This blog post from Tsen Wharton, Founder of OpusPro, is perfectly timed with our Directors event coming up on the 5th May where we’ll be exploring the subject of Growing Your Business.
“If I have seen further it is by standing on the shoulders of giants” – Sir Isaac Newton
I love this quote because it reminds us that we can learn so much from all of the business successes and mistakes that have gone before us. There are so many books, articles and living success stories out there, with all the answers to our most burning business questions, but unless we are explicitly looking for them then we can easily miss them.
The end of Q1 is nearly upon, so how is it looking for your recruitment business? What answers does your firm need that could be found by seeing things from the metaphorical giant’s shoulders?
I was at a talk last week on business growth and the speaker referred to the “only” four ways to grow a business. If you’ve read Michael Gerber’s ‘The E Myth’ he refers to similar principles. So what are these ‘4 Ways” and how can a Recruitment Firm put these to use?
Are there really only 4 ways to grow a business?
For many businesses, recruitment or otherwise, most owners focus on just one way to grow their businesses – i.e. winning more customers or clients. However with this kind of thinking they would be missing out on 3 other key avenues and therefore 75% of the opportunities to grow.
It probably sounds simplistic to say that there are only 4 ways of growing a business. But if you think about it, any strategy you can come up with to grow your business will no doubt call fall into one or more of the these categories:
- Win more clients of the type you want.
- Increase the number of times your client comes back to buy.
- Increase the average value of each sale.
- Improve the processes within your business.
As I go through each one briefly I invite you to read with the mindset “how could this specifically apply to my recruitment business?” HINT for action takers: make notes as you read and set yourself a timetable for implementing the ideas you have.
Win more clients of the type you want.
Winning new clients is important, but what you really want to do is attract more clients of the type that you already like, rather than ones that make life that little bit more difficult for you! Hindsight is 20:20 isn’t it, and without doubt there will assignments you wish you had never taken and clients you wish you had politely said no to.
Just like best practices in marketing, define your ideal client profile and focus on finding more like that. For example for all the vertical and industry specialists out there, your starting point is more clearly defined. Whatever industry or level you serve, you can profile your ideal client organisation by some simple criteria like stage in company lifecycle, size, location for example.
You will then want to segment further, perhaps in terms of particular nuances, values and beliefs. What about the culture of the organisation, or the characteristics of the leadership team? Those who value your rigorous processes and rank accountability as key are likely to be much more pleasurable (and profitable) to work with. You will know the type of client who values your industry knowledge and service offering. Use those clients as a reference point to build out your ideal avatar.
As a wrap up to this first point it’s worth highlighting the fact that people (aka your clients) buy the differences that they perceive between one firm and the next. Unique differentiators help your potential clients understand why your business is different from that of your competitors and, therefore, why they would want to do business with you.
What is your unique differentiator and how will it benefit your clients? Once you are clear on this, and you have identified the client type you want, you will have much greater confidence asking for client referrals and exploring other strategies to win more clients of the type you want.
Increase the number of times your client comes back to buy.
I am sure you have all heard about studies that suggest it costs up to 6 times more to win a new customer than it does to have an existing customer buy again. So how can you consistently offer outstanding service and encourage repeat business with your existing clients?
I see and hear of more and more firms offering more flexible fee agreements, for example providing longer periods of guarantee, performance related fees or moving to a billing model where the client pays for the time that the search firm puts into the assignment.
Many recruitment and search professionals miss out on repeat business by neglecting client relationships after completing assignments. In the busy working day of a recruiting professional it’s all too easy to focus all communication efforts into the few clients where there is currently live or potential work. During conversations with search firm owners, I’ve heard many say that their clients can easily feel unloved in quiet periods and that recruiters only make contact when they want something from the client.
What can you do to nurture client relationships? Think about how you can delight clients at different points throughout the year and add value to their business and or personal lives. (For more on this point see my post on Leading with Value).
Most recruitment professionals genuinely do want to live up to that status of ‘trusted advisor’ and ‘partner’ to their clients. An increasingly used phrase is being ‘client-centric’, and I have captured some background to this in an infographic. So what can you work on to be truly client-centric?
Increase the average value of each sale.
In order to win a client’s business in the first instance your firm has no doubt invested significant time and resources to do so. Why not leverage that investment and increase the average value of client spend?
If you don’t already base your fee on the full compensation package, can you justify starting to do that based on the premium service you are offering and the passive candidates you are presenting?
Can you transition into helping your clients solve more senior talent challenges, and therefore access higher remuneration packages?
Can you offer solutions for project work to add multiple people to a department at one time?
What about other service offerings like Leadership Team Audits, or Executive Coaching?
(These services don’t have to be supplied directly by your firm if you don’t have the expertise in-house, but you could identify a joint venture partner to collaborate with).
Improve the processes within your business.
It is fair to say that it is the processes within your firm that will underpin and tie everything together. Your rigorous search process is essentially the service that your client is buying. A successfully hired candidate who stays with the new company delivering value for a few years is of course the desired outcome. However it all boils down to the processes in your firm that lead to that ultimate result. Do you have a defined process for your search, and indeed for the other operations in your business? Without improving the processes, it is unlikely that a business will be able to leverage any of the first three ways already discussed.
Increasing the effectiveness of the way you deliver your search and recruitment services is central to everything. The quality of the processes defines and determines the quality of the outcomes (in this case the quality of the candidate found, the experience and satisfaction of the client and candidate, and the magnitude of fees paid).
Training is a key area for improving the processes within your recruitment business. Having best practices and systems in place will clearly spell out how to execute your optimal search process and make it easy to train team members and delegate work where needed. This of course creates more time for the recruitment business owner to work on developing her/his firm further.
Conclusion
So, there you have the ‘only’ 4 ways to grow your recruitment business.
What 1 thing will you choose to get started on today?
About the Author: Tsen Wharton is a former Executive Recruiter turned software entrepreneur who is passionate about helping recruiters serve their clients in a way that brings superior results for everyone. He is Founder of OpusPro – a software tool built by and for recruiters to optimise search assignment management and enhance collaboration with clients. Tsen writes about insights, ideas and best practices, both directly from and out-with the recruitment industry, that can help recruiters get more of the results they want.
