Adventure of Strategy

Why is it that a bottle of water at a theme park or sports event costs $5, when you can get basically the same stuff out of a faucet for free?

Why is that the reportedly "most expensive meal in New York" (at Masa Restaurant on the 16th Floor of the new Time Warner Centre) is basically the same kind of food as one can get from sushi bars across the country, at a fraction of the price?

The answer, of course, lies in the quality of the client experience. There are very few areas in which a professional service firm can differentiate itself (i.e. make itself different to its competitors in ways that clients value) as effectively as by driving the standard of the experience that clients enjoy when working with the firm. So we can learn from Masa Takayama and, with current research showing that upwards of 70% of Fortune 1000 clients are dissatisfied with the service that they receive from their law firms, the conclusions of that learning just have to be a no-brainer, too!

But is it strategic? Well, if strategy is about keeping the "crown jewel" clients that you want to keep, and about attracting new clients that have cool work, that value you for your skill and professionalism instead of your cheap price and that tell the rest of the market how great you are, and about being able to emulate Masa Takayama in your price point, then yes: I'd say it is very the very essence of strategy!!!!

In the water example, the quality of the client experience is driven by simple supply and demand. There are a limited number of vendors licensed to sell refreshments, so you pay the inflated price or go thirsty.

The Masa example is, of course, different. (So are many others - for instance the Starbucks Experience which is also top-of-mind for me right now as I type this posting in the Starbucks at Paddington Station in London, having just stepped off the plane from Johannesburg.) In short, there is no protected market. So the drivers that make people willingly pay a (sometimes enormous) premium are more complex.

So far as the Masa experience itself is concerned, it is exquisitely described by Anthony Bourdain in his article, Too Sexy for Wasabi, in BestLife (hat tip to Brad Feld) :

"....as you sit there, blood rushing to your head, lips engorged, hands trembling slightly, saliva thickening, you're absolutely certain that no one-anywhere on the planet-is going to be eating better than you tonight. You're alone, in the nose cone of a rocket headed for the epicenter of gastro-culinary pleasure. And there's nowhere you'd rather be."

and

Finally, there was Kobe beef that, with each bite, squirted its pampered, oft-massaged fat between the teeth. I believe, to the best of my recollection, anyway, that at this point, we switched to sake...."

Clearly, there is a whole lot more to delivering a wide range of legal, accounting or other professional services, than serving up the "world's best sushi." But, as I said earlier, there are nonetheless lessons to be learnt. Especially about ensuring that what we do to launch the level of appeal to our target market to stratospheric levels is very precisely focused. This is far, far more than just about the sushi (or the technical proficiency with which professional services are delivered.)

Like specialty restaurants, professional service firms also have a very clearly definable key target market, within their wider pool of clients. Almost invariably, when we analyze a firm's business, we discover that 80% of the revenues accrue from 20% or less of the client list. Obviously, it is on the needs of this 20% that a firm needs to focus itself in striving for excellence in client service.

How does one go about this?

The first step is obviously to identify those 20% of "crown jewels" on the client list. If you haven't done then math to identify yours yet, then you really need to. I'd almost guarantee a surprise!

The second step is to work out what would comprise a "Masa Restaurant" experience for those clients, in the context of the professional services that you deliver. This involves taking a long, hard and often uncomfortable look from the 'outside,' at how clients experience interacting and working with the firm, across the whole spectrum of the engagement from the initial marketing contact right through to invoicing and post-matter contact.

Deep dialogue with the key clients is critical. Far beyond the usual 'satisfaction surveys.' For instance: there is a growing trend towards developing client teams to "bulletproof" key clients against predation by competitors, and several of Edge's clients that we have assisted with these have reported spectacular results from such client teams. Certainly, it makes the necessary dialogue easier and more profound.

Another key to all this is to focus not only on what clients say they want, but also on those things that they want, that they don't even know that they want. These may be latent technical needs that they have, or will have within the forseeable future; they may also be new and innovative ways of delivering services and adding value. With the former, most firms are still playing catch-up. With the latter, most have hardly even scratched the surface. Yet the opportunities to do some real good here have never been greater, especially given emerging technological capabilities.

Finally, the firm needs to execute the actions required to move from being a suburban sushi bar, to the 16th Floor of the new Times Warner Centre on Columbus Circle. Execution, of course, has its own set of challenges as I've blogged about here and here and here and here.

Paradoxically, though, it is both more important and easier to seize opportunities that will truly have clients going "Wow!" today, than ever before.

Comments, as always, are most welcome and may be posted below.