Episode 27 Transcript

Banoo Behboodi: Welcome to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. I'm Banoo Behboodi and I'm thrilled to be back for part two of our conversation with Jessica Noble. If you miss the first episode, Jessica is the head of strategy and managing partner at Magnetic Experiences. She's also an author, a speaker, and an expert on business strategy and customer experience. If you haven't listened to part one, I highly encourage you to go back and listen to it. The topic was addressing the current environment, highly inflationary and how best to respond to that, and some tools to continue to maintain your margin while continuing the customer experience at a superior level. Jessica, let's dive in again, welcome.

Jessica Noble: Me too, thank you.

Banoo Behboodi: So in the last episode, we did talk about how to continue delivering to your clients, as I said, in an inflationary market, without having any kind of negative impact on your margins. We also talked about the tools professional services firms can use to navigate these challenges. But today I'm very excited because I've read your book, which was fantastic, by the way, The Five Customer Experience Mistakes you don't know you're making that are causing profit erosion. What I loved about it was a quick read, but it was structured in a very clear manner by highlighting the five critical mistakes that companies that are in a high growth path and need to scale quickly are making in terms of being able to maintain a consistent customer experience. But then you also very quickly touch on the impact that can have, and then you provide very tangible solutions on how companies can avoid that. So today we're going to dive in and use your book as a basis to understand what are the mistakes that companies do make. And how they can ensure that they address those so that they can be responsive in a highly volatile environment and be able to scale and maintain their customer experience. So with that, if you can just tell us a little bit about, let's start with the five common critical mistakes that are made by these high-growth companies that basically eat into the customer experience.

Jessica Noble: Yeah, these are the five things that I've seen working in the small to midsize business space. So I'd say anywhere just sub 1 billion in revenue and like you mentioned, high growth companies. The first thing is they're really flying blind without having the right data and insights at their fingertips. And if they do have them, they haven't disciplined themselves or their organization to apply that to have data informed decision making. So that's the first mistake that I see. The second is relying on heroes to deliver great experiences, and I talk about having heroes isn't the mistake. Overly relying on heroes to deliver great experiences is a mistake and a very costly one. The third is neglecting to dig into root causes, and this is where we keep solving the same fire and responding to the same fire drill over and over and over. And one of the issues with that is you've already delivered a subpar experience and then you're remedying it and not getting to the root of it. So you're not getting the benefit of all of this effort you're putting into deliver because it's reactive.

The fourth mistake is failing to walk in your customer's shoes regularly. When I talk to executives and we're talking about their customers, I would say more often than not, they're very confident that they know their customers, overly confident, I would say. And it's either one, very dated information. They talked to a lot of customers 3, 6, 9, 12 months ago, or they talked about a role in a company, the CEO or the CFO, as opposed to actually experiencing what they serve and deliver them first hand. So living their service, going through it, being put on hold, having a delayed delivery, trying to do a return, having consultants show up and getting off to a rocky and what can feel like an unproductive start. So that was the fourth one and the fifth one, and this one is so tempting, especially when times are tight and that is lacking a laser focus on your ideal customer or your target client profile. So in professional services, this is when we used to get more RFPs, but even when you know someone, they bring you an opportunity and you respond with a proposal or with an offer of services. But it's not quite in your sweet spot of what you do, and that bar of it's not quite in our sweet spot moves.

So there are things we can do opportunistically. It maybe isn't what we market for, but we have the skills and capabilities and we know how to do it. That may be okay, but when you move out a ring even further to clients that are a little smaller or a little bigger than what you're used to, they are in an industry that you're not used to. Or the one that I see the most, and this is with clients that are bigger than you're used to, is trying to move from the small to midsize space that you serve to moving to the enterprise space. And the expectations of those client sets are very different. And so when you start serving more and more clients outside of your target profile or target company, it can be very costly to provide an experience that they appreciate to the same degree that a client would that is in your target profile.

Banoo Behboodi: Yeah, a lot of what you just mentioned resonates because as an advisory for Kantata, when I get them engaged with a prospect or a client, a lot of times the challenge they're facing is exactly the fact that they are driving blind. And they don't understand what's going on in their professional services because they don't have the systems in place to help them. They don't have the processes in place to drive consistent data so that they can be predictive. So everything is reactive and really a lot of times when companies are coming to us, if they're not enterprise, they're high growth, they're having multiple levels of growth every year. Whether it's organically and inorganically, and they've gotten to a point where it's just not possible anymore. And it goes hand in hand with relying on heroes. And those companies, a lot of times they bring up, well, we have Jane who does this, and God forbid if Jane no longer is there, wins a million dollars and decides to leave, the system falls apart because it's not well defined processes enabled through technology. So that, yeah, Jane leaves, it's gonna be unfortunate and there will be some gaps, but it'll be very efficient and effective to close those gaps, and so on and so forth.

So going down the list of every one of your mistakes, it really resonated with me, but just wanted to go back to the ideal customer. And I think that's so critical and so many companies that are scaling quickly don't take the time to really do that analysis. And you did mention enterprise-level clients have very different needs and expectations than midsize or a sort of a commercial entry-level clients. And so once you understand who you are targeting and if you feel that you're prepared to take that leap forward and expand your go-to market strategy and expand that to enterprise, what are some of the tactics and strategies that you can use to make sure that you prepare to respond to that? Again, consciously now you've decided I'm ready to go after these enterprise clients, what are some of the steps and things you need to make sure that you're successful in doing so? Expanding that customer base.

Jessica Noble: The number one thing is now that you have, I'm gonna say a second, but you could have a third and fourth type of ideal client profile, you need to understand that profile and what is it that they want, what is it that they need, and what is it that they value? And truly, what are their expectations at every key point in the journey so that you can prepare to meet those needs. And the contract process can be kind of a classic one at the beginning, is how do they approach that process? And there are likely many more legal folks participating in that. They likely have things that they require in contracts, whereas you may have more flexibility with a smaller company. And then when you get to delivery, there's, I think, a lot of times more flexibility in terms of give and take with a small and midsize business.

Whereas with a big company, you would need to do potentially a lot more tracking to make sure that the contract is being enforced, that any changes are documented. Which these are all good practices to document and track, however, when you work with small and mid-sized companies, a lot of times the latitude for getting things done more informally is something that you become accustomed to. And if you fail to deliver, the way that you remedy that may be very different for, again, a small and midsize company as compared to an enterprise one. And what happens when you don't deliver may very quickly be out of the hands of the person that you contracted with. It may escalate out of their hands so much more quickly than it might in an SMB where you may well have been contracting with VP, senior VP, or even someone in the C suite. So understanding their wants and needs, understanding their expectations along every step of that support at the end of the journey. Another piece, what are their expectations? What are their SLAs, and are you set up to deliver that? And if you're not, putting together a plan to get there.

Banoo Behboodi: And so getting to the second part of your analysis in your book, which is, okay, what's the impact? What's the erosion that happens? What are these mistakes? What is the impact of these mistakes to sustaining revenue and margin and ultimately, that superior client experience.

Jessica Noble: It's not too difficult when you're going through and you see the five mistakes pop into your mind where you are making those. And so really gathering an inventory of the mistakes that you think that you're making and then doing a rough back of a napkin or on a bar stool coaster, what is the impact? How many times is this issue occurring? How much time is it taking? What is it costing us? Order of magnitude size? Because then you can do a quick two by two, which you have two axes that cross each other, which then makes quad four boxes. And on your two axes you can have impact and effort. So what's the effort to address this? What's the impact it'll have? And a great place to start to build momentum is the areas that land in their low effort, high impact.

So it's not gonna take a ton to fix them, but it's gonna have a big impact. And there are usually so many more of these types of things then you'll ever imagine. And a lot of times, as I mentioned, I believe in our previous conversation, you'll have a system and it can actually do the thing that is causing a lot of pain for whether it's your team members or your clients, but you don't even know that because you're not using that part of the system. Maybe you didn't need it when you implemented it, maybe it was deprioritized, but if you used it now or if you did a low code automation, you could address it quickly.

Banoo Behboodi: Identifying the low hanging fruits and going after those immediately would be a great next step to that. So then diving into the solutions, I know you sort of prescribe a step solution to manage this, do you wanna tell the listeners a little bit more about that?

Jessica Noble: Sure, it's not fancy, I'm not fancy. It's really, again, a way to think about, we need to diagnose the problem. A lot of times we can see what the mistake is or even more often we can see what the symptom is, but we don't know the root cause. So let's diagnose what's causing this. Is it that we're not addressing the root cause of something? Drill down into it, look at a little bit of the data. How often is this happening? What's it costing us? And again, it can just be orders of magnitude. Is it taking us two extra days a month to close out our books because we don't have a great monthly closed procedure? Is it taking us four hours a week to run and understand our utilization, our capacity? So you're gonna diagnose the problem, drill down just to understand the magnitude, then you make a decision. What are the priorities, we're gonna decide. And then the fourth one, do it, like stop talking about it, let's do it. I'm a get-things-done person. It's better to make a decision and do it rather than debate for weeks upon end on which should be the priority. Especially when you're starting with low-hanging fruit where the effort it's gonna take and or the out-of-pocket expense is typically fairly nominal.

Banoo Behboodi: So it doesn't have to be perfect. And to your comment that it's not fancy, I know I'm not looking, I don't know about the rest of the listeners, definitely not looking for fancy. I love simple because simple makes me understand and allows a path to success. So love that four-step: diagnose, drill down, decide and just get it done. You know, don't aim for perfection, aim for solving what you have and then continuously improving it. So extremely helpful, I highly recommend that our readers read the book. But before I get to that point, again coming to that personal element of just Jessica Noble, if you being an author, I'm gonna ask you a different question for this one/ I'm dying to know any recommended books, what's on your bed stand now that you're reading that you'd recommend to the listeners?

Jessica Noble: So I tend to have lots of books that I'm working my way through at the same time. One that I just picked back up and was going through so that I could refresh my memory was Death by Meeting by Patrick Lindsay. So he's the author that wrote The Five Dysfunctions of a Team and he writes in a story fashion so you actually feel like you're a part of a team, and then he is illustrating points from it. Death by Meeting, so good, he talks about all the ways that there’s just a time suck and then what can you do about it. So that was an excellent book, it's a very quick read. The other one that I'm working my way through is called The War of Art, it's how to break through the things that block your inner creativity. I would say it is considered a business book even though it doesn't sound like it. And if you haven't heard of the author, his name is Steven Pressfield. He also wrote a book that more people may have heard of because the movie, it's called The Legend of Bagger Vance, that was a movie. I don't know how long ago, it was with Matt Damon and Will Smith. But his book, The War of Art, so far, very interesting and I would highly recommend it, although I'm not through it yet.

Banoo Behboodi: Fantastic. So hopefully we'll have another session and you can tell us once you've finished the book, how your read is of it after that. If you would like to read Jessica's book, The Five Customer Experience Mistakes you don't know you're making that are causing profit erosion, we're going to be doing a giveaway. The first four people to email us at podcast@kantata.com will receive a copy in the mail. It is a really informative, quick read, I highly recommend it. Thanks again, Jessica, this has been a fascinating conversation. Thanks to all of our listeners for tuning in. As always, if you have any follow up questions for myself or Jessica, send us an email at podcast@kantata.com.

Jessica Noble: Wonderful, thanks so much for having me.

Banoo Behboodi: Thank you Jessica.