What is the real value of the professional design services in your firm? Like quality, the meaning of value might seem slippery and elusive, but it needn’t be. One simple definition is that value is cost divided by benefit.
The tracking and measuring of value to clients has always been difficult, time consuming and largely, subjective. Useful measurements have been elusive in the past and current techniques are often inadequate and sometimes even misleading.
Few firms actually measure the performance of their firms well. Now however, we are tracking with firms of all sizes who are developing more sophisticated methods and measurement systems. These feedback loops are changing best practice definitions and creating more relevant organizations.
Your firm’s credibility is a “truth” that is understood either correctly or incorrectly.
Oscar Wilde said, “The truth is rarely pure and never simple.” When firms are trusted for offering real value, clients will buy from these firms again and again and will tell others of their special value. These “truths” can be discovered through measuring and testing the value propositions in the ever-changing marketplace. Firms that measure well begin to understand that “change” is opportunity’s nickname.
Even the best architects, engineers, and designers do not believe that their practice is everything it could be. Thus, today we see new interest in measuring the value of services as a big marketplace differentiator. The quest to find more value and communicate it has never been stronger.
This new reality of practice today places increasing pressure upon firm leaders to know themselves and their strengths and weaknesses. And once these are in place firms can measure and watch their culture “live” their own distinctive metrics of value. Measurement can help to understand the essence of the firm and its promise to clients.
Metrics of Value: New Yardsticks of Future Performance
What is the real value of the professional design services in your firm? Like quality, the meaning of value might seem slippery and elusive, but it needn’t be. One simple definition is that value is cost divided by benefit. How much do you pay for something, and what do you get in return? Was it worth the price? That is the essential measure of value and clients think it even when they don’t voice it.
There are several trends underlying the changes made in how to measure and monitor your relative strength in the marketplace, in the six examples that follow.
1.Service excellence is being redefined. Service as defined by the clients will be the most critical measurement. Clients are becoming more knowledgeable, better educated, and more discriminating. The definitions of excellence are changing. Quality gaps are actually widening–getting weaker, in some design firms. Sadly, some firms are compromising their realizable value propositions. The most trusted brands are the adaptive design organizations and they understanding the metrics as the first step to developing new value.
2. Saturated markets are forcing transformation. There are price pressures because most markets are glutted with identical service providers. This is true in all the design professions. Best practices differentiate by adapting to new opportunities faster.
3. Technological advances are redefining design services. Tech advances are being adopted by leading firms but the masses of firms are laggards and thus without the significant competitive advantages of the newest technologies. Technology advancements and productivity increases in real time are keys to success.
4. Gap analysis is uncovering new zones of opportunity. The greatest potential for growth is found in analysis of how firms can close those gaps in terms of relevancy and uniqueness to changing client needs. Once we understand how the clients see us, we can create services with new experience and new impact.
5. Innovation is nothing without great execution. Innovation brings better performance. Underlying this achievement will be professional practice assets that we sometimes refer to as “content advantage.” You can boost client retention and profitability by measuring and communicating your process strengths. Execution of innovative process makes the difference between those who master change and those who talk change.
6. Transparent and bland services weaken design professions. These are the service providers who are becoming the new sub-professions. While their production skills may indeed get better, their economic value added is shrinking. Unless some spark of new life or meaningful content can be delivered in ways that thrill the clients, these firms will grow increasingly marginalized in the changing marketplace. Only those firms that turn rapid change into new opportunities are respected for offering “real value.”
Unique ideas, talents and processes are what makes some firms better than others. Leadership without them will not produce growth or success. The best diamonds are worth considerably more than their not so lustrous counterparts because they are more unique and rare. The best diamonds are a metaphor that illustrates where your professional services can out shine others in the future. Successful firms recognize the importance of differentiating their practices from all the others that they compete with for clients. These firms migrate their differentiation to stay strategically fit in the marketplace by recognizing the importance of constantly testing and re-testing the value of their services.
Don’t Keep Your Clients From Buying Your Services
Commissions that could be closed are often not. Sometimes nothing gets said, but the work migrates to other firms. And countless numbers of clients are denied the opportunity of receiving full, satisfying service from firms that squander opportunities for business growth and personal fulfillment.
Clients are the greatest assets of the professional firm. They are an asset you can leverage, simply by creating more value. That is the result of measuring, testing, and monitoring the metrics of value in the changing industries in which design is practiced.
By measuring your core values and your business metrics you can positively pull, push, change, and jump forward to the next levels of success—for more fun—more significance. You can score a huge victory simply by being the firm to communicate “inside information” about the value truths you provide. Let your clients know what you do for them. Clients won’t appreciate what you’re doing for them unless you spell it out. Articulate it. Make it fun to know. They want to accept your “new value.” This can be expressed through the metrics of value.
—James P. Cramer