[Top Agency Series] Pricing and Positioning Strategies for Professional Service Firms With Tim Williams

John Corcoran 10:23

I’m curious, what led you down that path, because you had been president R&R Partners, the five office advertising agencies in the top six in the US, which was responsible for developing the what happens here stays here, a campaign, or Las Vegas, which who hasn’t heard of that you’ve seen it everywhere, the massive success. So it’s not often that you see someone leaving, you know, to pursue something completely different. When they have that level of success?

Tim Williams 10:51

Well, it wasn’t so different. I mean, it was still I’ve spent my entire career in the advertising agency business in some form, either working in agencies or having agencies as clients. So what I do now, it might, the vast majority of my clients are still at agencies or kind of all over the world, but I’ve got a kind of an academic streak, and my siblings, older siblings are all college professors and PhDs. And I saw I always wanted to write and, and teach, write a book. And so I thought, you know, I was still pretty young, as consultants go in my late 40s. I thought, you know, I want to give this a go. Writing, Speaking, teaching, and I decided to focus my business, exclusively in the area that I felt that I knew best. And I think I think, you know, that helped me. But yeah, so I’ve been in the same line of business. In fact, sometimes I feel like I, because I worked so closely with the principals of agencies. I feel like I never, I’ve never left the business. I’m still walking, you know, I’m still inside agencies every day of my life, either physically or virtually.

John Corcoran 12:12

Yeah, it’s funny because I say something similar. When people ask me about leaving the practice of law. I feel like I still advise businesses, but I just advise them in a different way. Unfortunately, I don’t build by the hour anymore, or also probably want to put a bullet through my head by now. Because absolutely insane. just drives you nuts. I want to get back to what you mentioned about AI. But before we do that, there’s something big that happened. You know, as we record this now, in August of 2023, about three years ago, three and a half years ago now, which was the pandemic. Let’s talk a little bit about how that affected professional services firms before we get to AI,

Tim Williams 12:48

sure. Well, I, I can tell you how it affected me. And I think most consultancies, I had spent my life on airplanes prior to that every day of my week traveling somewhere in the world. Because what I do is so specialized, my market is global, and I don’t have a single client in my timezone. You know, it’s all somewhere else. So it tested the question, and I’m sure you’ve talked many times with your guests about this, that thought tested the question, Can you can you run a business like this successfully, virtually? Do you really have to be there? And, of course, we’ve all proven Yep, we can work very effectively virtually. And now, the vast majority of the firms I work with, have hybrid work environments. You know, I was just on a Zoom call this morning, with a firm in their headquarters are in London. But of course, they we had people from from other parts of the world all I would say most of them working from home. You know, you look at the background, you can see their kitchen and their bedroom, right? You people at the office, is it funny how that used to be verbaten?

John Corcoran 13:56

Yeah, no. And now it’s like people walking around via a washing machine, but it doesn’t matter, dog in

Tim Williams 14:04

The background, is all par for the course now. So that’s all acceptable. And they have they have policies, most of them that they want their people to come in the office generally two or three times a week. Otherwise, they can work. You know, they can work wherever they want, as long as they do their jobs. Well, as long as they produce the outcomes that they’re expected to

John Corcoran 14:26

write right now. I imagine you have clients that come to you stuck deep in the billable hour, and can’t even imagine maybe they’re unhappy with it, but they can’t even imagine how to get out of it. And they have you know, I’m sure a series of questions about about that sort of thing. Where do they usually start? Where are they most stuck when you have that conversation with them?

Tim Williams 14:52

Well, I was one of them. By the way, when I first met Ron, I thought this guy is crazy. He obviously doesn’t understand the agency business because we could never, we could never survive without dying that might work for them. Now that works. And then all the objections which I’ve now heard a million times, that works, if you’re a larger firm, we’re too small or that works. If you’re in the East Coast, we’re in none. Paducah, Kentucky, that works. You know, all of these reasons why it won’t work for you. But the central, the central thing that the light that goes off inside the heads of professionals, when it comes to the billable hour is when you when you show them or when you just point out, you know what, the rest we are alone in this archaic, industrial age, revenue model. The rest of the business world has all sorts of interesting, innovative, creative ways they price their products and services, none of which are built based on billable time. Steve Jobs never did a timesheet, and he built a pretty successful business. None of your clients do timesheets, and they run successful businesses. And that is usually pretty provocative like, Well, that’s true. None of our clients do timesheets. So how do they? How do they run their companies? How do they run their businesses? How do they measure forecast resources and measure profitability? I say Yeah, exactly. That is all doable in professional firms. Let’s just step back and adopt modern pricing methodologies. It’s not anything revolutionary. It is simply catching up with the rest of the business world. And that’s usually that’s when people kind of understand. Yeah, okay, if the rest of the business world can do it, I guess we can show us how. 

John Corcoran 16:45

Yeah, so the imagine it does, at times, required to rethink, okay, what is the ultimate result we’re striving to achieve for the client? What do they want from us? How do we break that down into different components? And maybe price it based on deliverables or price it based on achievements?

Tim Williams 17:01

Yep, that is the right, exactly right. That is the first essential step. We’re trying to move firms away from selling inputs, which are hours of staff efforts, activities, to at least selling outputs, which, as you just said, are deliverables, actual work product, and, and in some cases, an outcome. So yes, you can be paid by results if you’ve got the right kind of client under the right circumstances, but that will only be 10% of your revenue. Over time. Mostly, you’re going to be moving to models where you’re going to be paid for, for the actual work itself, not the time that goes into it, the actual work product itself. Mm hmm.

John Corcoran 17:47

And I’m, I’m kind of drawn to this, you know, you have 130,000 followers on LinkedIn, you’ve written books, you’ve spoken extensively, stuff like that. Creating content, it which is kind of the new currency of, of internet companies needs to do that. But I’ve noticed that professional services firms that are stuck in the billable hour really struggle with the idea of creating content because it’s not the same as money. Yes, God, Bilbo. Right. When you when you remove yourself from that, then it kind of frees you up. And you notice that companies and firms are more likely to create content, which fuels their growth. Is that a fair connection?

Tim Williams 18:27

Yeah, I’ve never I’ve never heard anyone make that observation before. John. That’s, that’s, that’s smart. Yeah. Right. We feel constrained in all sorts of ways that that’s why that’s why there’s such a lack of proactive behavior inside professional firms. The chief complaint among clients, about agencies is, well, they’re very, they’re very reactive. They do what we ask, they work hard, but they’re not proactive. They don’t do anything that we that we didn’t request. They don’t give us ideas we didn’t ask for and why is that? Well, I mean, you just said it. There’s it’s not billable. So therefore, when you remove this idea that time is money, and that I actually strongly believe in you know, economists would agree, time is not money. Time does not represent a cost. Time is a constraint. Office Spaces cost you know, paper clips are a cost. But time is simply a constraint it doesn’t represent directly represent a cost. We run a pretty simple business and professional services. We don’t have complicated inventories and warehouses and, and things like that. We’re a fixed-cost business. And it’s a simple business. Yeah. So we don’t need we don’t need we teach you the idea. You don’t need time to either the price For your external client-facing reasons and you don’t need it internally for operations, you can still you can still forecast and allocate resources without timesheets.

John Corcoran 20:10

Let’s also talk about specialization. A big challenge for a lot of professional services firms and agencies is how much to niche down and whether it’s a good idea for them frequently. One of the objections is that, well, I don’t want to miss out on opportunities. You know, why? Why would I turn away someone who’s willing to pay me business? Let’s talk about that for a little bit. And what you realize?

Tim Williams 20:34

Well, that’s the essential first question, and that of any business, professional services or not, and the there is so many consulting engagements that began with an organization coming to us describing their problems, which they believe have to do with structure or organization or operations. And in the first 10 minutes of doing some discovery work, most of the time, the vast majority of the time, we discover. No, actually, it’s a positioning problem. You don’t have a business strategy. You’re you’re attempting to be all things to all people. The you know, the most hated term in the professional service lexicon for me is full service. Right? What? There’s a meaningless term if there ever was one. What does that mean? That opposed to like, half service or parcel service? Right? No, no firm can ever possibly be full-service. And yet they use and abuse that term all the time, they the, the, if you ask Chat GPT to write a positioning strategy for a law firm, which I’ve done, and it’s interesting. It will spit back the essential predictable, and we are a full-service integrated, serving a wide variety of clients in multiple industries, you know, it’s just the same stuff that is in effect. It’s the absence of a strategy, right? 

John Corcoran 22:10

Yeah, yeah. So yeah, it was gonna say that, you know, one of the first firms’ law firms that I worked for, when I was practicing law was kind of one of these full, it was a tiny little firm. Still, it was, quote, unquote, a full-service firm in the sense that they wouldn’t turn away anything, anything game tickets, but as a result, they wouldn’t get referrals for anything, because they didn’t define themselves in anything. And they also didn’t take the currency of business coming in the door, that wasn’t a good fit for them, and then refer it out to other referral partners, which is great currency, at least in the world of law. Your thoughts on that? And how does it affect referrals?

Tim Williams 22:47

Well, yeah, I mean, the essential argument for positioning is to step back and ask the question, what is it that clients really buy from you? What is it they buy? They don’t, they don’t buy time, you might sell time, but they don’t buy time, what did they buy, they buy expertise. And you can be expert in something, you just can’t be expert in everything. So when you attempt to spread yourself through so many different industries, you lose credibility, you know, clients, clients are looking for somebody with an ability to solve problems in their business in their sector. And the deeper you go, the more you become a brand in demand. The more here’s your and that, you know, that impacts referrals, right. You’ve mentioned a few names David Baker, Blair Enns, are people that we refer business back and forth all the time. We run very specialized businesses. But then the question about expertise is, is the first essential question. If you’re starting a law firm, or you’re thinking about your business strategy for the coming year, you can be world-class in something you no matter where you are. And think about, think about the market for a generalist. Like a family doctor, where do they draw their their market? From their own zip code? What’s the market for pediatric neurosurgeon? Worldwide? Worldwide? Yeah. See how this works? That says, that’s another lightbulb moment for professionals. They say, Oh, I see. So if I want national clients and national business and I want prospects who will get on a plane and travel 2000 miles to do business with me? The way I do that, is by becoming a specialist, not a generalist. So

John Corcoran 24:47

Let me ask you this, because imagine you’re getting this from your clients. Now. Where does that leave us? If we’re in a world where now more than ever with AI with Chat GBT expertise is a click away. And really in-depth, thought-through expertise.

Tim Williams 25:04

Yes, but experience, as you know, which is a dimension of expertise, experiences, wisdom and insight that comes from I imagine AI will be able to claim this sometime fairly soon. But the experience that comes from a professional who’s spent their career being briefed by a client and being able to step back and think, you know what, I’ve seen this problem before, I’ve seen this before. And I’ve seen it with these dynamics in these dimensions. And, and that’s something that that, you know, AI doesn’t really have the context, to see a business problem the same way a human being would, at this point, I think that’s our ace in the hole for now. But no doubt, no doubt, AI will change the nature of the professional services world in a massive way. 

John Corcoran 26:07

And on the flip side of that, I imagine you’re saying these professional services firms that they need to be studying how they can leverage AI in order to do the work that they do faster and less expensively.

Tim Williams 26:18

Yeah, and the best ones already are, the best ones are identifying you know, I make this distinction that we are in two businesses, we’re in the magic business. And the logic, business magic is the ideation problem-solving innovation that comes with expertise and experience. Logic is the daily, you know, filing writing briefs, filing is writing a press release, if you’re a PR firm, production producing ads if you’re an ad agency, so the kinds of widely available repeatable services as logic Well, AI is perfectly suited for that, go ahead and turn AI loose on, let them write your emails in your press releases. And that and most firms already are engaged in, using AI AI for those kinds of things. On the magic side, even that, you know, you’ve read all the articles about visuals, generating visuals, writing music, developing scripts, that’s pretty scary. And there are plenty of reasons why AI isn’t quite as good at that as humans yet, but certainly, you know, turn AI loose on match on logic. Now, no argument against that magic, you know, that will come that movie, that’ll be a line that keeps constantly moving?

John Corcoran 27:52

Yeah, I never heard of it that way. Magic and logic. That’s such a great way of kind of combining the alchemy that you need to combine. We haven’t talked as much, or at least not expressly about the kind of brand building. And I know that’s a key component of what you do. Where are we left in? It? Has things changed at all in a world where we have AI in terms of firms defining their brand, has that affected branding in any way?

Tim Williams 28:22

I think so. I mean, I think that you have to look at that question in a slightly broader context that we live in an over-communicated society, where we’re submerged with messages. The, what’s happened is that we grew up in a society and in a marketplace where there were limited communications channels. And they were regulated, for the most part, with the birth of the Internet. We now live in a marketplace with an unlimited supply of media channels. Right there, hundreds of 1000s of new media channels are being created every single day. So that is what has changed the nature of branding more than anything, is that we were swimming in options for how do we get our message out there. And consumers are, are more and more fragmented. It’s more and more different. We’re more and more resistant to any kind of commercial messages. We pay a premium for premium subscriptions that filter out the advertising. And so it’s it’s made the job of most advertising professionals much, much harder. Much harder.

John Corcoran 29:43

Yeah. I mean, I often say that, you know, every business can be its own media channel these days. It really needs to be in many ways. Well, this has been great. I want to wrap things up with my question and I call my gratitude question. I’m a big fan of Expressing gratitude, especially to those who helped you along the way. Who would you think who know appears contemporaries? Who would you want to acknowledge?

Tim Williams 30:09

Well, I’ll answer that with a quick story. I was, uh, went to New York thinking when I was a young, you know, just graduated from college thinking, if I want to get serious about a career in advertising, I’m going to move to New York City, I’m going to do the Madison Avenue thing. I interviewed with several multinational agencies I had offers from three of them. I really did not know what to do was walking down the street one afternoon, and one of the people that we interviewed interviewed me at one of the firms Marsteller happened to be walking down Third Avenue, caught my eye, and he walked over to me and he said, Tim, he remembered my name. He said, we really want you to come to work for us, we think you’d be a great fit for us. His name was Ted French. He persuaded me he hire me. And he became a mentor. That with whom I retained a relationship until his dying day, which is just a few years ago, he attended my daughter’s wedding, he came out and vacationed with our family. I only worked for him for four years, but his impact on my life because he took me under his wing and, and taught me so much. And was such a role model for me that I stayed in touch with them in my entire professional life.

John Corcoran 31:28

You got a good pattern of taking those people that you admire, and then building a lifelong relationship or collaboration with them.

Tim Williams 31:35

I believe in it. I just learned so much from so many people.

John Corcoran 31:39

Yeah. All right. I lied. I have one more final question. Favorite film composer. Are you a John Williams guy? You are Danny Elfman’s guy.

Tim Williams 31:49

Wow. But that is a that’s a pretty good question. I think I’m going to have to say, Elmer Bernstein. If you know, the score to Magnificent Seven. He wrote a lot of the iconic Western film scores. But that’s a really tough question. You know, Howard Shore. Would be in there. Who doesn’t like John Williams? Yep. Yeah.

John Corcoran 32:13

Yeah. Amazing. body of work. Tim, this has been great. Where can people go to learn more about you? Obviously, LinkedIn is one place for Ignition Consulting Group. Where else can people go to in your book?

Tim Williams 32:24

Yeah, ignitiongroup.com. And there, you can sign up for our newsletter. And you’ll find links to the book, LinkedIn, I really enjoy writing for LinkedIn. So that’s a good resource as well. And I love to network. So love to hear from anyone that feels like they’d like to be part of my network. Great,

John Corcoran 32:46

Ken. Thanks so much.

Tim Williams 32:48

Okay, thank you, John.

Outro 32:52

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