Maintaining the Expert Position...After the Sale

Without turning everything into a power play, David provides seven sources of leverage that can help agencies maintain the leadership role in client engagements long term.

Transcript

Blair Enns: David, why am I not surprised to learn that the topic that you have chosen is maintaining leverage? The topic is power play dynamics, how to dominate your clients.

David C. Baker: Your podcast partner?

[laughter]

David: No. I don't know why I picked this. I just can't help myself. I'm just constantly picking just killer topics. Just really great topics.

Blair: We'll let the market judge that. The topic you've chosen is maintaining leverage after the sale and you point out in your notes here that I talk a lot about occupying the expert practitioner positioning in the sale. Then you want to extend that after the sale, after you're engaged with the client. If you do all the things right in the sale, you will enter the engagement being viewed as the expert with some power in the relationship rather than a vendor with little power in the relationship.

You want to pick it up after the engagement begins and talk about the finite number of assets that you have that allow you to maintain that power position or that leverage. Is that a good summary?

David: It is, yes.

Blair: If people have huge expectations here, you're probably going to disappoint them.

David: They're used to it.

[laughter]

David: Just a few tips I guess, and what got me thinking about this is that I hear you go on and on, not drone on and on about that power position in the sale but then I hear so many firms who they just give it up after the client is on board. I don't quite get that. I guess I do get it, but it just seems like if you're going to work that hard to have some ideal position through the sale, why not maintain it? If you want to maintain it, how do you do that and still be an ethical good human? We're not talking about beating up clients here.

This is more doing what's in their best interest even if they don't realize it.

Blair: Yes and I joked about power plays, but that's actually a really important point that comes up in the work that we do with our clients. When you're first exposed to the Win Without Pitching principles and the proclamations in the manifesto, if you have a high need for power and authority, these principles can really resonate with you. Then you can overplay that hand and we've talked about this in a couple of episodes. You can view every interaction with the client as a power play.

I've experienced it on my end too, as a buyer or a client and sometimes you think, "Can you just do this? Does everything have to be--" These power dynamics of you needing to be the expert, do they have to dominate every part of the relationship? I see it quite a lot and you make the point in your notes that you shared with me that you're not going that far. Let's not make everything a power play, but let's recognize that for you to do your best work, you really do have to occupy that expert position in the relationship.

That is the position that even when you enter the engagement in that position, it is inevitable that that position will be eroded. You will eventually be relegated to vendor status, then you'll park company and you'll go find a new client to replace that client with you once again in the expert position.

David: I am so glad you brought up that time element because you've talked about that quite a bit. I don't remember what episode, but we talked about that too, how it's just a matter of time, but it gets harder and harder to maintain this leverage, this power position over time. I failed to put that in my thoughts today, but that's a really important point.

Blair: Well, the way I would interpret this is I talk about if you think of the power position as being in the upper left quadrant, time on the x-axis, and power on the vertical axis. You enter the engagement in this power position at the beginning in the top left and then over time you devolve to this vendor position in the bottom right. What you're talking about here, you're going to list seven sources of authority or seven sources of leverage. You're talking about seven different ways to affect the slope of that line because it is a sloping line, it is inevitable.

I always say the new business person is responsible for the starting point on that line. Then the people who are responsible for serving the account, they're responsible for the slope of that line. I'm just interpreting it to my language, the seven sources of leverage. They're really about the ways that you can affect the slope of that line.

David: Exactly. I humorously often think about an image in my mind of parents watching a surgeon work on their loved child. Normally this doesn't happen obviously because of this reason but from the outside you can't really tell the difference between torturing a kid or doing mandatory surgery to save the kid's life. It looks wrong. If the surgeon had ill intent, it would be wrong, but the surgeon is doing what's required to save the child. That's what it looks like sometimes in your relationships with your clients. There's no virtue in just exercising power for the sake of power. That's one thing I really want to get away from.

Blair: You have seven sources of this leverage. What do you want to begin with? Might it be positioning, David?

David: [laughs]

Blair: It all starts here, doesn't it? Everything starts with positioning.

David: On my tombstone, he talked too much about positioning. It comes from positioning though, and we don't have to belabor this too much, but I just feel like the electric magnet gets turned on in conversations with prospects when the questions you ask, more likely the questions and the statements indicate so clearly to the prospect that you understand their world. That only happens because you've seen their world in multiple iterations. That only happens because of your positioning, which delivers those opportunities one after another.

What should be happening in your conversations with the prospects is they should feel like you have a camera in their office, and it should almost be spooky. If that's true, then why shouldn't it also be true moving forward? Of course, it is naturally true. The same things that you just say instinctively in a sales call, you'll keep saying those, you'll keep making those observations, but you don't want to hold back just because they're a client now. If you think something is true and you're not absolutely sure, then of course you can hedge it.

You need to keep making those same observations and holding your ground, standing your ground because of what you've seen. This is just really, really critical and it's so powerful. We understand how it's powerful in a sales conversation, and we need to understand that this is a part of the ongoing client relationship too. Not if you're being hired as a pair of hands, what you should do is shut up and do your job. If you're being hired as somebody who thinks and can speak into their situation because of your external objective, bold point of view, then by God, keep doing it.

That's so part of your leverage comes from your positioning.

Blair: Determining which role you've been hired for, that's really important. We run into this a lot. We're doing a lot of private team training these days of account managers. When you think of that sloping line and these sources of leverage that you're talking about, I think of these account managers who are in this dual role, and we've talked about this before in the episode. You contain multitudes. There are times when they have to show up as that pair of hands. They have to be this server responder, "Yes, we'll get that done, we'll get it done quickly."

Then there are times when it's in everybody's interest, including the clients, even though it might not feel this way for that account manager to push back and get the client to think bigger and maybe take bigger risk, commit more resources, et cetera. That knowing of when to do that is so vital. Fundamentally, I think the challenge of the slope of this line of you moving from expert to vendor is really the people in the front line, the account management folks who have to make that decision of when do I push back?

When do I bring that brilliance that we demonstrated in the sale where I finish the sentence and I make the observation and I keep bringing magic, and when do I shut up and do the work?

David: Speaking from the perspective of the agency here, you're thinking, "Okay, you hired me because you liked what I said at the beginning. You're going to hire my replacement because you like what they say more than what I've just dumbed down and gotten into a groove that just doesn't really highlight, didn't put any light into the situation. This is a pretty powerful one.

Blair: That's such a great insight. That brilliance that you brought, or your team brought in the sale where the client says, "Oh my God, I can't believe you know that. It's like you have a camera in our office." That same thing is going to happen to you. You would have been in this dumbed-down groove, and you won't really even have noticed that the relationship is devolved. Then somebody else just like you is going to show up and seem brilliant in a way that you used to seem brilliant. The first source of your leverage comes from positioning. What's the second one?

David: The second one is related to that, but it's just this constant belief. This must be true, and you have to do a lot of work to make it true, but you have to have excess opportunity. I know this seems very counterintuitive, but if you want to keep your clients and keep doing great work for them, you must not be afraid to lose them. I'm not talking about just in the sale, I'm talking about after you're right in the midst of a relationship. Now you don't want to pick your battles. You don't want to see every little disagreement as an opportunity to lose the client.

That's just stupid. There are going to be times when there's just a real misalignment of what needs to be done and you kindly present your perspective and you support it. You give them a chance to think about it, and they resist and then you decide, "Hmm, do I want to plant a flag on this or I'm just going to let it go?" Sometimes you just need to push back a little bit more. You're going to lose that power position if you are afraid of losing the client. You can see this when you have an agency that develops for whatever reason, a client concentration problem.

I've seen five different things that drive clients. You can just step back and you can say, "Ah, that's a sales-driven firm. They're really good at bringing work in." Then nobody is watching the back door and those clients just keep leaving out the back, but it's not a problem because they can keep replacing them. Or, you are a creative or a core-driven firm, where everything is about that, and clients are sort of patrons of the arts. Or, you are an account-driven firm, you are in business to keep clients happy no matter the cost.

Well, if that's not true, that last one of you, and you have a client concentration problem, you will inevitably become an account-driven firm because you don't want to lose that big client that represents way more of your business than they should. That's where you lose that power position and you become more of a waiter because you're afraid to lose the client. Part of why you need to have a really ideal client mix is so that you can fearlessly do great work for clients without the fear of great harm to your firm if you lose one.

That's where the second leverage comes from is just excess opportunity so that it gives you more courage than you would otherwise have.

Blair: We are repulsed by neediness as human beings. I've talked about this before. When your client senses the worst thing in the world would be for you to lose their business, just the dynamics are changed irreversibly. How do you maintain that? How do you keep needing this at bay? Your point here is excess opportunity. Excess opportunity means other clients not being too overweighted to one client. We've done episodes on that. It also means, you've talked about this before, just making sure that your opportunity exceeds your capacity.

Not growing the firm so quickly. I'm putting words in your mouth here, but maybe you can articulate it better than this. It's you want to put yourself in a position where you actually have to say no to opportunities that you would love to take on.

David: Yes, right. Exactly. If you keep saying yes to everything, then you'll keep increasing the size of your staff to fill this, and then you lose the opportunity to say no. That means you end up with some clients that are not ideal. It's a balance. It's like you need to be grateful for a client because of who they are and because of the opportunity you have to really impact them. If that equation stops, if either one of those stops, then bam, you need to move on and move on really quickly.

Blair: All right. We're talking about maintaining leverage after the sale, and you've identified seven different sources of that leverage. We've talked, first, it primarily comes from your positioning or your expertise, and the second one we just covered is leverage also comes from excess opportunity. What is number three of seven on your list?

David: It comes from calibrating how much you care.

Blair: You want to care a lot, right?

David: [laughs] As much as you possibly can, yes. Even if it means that it erodes your work-life balance, that clients are worth it. [laughs] We're kidding here.

Blair: You devolved into another spoof episode.

David: [laughs] We're ready for a third one, aren't we? We haven't really recovered from the scars of the first two.

Blair: Yes.

David: I have this image in my mind, and I don't even know if it's true and I don't know about the numbers, but it just helps me think about this. I picture that every human who's in an advisory role like you folks are who are listening to this. Let's say you've got 2,000 little chits, so to speak, little tokens, and every time you care about something more than your client does, you pull one of those out of the bag, you put it on the table and you never see it again.

Blair: A little piece of you dies.

David: Yes. It never regenerates and it's gone. If you think about caring more than the client does, in those terms, you're going to be a lot choosier about those times when it makes sense. Actually, there will be some times when it makes sense. Maybe it's the mission of this company, or maybe you're trying to do something that's going to help the team, or whatever it is. There are legitimate reasons for that, but if you go around doing that regularly, then you are wasting some of your engagement chips that do not regenerate.

Your leverage comes from the fact that you are choosing carefully what to care about. A client can sense this. This is really a pretty important to surface early in the sales conversations to figure out if you're sufficiently closely aligned so that it makes sense to work together because this stuff, it's important to keep going. This third one, it doesn't bite you really quickly, it just sneaks up on you after about seven years of business, and you lift your head up from the muck of the work that you're doing and you say, "Remind me again, I need to give myself a dope slap.

Why am I all wound up about the fact that my client is not taking my advice?" It's like, "Who cares?" It's a commercial transaction. Caring is valuable, but under-caring is bad for you, and over-caring is bad for you too.

Blair: It's interesting. Warren Buffet has famously said that he can make you a better investor if he gave you a punch card, remember punch-cards, like the coffee shop punch-card, with only 20 punches, so you only get to make 20 investments in your life. Therefore you have to think carefully about it. You're talking about this punch card that's got 200 punches of caring. Gone, maybe it should be 20. It completely resonates with me, this idea that under-caring is problematic and over-caring is just as problematic.

David: We need to calibrate our care.

Blair: You just leave pieces of yourself everywhere when you care too much.

David: For the record, I need a new calibration meter.

[laughter]

My old one's worn out.

Blair: Well, I think from the outside the persona is, you don't care, but I know that when you get into an engagement with your client, once they start paying you et cetera, you care. If they don't take your advice, it's not going to keep you up at night.

David: No.

Blair: What's number four on your list of seven sources of maintaining leverage after the sale?

David: Four, I don't know exactly how to phrase this, maybe I could just say your leverage comes from black-box models, but that doesn't mean too much without explaining it. What I mean is you need to move your advice-giving-out of a preference mode into a more scientific mode. I've loved the recent episodes we've done on that, but you need to build models that have some sort of a scientific primary research basis to it. Then when you're addressing a client situation, where appropriate you need to pull this out.

It's really hard to argue with that because they haven't done the research that you have for this. They haven't applied it to many, many firms. If you want to maintain this upper expert sort of position with clients, you need to do the hard work of moving beyond your preferences and your instincts and having better answers that-- Obviously, this is going to flow from your positioning. If you're a generalist firm, good luck with this. It just isn't going to happen. If you're a specialist firm, you start to see where you could dig deeper.

You start to see the connections and the patterns and maybe not just the correlations, but the causations. You build that into a model, and when inevitably this issue comes up with a client, you can pull it out. Now, the goal is just not power here to silence dissent. The goal is to actually make a difference for a client. This really helps not just in making a difference, but in quelling dissent that's just noise, that's just not necessary. Doing the hard work of developing models based on research is a really great way to maintain that leverage too.

Blair: It's part of the natural evolution of an expert firm. First, you stake out your area where you're going to compete, you spot the patterns, as you say, you develop a point of view. Out of that point of view comes a way of working a model. You get more scientific about it over time. You should get to this place where once you've been in business long enough, you should be able to talk about the client's problems and opportunities in a way that your competitors cannot with data that they don't have.

They haven't even stopped to consider to collect it in most cases because they don't see it as important the same way that you see it as important. I think you're talking about just the natural evolution of a firm. You should get to that point.

David: Yes. Here's a really silly example of this. I texted you a couple days ago and I said, "Hey, we should do an episode on why people think they didn't close the sale. I have this instinct that they're not thinking about it very correctly, and so I asked somebody to go through the last 170 firms and chart how many times they thought they were losing business for a particular reason. It backed up my instinct but it was a very specific number and now all of a sudden, if you're listening to that-- We'll probably do an episode on it. All of a sudden, when you hear that number, you say, "Oh, wow, that's interesting." It's not just me sitting here with a pad asking you what you want for dinner, I'm making specific suggestions to you, based on research I've done in interviewing other people that have had this dish, to use a silly example. Anyway, it's a really powerful way to do it. I see more and more firms doing it and it's a really welcomed development.

Blair: Just to flesh out that story a little bit, you text me and said, "Wow, how many firms do you think, say they're losing? They lost the last piece of new business because the price." I had a guess and you had a guess and then I think within a day, you came back with the data on it and a graph and the number was-- you and I both knew it would be high but man, was it high, so we will do an episode on that.

David: Yes, I can't wait.

Blair: That's a great point, it's like, hey, I've got this theory, well, let me check the data.

David: Right.

Blair: All right. that's number four on our list, black box models, what's number five?

David: Number five, this one really makes me nervous because there's great potential to misuse this one but it's the idea of confidential data gathering. I'll just give you a very specific example that I think will shine a spotlight on it, listeners will be able to apply this to their own work. If I'm doing a study on say, alignment of the firm like the degree to which the team members, the employees aligned with the firm, then I might use a survey tool. In that, I might discover that there are some real management problems here and so I feel obligated to talk about that with the principal.

You might feel obligated to talk about that same kind of a subject with your client or whatever. If they're defensive, their first reaction is going to be to disagree with it. At that point, if what you've gathered is confidential, you can't really share the specifics but you could plant the flag at that point and you say it kindly but, "No, this is really true, I know. I'm not making this up. I saw this in about 80% of the responses, you have a brand problem. I know it's jarring to hear it and maybe there's some nuance around this, but you really do have."

They ask for more information about it and you just say, "Well, I interviewed nine of your executives, and I promised confidentiality, so I have to stick with that but I hope you can trust me that there is a problem here." Anyway, this can get misused really badly because you can make shit up and then just tell people, "Well, I can't reveal my sources," but if you're not going to do that, in your consulting practice, then don't do it. It's a bad thing to do but if it's real, there's something about data gathering that they haven't seen and if it's confidential, it can backfire really quickly but it can also be very useful.

Blair: This is really powerful in the sale from my point of view, where let's say you have multiple decision makers, and you would use a needs assessment, you would survey each of the individuals, you get the responses back, you now have information that the client does not. It exists in the client organization, its opinions or points of view of various people, but nobody has consolidated those points of view in an anonymous survey and gotten these people to say what they really think. It really changes the power dynamics in the sale.

You're saying that, in some engagements in some firms, that's another ongoing source of leverage is the fact that you have this confidential data. I suspect it's more powerful in firms who do internal communications rather than in marketing because I think when it comes to understanding the market, you're not really able to get information out of the market necessarily, that the client could not themselves. It's really about pulling this confidential data out of the organization in a way that the client can't get that.

If you're in a business where you're doing that, that is a profound sense of leverage, you have data and an understanding of the client's organization that they actually can't get themselves firsthand, they need a third party to get it and that third party is you.

David: Yes, because these are the people who have had the opportunity to share this information over and over again, and they haven't had the courage to do it and they need you to present this to them.

Blair: Your sixth source of leverage is prepayment. I love this one, where did this come from?

David: This came from my own experience, my own failed experience just honestly. I've been doing this for 28 years and the first three or four years, it was a very typical payment terms, some sort of down payment so that I can buy my ticket. Then another payment right before I come and then the final, I want you to hand me a check when I leave. That was actually the way it happened. Well, every once in a while I get through the whole thing and I can still remember this one woman in Denver, as I'm getting ready to leave and pick up the check, she said, "I don't have it."

I was like, "What, you're telling me this right now." It was fine, she eventually paid. Then later I realized I caught myself just holding back saying what needed to be said because I hadn't been paid everything yet. I just said, "This is counterintuitive and nobody would suggest I do this but I'm just going to try it." I'm 100% paid upfront, no exceptions, every service. That's where it's been for 25 years. What that does is it weeds out the folks who need payment terms for some reason and some people just asked for it instinctively, they don't really need it.

They just have never heard of somebody getting all the money upfront. I remember working for Adobe back when I used to work for big corporations but I don't anymore. I said, "Yes, I'd be happy to work with you." I think it was $30,000. I said, "But it has to be prepaid" and the guy on the other end said, "I didn't hear you. What do you say? What do you mean by that?"

Blair: You haven't met my procurement department.

David: "What is this prepaid word you've used I don't understand that. Can you spell it?" I said, "No, I'm serious. It all has to be prepaid. I'd really love to work with you but it's got to be prepaid." He said, "We don't do that." I said, "I can't work for you, then I'm sorry." Of course, they did. They signed it. This is back in the days of fax, sent me a long agreement 28-page thing and faxed it. I just crossed out every page and faxed it back. I said, "This is just not how we work." I don't do that with my normal clients.

This is why I don't work with big clients because it never worked all that well. With normal clients, I love the fact that this is really a statement about my own weakness. If I had a backbone, I would say what needed to be said regardless of the financial implications. This is really a statement about my weakness here and this is how I address it. Obviously, you folks listening, you're not going to be able to adopt this, there's no way you're going to get all your clients to prepay. I told you about my one successful attempt to do that, it just isn't going to happen.

What you could do is you could think about your prepayment terms, not in terms of just cash flow but in terms of maintaining that power position because every one of you who's owed a little bit of money has stepped back from putting your foot down because of the fears about getting hung out to dry. Then the longer that lasts, the more of a woose you are, until you get so pissed off and you think about draining your kids' college fund, that you just come out of yourself and say what you should be saying in the first place. I'm just trying to connect in people's heads payment terms and maintaining that power position.

Blair: The lesson is, the terms matter when you receive the money has an impact on how you're going to show up in the engagement. Think about it. I think the big mistake in pricing, the common mistake is pricing is thinking that there's just one right way to price. I'm not trying to criticize your wonderful model. I love that you collect all the money upfront and have for 25 years. I think when our listeners are forming engagements with clients and negotiating the terms, that's one of the things that almost never gets thought about.

How are these terms going to affect the way that I show up in the engagement and therefore the leverage that I might have?

David: The sale is the sample you say?

Blair: There we go.

David: This is why clients are more concerned with client concentration than agencies are. I don't know if it still shows up but for years in an RFP, the client would say, "If we grant this work to you, what percentage of your business will we represent?" The reason they didn't want that to be a big number is they were afraid they wouldn't get great advice if it was that way. It's just interesting how that tables have turned there.

Blair: All right, the last source of leverage for maintaining leverage after the sale is flexible scope, baby. What do you mean by that? Just sell sprints?

David: That's no scope, that's just selling time in big batches. Don't paint yourself in a corner. Leave yourself a little wiggle room. If the client is not a good client and they're using too much of your time at the beginning or they're not listening to you, then just tighten it down within the scope. If they're a fantastic client and they are efficient and how they use you, give them more if you want to. I know this is a little bit counterintuitive because we are usually interested in really tight scopes because we're trying to protect ourselves from the client but there's also a way that you could use scope to your advantage.

Just go back, read through the scopes that you've written recently and imagine that the client relationship has gone bad. You're going to see some things in there that just make your heart sink because you're going to have to keep doing those things. That's not going to benefit the client and it's going to be a waste of your time. This is a smaller issue but it's just an interesting way to look at your proposal responses around scope, especially if you reinterpret what the client is asking for in your own scoping terms.

Blair: You make the point here in your notes that you can't have this flexibility in scope without prepayment but I'm not sure I understand that. Do you want to unpack that a bit?

David: If you've already been paid for everything, then you are in charge of the relationship, essentially and so you can really do what the client needs. If you're a doctor and the patient wants X from you and you just know that's not going to be a good use of time and money, you can just say no. The same is true how these tie together in that if you're not worried about getting paid, then these scope decisions are a little bit easier especially if you've given yourself a little bit of wiggle room in the documentation.

Blair: Got you. Client tries to push the scope and you think, "This is out of scope but I haven't been paid yet so we'll just do this one and another and another." We're talking about ways to maintain leverage after the sale and you've identified seven sources of leverage, positioning or expertise, excess opportunity, calibrating how much you care. I really like that one. Using black box models, confidential data gathering, prepayment, and flexible scope. I think about these dynamics a lot in the sale itself. It's nice to have a discussion on how they come to play and what the sources of leverage are after the sale.

I think I'll build it into my next training program.

David: With attribution or--

Blair: Licensing.

David: You're going to have to prepay for it, buster.

Blair: Is there any final thoughts you want to share with the listener before we part?

David: I Just hope the people listening here are really good at the work they do and have good hearts. I don't want any of this to be misused but I think in the right hand it's a really powerful way to make your business a lot more sustainable over time.

Blair: I've said this before but I often think of the old Maxwell Smart TV show where at the end of the show, Maxwell Smart speaking of the villain would use this line, "If only he'd use this power for niceness instead of evilness." There is this issue of don't turn everything into a power play but when you do need to exert some leverage to maintain that expert position in the relationship, these are your seven sources of that leverage. Thanks, David this has been great.

David: Thank you, Blair.