Transcript

Jason Mlicki: So clients are stupid. That is the worst podcast topic I have ever heard in my entire life, but that’s what we’re going to talk about today. Seriously, is that what we’re going to talk about today, Jeff?

Jeff McKay: Well, of course that’s what we’re going to talk about today. That’s why we titled it.

Jason Mlicki: Clients are stupid. Okay. So you just want to offend the entire universe and basically make sure we never have a client again.

Jeff McKay: I’m sorry, I wasn’t referring to my clients.

Jason Mlicki: Oh, okay, good.

Jeff McKay: All my clients are brilliant, no doubt. You know, as we talked about this topic, we thought, well you know, what’s the punctuation on the end of that title? Is it an exclamation point, saying that clients are stupid, or is it a question mark? Clients are stupid? And I think that’s a good way to kind of set this up. I thought this would be a great topic, because in my life in professional services, whether that’s as a marketer or now more of a consulting role, I often hear many, not all, but many consultants and accountants and what have you make a comment that clients are stupid. And it’s normally in response to why aren’t clients buying this solution? Well, they’re stupid. It’s so obvious that they should buy this solution.

Jason Mlicki: So painfully obvious.

Jeff McKay: So painfully obvious, because there’s a clear ROI and we are the best at doing it. I understand why they’re saying it. It’s a frustration expression, and I get that, but it’s a very dangerous expression, even if it’s said just internally, because it reinforces that bias in your mind, but it also can create a poison that can permeate a culture, particularly if a partner says that and a more junior person hears it. That’s not setting a tone for a client-centric firm. So it needs to be addressed, and it’s why we’re addressing it now.

Jason Mlicki: Yeah, you know, it’s interesting, there’s a consultant to the agency industry that’s since passed away, by the name of Tony Mikes, and I remember hearing him say one time, this was probably 15 years ago, he said, “As the principal of the agency, as the leader of the agency, never criticize the clients in front of your people.” That was sacrosanct to him. He’s like, “I don’t care how much you question their decision-making or how much you think, boy, they’re just not seeing it,” he’s like, “you cannot afford to criticize them in front of your people, because the moment you do that then your people lose all trust in the relationship and everything, and then the whole thing erodes.” And that was something that was really critical to him and his work. And I just thought it was an interesting comment to share.

Jeff McKay: It’s an important one, and a lot of times it may not be said expressly. It can be implied, and I think both are poisonous. And it’s not just the managing partner that should be saying, “We don’t do that here.” It should be the practice leaders, the partners, the marketing leader, the sales leaders. Anyone that hears that should put the kibosh on it. And as far as I’m concerned, even if you’re an underling, you have the authority to step in. That’s the idealist in me coming out.

Jason Mlicki: Yeah, no. Now, let’s lean into the reasons why that’s happening, because I think you said the heart of the issue tends to be a couple of things. One is that maybe the recommendation that’s been made by the consultant or the firm, they see a clear ROI, but the client on the other side does not, or does not act on that. And so what are some of the reasons why they don’t? Let’s lean into that, because I think that was one of the main reasons you said that this mentality comes out inside of firms.

Jeff McKay: I think the first one is, your buyer’s going to have competing priorities. They’re not going to share all the priorities with you. But as a business and as a business leader, they have to make strategic choices about how to allocate limited capital for the highest ROI. And you know, I’ve seen this almost everyplace. I learned this at Andersen young in my career when we were doing, I think it was R&D tax credits or something like that. And there was just a clear low-hanging fruit, easy ROI, invest $200,000, save $2 million, 10X. Who wouldn’t do that?

But it wasn’t selling at our clients. And the reason it wasn’t selling is the CFOs were not impressed with $2 million in savings. They were looking for $25 million, $50 million, $100 million in savings, and they didn’t want to allocate resources. Even though it was 10X, they didn’t want to allocate resources, because they could get higher ROI later or elsewhere. So they just had different priorities.

Jason Mlicki: Yeah, that’s a big one. I think the other piece to that, and this actually goes back to the discussion we had about competing points of view on selling, and it was RAIN Group who actually wrote this in their research on buying and selling. And one of the things that they said was, the consultant comes out of those meetings saying, “I can’t believe they didn’t buy that. I can’t believe they didn’t do that. They just didn’t understand.” They actually had that quote in their writing.

And they said no, they totally understood exactly what you said. They just didn’t believe it. So they didn’t actually believe that you would deliver the value you thought you would deliver or the savings you thought you would deliver. And so I think there’s a gap there too. Yes, you have opportunity costs like you described, like the client saying, “It’s not worth it to me to go do whatever it is you’re telling me to do.” Or two, it’s the opposite of that, which is that they just don’t believe that the promises that are being made will actually be realized, and they choose inaction in that regard. I thought that was a really, probably some of the best thinking in that RAIN study, to be honest. You threw another one out there, which was differing world views. Talk about that for a second. I thought that was interesting.

Jeff McKay: Well, I talk a lot about ideal client, and the ideal client to me is the client that values the value you provide and they share your world view. Every buyer and organization has a different perspective on the role of IT or the role of accounting or the role of marketing. Some see it as strategic, some see it as tactical. There’s just different points of view on those various functions.

And if you find yourself just not understanding why that prospect or client is not buying or doing what you think, it may not be that they’re stupid. It may just be they don’t see the world the way you do, very similar to Democrats and Republicans. I mean, they’re just totally different worldviews about moral and economic and political issues. So that’s why it’s so important to identify your ideal client and just pursue those that share your worldview. Otherwise, you’re wasting time.

Jason Mlicki: Well, an interesting thing about that, this goes back to maybe my comment a second ago, and we’ve talked about this, data blindness. Even if you’ve presented them with a case that on the surface is backed with clear ROI, clear data that says it’s going to work and it’s a valuable investment for the client, if it doesn’t align with their worldview, they’re going to be blind to that data and then be blind to the input you gave them. So you’re barking up the wrong tree no matter what. If they’re just, “I just don’t believe it’s going to work. No matter how much data you put in front of me, it’s not going to change my view,” you want to deal with that earlier.

Okay, so we’ve talked a little bit about what’s really going on. When a firm leader or people in the firm are saying, “Boy, the clients just don’t get it,” I softened that a little bit, what might really be going on? Let’s talk about, I guess, maybe some of the causes of that. I guess I’m going to transition us a little bit, but one of the things that I thought about coming into this topic was just that on the whole, I think that a lot of times subject matter experts, consultants, they think they know their clients really, really well. And I think for at least a couple of reasons, they don’t know them really at all.

So the first reason I’ll give is that they can’t fully extrapolate what they know about their client relationships to a broader market effectively, because they don’t have enough data points to make the assumptions that they often do. So the assumption is, I’ve got these five or six clients that I work with in this way on these issues, and these are their top of mind issues. Hence, those must be the issues of the broader market.

But to your point about worldviews, if you’re only working with clients that share your worldview and you’re only working with a handful of clients and a handful of functional areas in organizations, you’re only seeing a small slice of people that agree with how you see the world in a small slice of companies in a greater market, in a small slice of functions inside greater companies.

So the reality is, there’s a very good likelihood that what you know about your clients and what you think is so sacrosanct and your intimacy is so great that you’re completely blind to broader marketplace dynamics, because you’re assuming that those five, 10, 12 data points, however many you’ve collected, are accurate for the rest of the broader market. And so I think it’s a huge blind spot in firms when they make those assumptions that the experiences we’re having inside this account, this client are true of every account, every client of this type. And I think it happens a lot.

Jeff McKay: It does happen a lot. We talked about this, I think, when we were talking about productization of a service, where you have one successful client engagement, therefore you think everybody wants the same solution, and you don’t do the due diligence on it. And you and I have written on that as well. Maybe we can put some links in the show notes for that as well. But oh yeah, I’ve been there, done that. So all the world sees it that way, and it’s just not true.

Jason Mlicki: And in defense of everybody listening, that’s just human nature. I mean, that’s how our brains are hardwired to work. You and I do it all the time too, right? We shape our memory. Our memories are built through stories and not through data, and so the stories that we collect define how we see things, and we look for validation of those proof points. So every time we look around us, we look for another validation of those one or two stories inside of our head.

Well, you know, when I saw that over at XYZ client, that’s what it was. That’s the same thing. And we make these very quick mental leaps. That’s just how our brain works. So it’s not like we’re picking on specific consultants for their inability to do this. I think it’s just human nature, and we have to be mindful of that and say, “Well, wait a minute, how do we test those assumptions? How do we look broader than our own direct experiences and our own direct stories that we’re telling ourselves about those experiences all the time?” Right?

Jeff McKay: Mm-hmm (affirmative). I like the way you said that, how do we test our assumptions? Because it has to be intentional. You have to say, “All right, I know I have this bias, because I’m working with a small sample or subset of the larger population. What do I need to be doing to offset that? What do I need to be looking at what’s going on in my competitors? What do I need to be looking at of what’s going on in the industry? Where else can I go to challenge my own thinking to make it stronger?” And I think most people probably say, “Oh yeah, I read industry trade pubs and all that. I’m kind of attuned to what’s going on.” But I think it really has to be intentional to go beyond that, which is why, and I think you can really speak to this, why research is so important for a firm to do, primary research that goes beyond just the current client base.

Jason Mlicki: Going beyond the current client base, I think, is the interesting point. We’re in planning season. It’s fourth quarter budgeting season, so I know we’re having a lot of conversations with our clients, and some of our clients are predisposed to do lots of original primary research for thought leadership and others are not. An interesting thing I have been thinking about as it relates to that is, for the firms that aren’t, we’ve been trying to encourage them, say, “Well let’s take a look at that. Maybe we should do some research on that topic and see what we can find out. Let’s test our assumptions and see if what we really believe about the market based on our client experiences is really true.” And there’s always a hesitance because of the cost of large statistical research studies.

But the other thing I’ve been thinking about is yes, you can do research less expensively and simpler. You can do a quick short survey polling your client base. But the inherent problem with that, like we just discussed, is what if your entire client base falls into this very small subset of the market that sees the world the same way you do? Now all you’ve done is confirmed the things you already thought. It didn’t help you, right?

So I think it’s important, to your point, if you’re going to invest in research, you just need to be clear on what you want that research to do. There’s nothing wrong with polling your client base. There’s absolutely nothing wrong with polling your known audience. That’s a totally valid thing to do, but you might say to yourself, “Wait a minute, we need to look beyond that, because maybe there’s a different sector of the market out there that sees things differently that we’re just not in tune with, and we need to understand really what they’re thinking about this topic or how they’re dealing with this topic.”

I’ve also been thinking lately about a lot of firms, this is an interesting comment, but a lot of firms, I think a lot of firms get hired to take poor performers and make them average or good at what they do. I think that happens a lot in consulting. And when I say poor performers, I mean the companies that are in one area or another feel like they’re below grade where they need to be. The consultants are hired to come in and make it get to parity or better.

But the exceptional performers sometimes aren’t working with consultants at all, because they’re already exceptional. They might be, but they might not be. So what if your whole client base exists of companies you’re taking from poor to average or average to good, and you’re missing out on the exceptional? That’s where research comes in. I don’t know, the more I’ve been at this. And I also continue to be surprised at how much we just are surprised by when we do research, both for ourselves and our clients. There’s always something in the research that pops out, and you say, “I never thought we would have found that. I never saw that coming.” And that’s the stuff I guess I’m always looking for when we’re doing it, if that makes sense.

Jeff McKay: You know, every once in a while you come up with something really good. That was a good one.

Jason Mlicki: You stumble around long enough, something comes out good, right?

Jeff McKay: I like that. And it gets to what we were talking about. You need to be aware of the biases operating in your mind and challenging assumptions. Hey, what if we only work with poor companies and we’re just getting them to good? What if? A±re we doing that? How could we test that? Yeah. Yeah. I think that’s great.

Jason Mlicki: I also had a note in here, I think it just kind of relates to something you said, is just use research to reduce confirmation bias. That’s really what you’re trying to do, is you’re trying to say, “Well wait a minute. I’ve got to get out of all the things I truly believe in and test those,” and I think that’s a big piece of it.

Jeff McKay: Yeah, because like the due diligence of a new product launch, your goal is to prove why it won’t work, and if you take that view of your approach to the market, it can have some really positive benefits, because your competitors are probably doing that. Well, here’s why Rattleback’s point of view on the market is backwards and why they’re not producing X result, or here’s why Prudent Pedal is going to get you here, but you really want to go there. You need to beat that up and be honest about it, because it will make you stronger. And we’ve talked about the bias. Actually, we’re going to do something on behavioral economics, which we alluded to in some of our others about our favorite thinkers and giants whose shoulders we stand on.

Jason Mlicki: I’d say the challenge in doing that episode, and the reason it hasn’t happened, is because we haven’t figured how to bind the topic yet. It’s too big and broad, kind of like a lot of research studies. We got to figure out how to bind the topic. I think the other piece of research that gets lost in a lot of this, especially in the firms that aren’t doing it, that just haven’t been able to see value in it, is that they go into the research looking to confirm the things they already believe, versus looking to understand how the best are doing something or doing something differently. I was on a call with Serge Perignon, who heads the Thought Leadership Institute for TCS, he’s speaking at our event this fall. And I was talking to him about, he’s going to talk about research.

I though it was great, because he basically said, “A lot of what we’re trying to do is, we’re just looking for new ways to think about a problem and new solutions to that problem that we hadn’t previously seen, in the hopes that we can extract new service offerings.” He’s said, “So a piece of this is thought leadership. It’s giving us something to talk about, but a bigger piece is looking for new things for us to be doing as a firm for our clients.” And I just think that’s the healthy way to look at it. We always talk in our research on thought leadership research that if you’re doing research right, you sort of go in, not to test a hypothesis, but to really understand how companies are solving the problem that you’re trying to unravel, for what its worth.

Jeff McKay: Or not solving the problem.

Jason Mlicki: Yeah. Yeah. Where are the blocks?

So I’m going to transition to a final set of topics before we leave here. When we talked about this notion of clients are stupid and what that meant and kind of played on that, and then we talked about reasons why this happens, I said that I thought there were two. And the one I shared was I thought that we all have a too-limited view of the market without research. I think the second one is that most firms ask for feedback incorrectly. They don’t have effective feedback mechanisms.

And this one is interesting, only because this is not my domain. This is something I learned when I was speaking at an event four or five years ago. You think about the typical way that we’re taught in school to collect customer feedback. What’s the typical way that companies collect customer feedback? What does that look like? How do they do it?

Jeff McKay: That a question to me?

Jason Mlicki: It’s a question to you. I want to hear how you would normally approach this topic.

Jeff McKay: Well, I don’t know if I can get an easy answer to that. I think most companies ask a simple, “How are we doing?”

Jason Mlicki: And when do they do that and how do they do that?

Jeff McKay: I think they normally do that at the end of some interaction, whether that’s a project or some contractual agreement comes to an end. How was your experience? What did you like? What didn’t you like? How would you rate us? Very simple and straightforward stuff. If they could even get it, because they probably say, “Well, clients don’t want to tell us that,” or they don’t even go through that formal process, the consultant just asks the client, “How’d we do?” Of course the clients going to say, “Oh, you guys did great,” because he’s not going to want to tell the person who did a poor job that he did a poor job.

Jason Mlicki: Yeah. I was obviously sort of leading you a little bit in that line of questioning, but that’s how I have thought about research my whole life, or customer feedback my whole life, was you collect it at the end of the engagement, you collect it blindly to try to ensure that you get honest answers, and you collect it in addition to being blindly sort of impersonally. It’s usually done best if it’s done by someone other than the person that owned the relationship. That’s how I always thought about it.

Five or six years ago I’m speaking at an event, and one of the other speakers is a guy named Mike Phillips, who heads up a company called Phillips Architecture. And on the side he had built another company, a software company now called Client Savvy. And I’ll never forget this quote, and this is what kind of drew me into the guy right away. He said, “Look, the way that companies normally collect customer feedback is all wrong,” and of course I’m thinking through it through the lens of how I’ve always been classically taught, and he said, “The way we do it,” the way you and I just described, “that’s like asking your spouse at the divorce how to be a better spouse in your next marriage.”

He said, “Who is going to do that? That’s the stupidest thing I ever heard.” Then he proceeds to show the system that he’s built and how he does it. And what they do with their tool is they ask for very direct feedback during the project at key transition points. So key pivotal moments during the course of a project, they go directly to their clients and ask for feedback in a very personal way.

Now, it’s done with technology, but it’s direct feedback, both about the work, about the people, about everything. I mean, it’s completely no holds barred. And his point is that that’s when clients are going to give you the best feedback, is when it’s going to affect them. So you’re asking them for feedback on your people, on your processes, on your work during the project, when their answers are going to influence the outcomes they have on their work with you.

And he’s kind of built a whole movement around this in the architecture engineering space. And I would say in the AE world, it’s one of the more innovative things I’ve seen, and it sort of challenged every assumption I ever had about how you should collect client feedback. I realized that he’s spot on, that he’s absolutely right. And he has, of course, tons of data to show just the impact on his firm in terms of profitability and client satisfaction and employee satisfaction. All of those things are all kind of loosely rooted together, and the company’s really grown as well.

And so I think that that’s a movement that, if it’s not already taking hold beyond the AE industry, it should and it probably will, just because the way he’s doing it is so in tune with how professional service firms operate. So that was my other thought on that, and I think you mentioned when I brought this up, we probably ought to have Mike on here, and we should. I’ll try to reach out to him, and we’ll see if we can get him to come on to tell that story, because it’s a really, really great story. When he talks about it, he can do it much better than I can. So that was my thought on that.

Jeff McKay: I love it. I like asking your soon-to-be-ex spouse how to be better.

Jason Mlicki: Isn’t that the funniest thing you ever heard? When he said that, I laughed so hard. I said, “Man, he’s spot on.” I never thought about it that way, but he’s so spot on, it’s almost comical. You suddenly realize, everything I ever thought, every assumption I ever had about feedback, is completely wrong. Just based on that one comment, because it was just like, yeah, he’s right. It’s so painfully obvious. Why didn’t I see that before?

Jeff McKay: The power of the metaphor. The power of the metaphor. There’s no doubt about that. Oh, that’s a good one. Gosh, how do I respond to that? We probably need to wrap this up. I wanted to just interject two other quick points, because I think they are relevant, and they’re probably even more common. I see people that fall into this trap. One, and you need to be careful of this, is your prospect or client is a polite business person, and if they seem irrational and they don’t want to do what you think, chances are your competitors are doing something better.

And you kind of alluded to this about the solution, but there’s also a chemistry component to that too. And they don’t like you or don’t want to work with you, but they don’t want to tell you that. And it may come off as irrational and you may think they’re stupid, when the fact of the matter is they don’t like you and don’t want to tell you that. Okay, just accept that.

Jason Mlicki: That explains basically my whole life, Jeff.

Jeff McKay: Right. You know, it’s like dating a nice girl. She’s not going to say, “I’m sorry, this is never happening, because you’re too short, too ugly, you’re not funny,” whatever.

But the other one is, and I think this is really important, is so many decisions that get made around the solutions that our clients sell are complex sales, and complex buying decisions are always suboptimal in the end to a large degree, because you’re just trying to appease so many internal constituencies and agendas. And you just need to understand that. So be better at managing the complex sale, and maybe you won’t feel clients are stupid as much.

Jason Mlicki: Maybe that’s a good place to wrap. When we’re telling ourselves… I don’t want to say this in the first person, but when firms are telling themselves that their client is stupid, there’s other things going on. It could be chemistry issues, it could be complexity, it could be, you mentioned it earlier, it could be opportunity costs, it could be they don’t believe the potential outcome. So there’s a whole bunch of things going on in the client’s mind that make them behave irrationally, I think is what you’re saying. And that’s really what firms need to realize and then try to, what, lean into that complexity and try to figure out what it is to get to the other side and a better place?

Jeff McKay: Oh, I think it’s a golden opportunity, particularly for a marketing or a practice leader to say, “Whoa, let’s take a step back and examine that.” So yeah, if you get something like this, don’t see it as a negative, see it as an opportunity.

Jason Mlicki: Better words than that to end on, I can’t think of. All right, man. I’ll talk to you next week. I think we’ve got a guest coming on next week, right?

Jeff McKay: Yes, we do, and a good one.

Jason Mlicki: All right.

Jeff McKay: All right. See you, buddy.

Jason Mlicki: See you.