Over the past nine months, we’ve heard an outcry from leaders that their firms are struggling to retain clients. Not only are they losing their most valuable assets—their existing clients—they are caught off guard when it happens.
And I get it. I led a 2500+ employee professional services company for over 16 years. Winning and retaining clients was a challenge that only became harder as the years went by.
Why? What has happened to professional service firms? Once the bastion of service quality and customer service, they struggle to retain these once-deep relationships.
We are in the midst of a massive upheaval.
AI is transforming the world and driving massive disruption throughout the services landscape. Unlike many other industries, because professional service organizations solve specific challenges that companies can’t solve on their own, they tend to be more sensitive to major trends and innovations.
Compare the top Global System Integrators of yesterday to those of today. Whereas the former were networking and large-scale enterprise software implementation specialists, the latter are cloud and digital engineering specialists. Likewise, yesterday’s Marketing Agencies excelled at mass media and copywriting, and today’s leaders have evolved to also excel at digital ads and social media.
The AI revolution is already starting to ripple through the services landscape. It has caused an overarching sense of volatility that has clients leaving long-term partners, searching for new areas of expert demand, and seeking brand-new value equations. Clients are ripe for churn.
We have grown stale in our approach.
Massive advancements have been made in customer experience over the past decade, yet professional service organizations aren’t keeping up. Customer Success tools like Gainsight, Clarabridge, and ChurnZero translate transactional data into deep client insights, predicting churn, exposing growth opportunities, providing leverage to Client Experience executives, and allowing purpose-built customer journeys and client-focused operations.
Professional Service organizations need to innovate similarly. Handicapped by the lack of transactional data, firms have struggled to gather the depth of systematic client intelligence essential for modernization and innovation. As a result, Professional Service organizations still “feel” like your mother’s (or perhaps even your grandfather’s) professional service organization.
We haven’t figured out how to scale relationships.
Professional Service organizations scale with people. The digital, now virtual, world we now live in has allowed each of us to relate, connect, and communicate with infinitely more people through infinitely more channels than ever before. Large service provider teams now collaborate with multiple people at the client organization in ways never imagined when Arthur D. Little pioneered consulting in the late 19th century.
As a result, client communications are more decentralized, bifurcated, and informal than ever before. This has proven devastating in a world where relational capital, conversational nuance, and posture matter. No single person sits at the center of all these communications, primed and ready to “connect the dots.”
As a result, most of the intelligence—the ability to learn and apply—gets lost, making relationships more brittle than ever before.
And that’s it in a nutshell: we are lying amid renewed volatility and are sitting on a stale and brittle model that has not kept up with its time. Professional Services organizations are simply ill-prepared to deal with the increased volatility caused by AI.
It’s time to innovate. It’s time to reintroduce resilience to a model where it’s long overdue. It’s time to turn our communications into high-leverage intelligence and deep, intimate relationships with our clients so we can operate more nimbly and provide greater value to our hard-won clients.
If you’d like to get an early look at what we are building for Professional Services companies at Knownwell, join our beta waitlist here.
