While attending a recent annual conference I ran into Jim-just as I do each and every year. Jim is short and stout, usually a little disheveled but typically with a jovial attitude-A Santa Claus without the boots, red robe and “ho ho ho”. This time, however, something was different. He wore a look of frustration like the one I used to give my father when he tried to explain quadratic formulas and I just wasn’t getting it.
After we exchange the usual “hellos” and “how are you” Jim says, “My partners are telling me to give up on the valuation business. They gave me an ultimatum: if I want to continue pursuing the valuation business then I am on my own. I just can’t seem to penetrate this market and build my practice!” he adds. “I feel like I am failing myself, I am failing my partners and I am failing my family.”
“What have you done to build your valuation practice?” I ask.
“Well, I tried newsletters for a couple months, and that didn’t work. I met with an attorney here and there, but that hasn’t brought in business. I’ve attended a couple of networking meetings, but that didn’t work, either. I’m not sure what I’m doing wrong.”
A common conversation among BV professionals
Jim is not alone in his frustration. Over the past decade and through my travels, I have had the same conversation with numerous colleagues trying to gain market share and build their valuation practices. Their development efforts are not achieving their objectives - so perhaps it’s time to consider the feedback from these results, and change our collective approach. As Warren Buffett once said, “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”
Today we are faced with numerous marketing challenges in our practices that may seem insurmountable. The level of competition in the industry has increased tremendously as has its sophistication. We live in an era of spam filters, mind filters, mass deletions and constant change. We are typically bombarded with over 5,000 messages a day through various media. Viewed through this lens, navigating the BV marketing landscape is no less rocky than trying to ski the 4,800 foot drop from the top of Half Dome in Yosemite National Park. That’s just as frustrating and perilous a journey as building a valuation practice without the proper planning, tools, and systems.
How do you invest your marketing time and money?
We need to understand that each and every day of our business life, we make an invesent in our professional futures:
We invest our time. Every day, we decide what gets our focus. Do I golf at the local club or attend a networking lunch at the local Bar Association? No matter who we are, how wealthy or poor, our background or our base abilities: We are all given the same amount time each and every day. What determines who is successful and who is not is how that time is invested.
We invest our energy. After determining where to invest your time, you must put sufficient energy behind the decision to create measurable progress towards your goals. For example, if you say you want your BV practice to be worth $XXX, then you’ll need to spend your time and energy in activities specifically geared to building that level of practice.
We invest money in our operations. Typically, you should strive for 2 to 4 times return on your marketing dollar. For instance, an ad in a professional journal for your valuation services should generate revenues well in excess of the cost.
We invest our creativity. Given the high market competition and constant media bombardment, we are constantly searching for unique strategies to set us apart from the crowd, including exceptional marketing or client relationship concepts, or planning techniques that we provide our clients.
We make each of these invesment decisions on a daily basis, mindfully or not. To be successful in building a BV practice, you must make conscious decisions that propel you toward the desired results. In addition, you’ll want to have a consistently-executed system and process to accelerate your results.
Statistics show that nearly half (48%) of marketers typically give up after the first contact. A quarter (25%) give up after the second contact, 12% give up after the third, and 5% give up after the fourth. All told, the vast majority (90%) of marketers will contact their potential referral sources or customers four times or fewer with no results. This is precisely the situation my friend Jim was in. What he didn’t realize is that statistics also show it takes a minimum of seven contacts to make the sale.
Tips and tactics to build a BV practice
What follows are a few tools and tactics that helped build my practice from nothing to a substantial national presence. These strategies also helped create a systematic, automatic process of communicating with contacts that is both efficient and cost-effective.
1. Understand your capabilities. At the core of this process you must first determine where you currently are, and then where you want to go. This is no different than planning a road trip to Chicago; knowing the destination is not enough to determine the best way route, which will change depending on whether you’re starting from Ohio or New Mexico. An assessment of your current starting point includes knowing your particular capabilities (education and designations), BV market requirements, capital and professional capacity.
We’ve developed a tool called the Practice Silhouette that allows you to understand the various elements of your valuation practice-including your employees, expertise, relationships, service and product in a matrix format. The process helps you determine whether you are a commodity, a unique provider or a “standout” within the marketplace. The one-page matrix give you a quick “snapshot” of your valuation practice position as it exists today. It allows you to identify your base (where you are), gaps (where you want to be), and bridges (how to get there).
2. Create and implement your marketing plan. To truly succeed in business valuation, you cannot be a secret. People must know about you before they can decide whether to use you. You must become a recognized authority or go-to person. Many valuation professionals are technical experts, but not recognized experts. They get the work accomplished accurately and effectively, but no one knows they exist.
You must raise the market’s awareness of your existence, expertise and knowledge. This will build your reputation as well as your value in the marketplace. To accomplish this, you need to structure a marketing plan around a systematic process of building market awareness of your existence, your reputation and your business. The system has got to take place on multiple levels. The goal is to develop an ongoing relationship with referral sources over time; remember the “minimum of seven” rule.
Fortunately, our current Internet age allows us create a systematic marketing plan that is both effective and cost-efficient, more so today than even a decade ago. Historically, the majority of business development efforts went toward the use of direct mail (such as newsletters) and direct contact (such as lunch meetings).
Now your marketing plan must include both online and off-line marketing strategies, including those that reach the masses-and those that use more intimate, one-on-one methods.
The off-line tactics still include focused direct mail (client newsletters, press releases, postcards, etc.), seminars and educational programs, articles and networking meetings. The ultimate desired outcome is the creation of solid relationships in the marketplace.
Given current technological developments, online tactics should permeate all of your marketing channels. The focal point is a properly designed website, which serves as a resource for site visitors and provides a systematic mechanism to capture the visitor’s data. Once the system has captured the date, it will communicate with the visitors on a regular, automatic and cost effective basis.
A capture system with autoresponders allows you to provide ongoing resources and communications to thousands with a simple push of a button. An autoresponder is an automated delivery system that sends prescheduled emails, audio mails or video mails to all of your “captured” contacts at certain designated intervals. After the initial setup, the delivery process runs on its own. In my own practice, I use this system to provide over 9,500 colleagues and referral sources access to my E-Audio Alert on a regular basis with no mailing costs. It is also a system that can be used to automatically deliver a report, article or some other digital benefit to a person that visit the site such as our 5-Part Mini Audio e-Course on the 5 Deadly Sins of Building a Practice Through Internet Strategies.
These online tactics lead to others such as telephone seminars, webinars and a continuous flow of resources to your referral sources. For instance, I recently assisted a CPA create a video e-mail to his tax clients discussing some new rules affecting their 2006 tax returns. We did this with a $50 camera and a computer while the CPA was sitting at his desk, and then immediately e-mailed it to over 300 clients - a personal message with a level of authenticity, articulation and sincerity that no letter or email could capture. If marketing is the process of creating relationships, which I believe it is, these new technological tactics allow us to reach and touch our potential referral sources and clients in new ways.
Be committed and consistent
Only a committed, consistent use of this multi-tiered marketing will create visibility. Visibility leads to experience. Experience leads to credibility. Credibility leads to a reputation and reputation leads to marketing momentum. Marketing momentum results in growth for your valuation practice.
Each of theses strategies and tactics has a specific syntax and frequency to assure a consistent connection with your referral sources. In addition, you need to consider goal setting, strategic visioning, rapport building skills, controls and procedures, engagement management issues and other practice development factors we don’t have the opportunity discuss here.
Many of these approaches are considered non-traditional, and you must have an open mind to consider them in building your valuation business. Jim has proven to us that doing the same thing but expecting different results doesn’t work. Try expanding your references; you will be surprised at the results. As Albert Einstein once said, “We are boxed in by the boundary conditions of our thinking.” Don’t allow yourself to be boxed in: Get on with your success, and do it with conviction.
As for Jim, he is now consciously making the decisions of how to invest his time, money, energy and creativity. He put a structured marketing plan in place by completing a Silhouette Matrix, identifying and implementing specific strategies such as autoresponders, postcards and an article campaign. His plan executes systematically and automatically and more importantly, is producing results. I expect to see the old jovial Jim at the next business valuation conference.
Mel Abraham is an author, Adjunct Professor (USD Law School), and award-winning speaker & consultant. He has created numerous online training courses and practice tools at http://www.ValuationEducation.com, and http://www.BuildAValuationPractice.com. He can be reached at mel@melabraham.com.