opinion, the because-it’s-just-me strategy is much more viable than the because-of-my-lower-overhead strategy.

So don’t try to pursue both strategies.

Why?

Because a cheap expert is an oxymoron!

Enough said.

But in reality, the way to differentiate yourself from Large Firm is to actually be different than Large Firm … starting with some or all of the ideas listed above.

In real life

As Ron Baker says: Don’t price the service, price the client.

When price comes up, say that you price every engagement based on the level of skills, knowledge, and experience that you bring to the table.

And remember, you are not small. You are agile and process driven, which allows you to produce consistent, measurable, efficient, and effective valuation solutions.

Cheers!

 

 

 

Action Items:

– If you like what I write about, tell a colleague.

– If something resonates and you want to reach out directly, email me.

– If you think we share common interests, connect with me on LinkedIn.

– If you want a sense of how well your practice is working for you, take this Practice Self Assessment.