What Boutique IT Service Firms Can Expect Of Their Perfect Clients
By Tom "Bald Dog" Varjan
In one of his training videos, AthleanX founder, Jeff Cavaliere makes an interesting comment about biceps training, "Efficiency is what the body craves, inefficiency is what is needed for muscle growth".
What he means is that the body is looking for easier ways of doing - in this case - biceps exercises. And while it feels good because we can use heavier weights, since we use more shoulder and less biceps, in the long-run, it's totally self-defeating and roughly as useless as trying to pick a lock with spaghetti.
Exactly the same happens when boutique IT service firms accept less than perfect clients.
So, paraphrasing Jeff's comment, efficiency, in the form of instant revenue, what the firm craves, but inefficiency, in the form of the right kind of revenue, is what the firm really needs for long-term sustainable growth.
In some points, I refer to buyers who haven't become perfect clients yet, but they will. So, to make life easier, I call them all clients.
You can figure out from the context whether it's about buyers before payment and project commencement or clients after.
Expectation #1: Perfect clients offer you high-challenge and low-pressure work.
What's the difference?
Challenge is the nature of the work. Pressure is the nature/character of the people you work with.
What is the challenge part? It's when the client's problem is rather complex and it takes some serious intellectual firepower to develop the solution. In a way, this is the best situation, because due to the problem's complexity, the client is unlikely to say, "Oh, we could have done it without you."
And yes, technically it's correct. Technically speaking, the client could have done it without you. All the knowledge the solution requires is available in books or in other formats. It's just a matter of investing the time and money to learn it. But it's doable.
Your client could also build his family a nice big family home and build a family car from spare parts. It's just a matter of time and money to acquire the relevant knowledge.
Yes, I know all the information is available on the internet for free, but when I fly to Europe, I want an experienced pilot, not an informed pilot.
So, there is a little difference between technically and realistically. And the difference is tacit knowledge. See fellow Hungarian, Michael Polanyi's research on the topic.
Briefly...
Explicit knowledge is what you can learn from books by memorising codified information.
Tacit knowledge is what you learn over the years of doing something. It comes with experience.
It's like the difference between the two drummers, Mike Mangini of Dream Theater and Mike Portnoy of Sons of Apollo.
Based on what I've heard and read, Mangini, a former faculty member at Berklee College of Music, is more technically skilled, but Portnoy, a Berklee College of Music grad, has more intuition and that makes his drumming more refined and enjoyable.
Mangini has lots of explicit knowledge.
Portnoy has lots of tacit knowledge.
Nevertheless, I suggest you listen to both bands. They are amazing. And Jeff Scott Soto's amazing voice in Sons of Apollo makes the whole experience pretty unique.
Anyhoo...
And the pressure comes from working with jerks. No matter how enjoyable the work is, even one idiot on the project tem can ruin the experience.
This is why your perfect client profile should pay attention to both the kind of projects you get and the kind of people you have to work with.
Expectation #2: Perfect buyers don't get shocked by your prices. If they find your prices are out of their budgets, they tell you honestly and together you can figure out what you can do for a certain budget.
By contrast, whn less than perfect buyers see your prices, they usually disappear on you. In the best case, they tell you that your price is too high, but in most cases, they say nothing and vanish.
Expectation #3: Perfect clients live and let you live. They don't nitpick every aspect of your life, education, experience, references, testimonials and other pieces of nonsense. They bravely engage with you in meaningful discoveries to establish whether or not the two of you have a mutually beneficial basis for working together.
All on all, they want to evaluate you during real interactions. They are sophisticated to know that if you sell yourself as an IT security expert, then you understand IT security because in the age of social media, disgruntled clients can make a serious mess of your future. So it's in your best interest to be a straight shooter and sell only those skills at which you're really an expert.
In their interactions, perfect clients focus on personality fit and avoid asking idiotic questions like, "Have you ever worked with companies like us in the downtown Portland area with exactly 74 employees, a dog and two parrots in an exactly 18,935 square feet office complex on a problem exactly identical to ours?"
Perfect clients are seeking strategic similarities ("Can you tell me about your experience at building log houses?") to your past work not tactical ones ("Can you tell me about your experience using the Dewalt DWE7491RS table saw?").
There is a helluva difference of expertise between building houses and using a table saw.
What I mean is that smart buyers ask you if you've worked on marketing strategy in the buyer's industry, not whether or not you know how to identify 10 great prospects on LinkedIn.
Smart buyers also know that if they want the 10 prospects identified on LinkedIn to fit into the firm's business strategy, that takes a lot of consideration, mental acrobatics... well, expertise.
Otherwise, even a trained monkey can scrape 10 random names from LinkedIn.
Expectation #4: Perfect clients, after the project's completion, periodically inform you about how they are doing using the solutions you've helped them to develop.
But this is a two-way street. You have to stay in touch with past clients and ask about the improvements. If they were really perfect clients when you worked together, they are likely to enjoy bragging to you with the improvements.
But there is a caveat here.
If during the engagement you treated your clients as the heroes of the stories (the projects), while treating yourself as the trusted advisor in the background, your past clients will love telling you about their successes.
But many IT service firms make the mistake of treating themselves as the heroes and their clients as the fools with problems. And that's why it's not even surprising that clients try to end relationships with their IT service firms.
Expectation #5: Perfect clients, well, unless they are the owners, leave their old firms and join new firms. And they often bump into the kind of problems that your firm has helped them to solve in the past.
So, especially if you've kept in touch with them, they will call you to help them again. Since they are at a pretty high level in the new firm's pecking order, they have a pretty decent level of influence to make sure the project doesn't go to RFP but lands on your firm's desk.
Expectation #6: Perfect clients say good things about you behind your back. They know how important brand is, and they want to help you to improve yours, so you can stay around for many years to come.
The other side of this that if they have a bone to pick with you, they sort it out with you behind closed doors.
Just as leadership books teach it: Praise publicly and reprimand in private.
Expectation #7: Perfect clients see the best in you. In the words of French writer, Anaïs Nin, "We don't see things as they are; we see things as we are."
We know that the way things change in nature when you look at them depends on the way you look at them.
Just look at a picture first with both eyes opened, then with one eye shut, then the other eye shut and then both eyes squinting. You see four different pictures.
That is, if you see the best in people, they do their best to show you more of their best.
There are three ways your clients can walk into a business relationship with your firm...
- I'm sure these guys will mess things up and we'll be back to square zero.
- Let's hire them and let's see what they do.
- We will come through no matter what and we'll make the most of this project.
Perfect clients are #3.
Expectation #8: Perfect clients appreciate the value that you bring to the table, so to stay on your good side, they pay you promptly and fully. Unfortunately, non-perfect clients may kick up a fuss either about the amount or the payment terms.
A few years ago, a buyer told me he would pay me the amount I asked for if I were a proper marketing agency with employees and a proper downtown office.
But he couldn't pay that high amount to a solo consultant operating from his spare bedroom. In his opinion, it wasn't fair for a solo consultant to earn so much.
No matter how many clients you work with at any time (it's max. three for me), there is a favourite hierarchy.
If there is a significant difference among them, the hierarchy may be conscious. If they're more or less similar, the hierarchy and discrimination are subconscious.
Oh, and don't get hung up on the word "discrimination". We all do it.
By dating a Catalonian heart surgeon, I'm discriminating against Asian coffin makers, African embalmers and Caucasian gravediggers. By wearing black, I'm discriminating against every other colour. And by using a Mac computer, I'm discriminating against PCs.
But that's part of life for everyone.
Expectation #9: Perfect clients don't coerce you by using their "big company" status. It's a common practice for big companies to hire boutique IT firms with the foresight of strong-arming them for special rights and privileges.
For instance, after the contract is signed, the big company's procurement manager, never a real buyer, tells you to sharpen your pen and see what sort of discount you can offer on the project.
And if you say, you can offer a discount in return for a smaller project scope, the procurement manager threatens to sue you for misrepresenting your capabilities and being unable to deliver the service that you've sold and the client's bought and paid for.
There are two options here. Either you select your clients very carefully or you write watertight contracts with lots of legalese.
I prefer the former because when you write a legalese-ridden contract, it will end up in the legal department, and those lawyers can throw everything at you to screw you over. It also slows down the project quite significantly.
As a boutique firm, you work with limited number of clients, so you might as well screen them well.
Expectation #10: Perfect clients know your range of services, but before needing services that you don't offer, they ask you just to make sure.
In doing so, they give you a chance to decide whether or not it's worth learning something new for future use.
When I was doing software development, I used C++ and Assembly for computer-controlled applications and their own languages with the PIK microcontroller family and my semi-productised/semi-customised motion control system (National Semiconductor LM628/LM629 three-dimensional motion controller system with various International Rectifier power bridge drivers).
To me, as a one-man show, that was a pretty full range, and I didn't want to learn another language or another system. So I turned those opportunities down and that enabled me to go deeper on my existing expertise.
Expectation #11: Perfect buyers had done their due diligence before engaging your firm. They'd learnt about your industry's the price ranges and the way the industry's top-tier firms do business.
It means they don't get a heart attack when they first hear or read your prices and the ins and outs of how you do business. They just accept it as industrial standard.
But if you submit a proposal to a buyer who's worked with cheap IT professionals from third-world countries or through Upwork, then they may be in for a shock.
Most of those low-grade, low-budget buyers have at least Mercedes expectations and Yugo budgets. They are seeking "world-class" and "rock star" professionals, but want to pay only sub-apprentice prices for their expertise.
The reason why great clients don't start relationships with IT professionals by asking about their prices is because they already know what to expect. Not to the penny, but have a ballpark.
And they don't get shocked and hysterical when a firm is 15-25% more expensive than the industry average.
Expectation #12: Perfect clients ask for your expert opinion before they implement a full IT infrastructure change.
They know that a complete IT backbone overhaul is a pretty costly proposition, and it would be fiscally irresponsible to make major changes without asking the experts, their current IT consultants.
And let's stop here for a moment. I'm not saying, they ask the opinion of an MSP firm.
MSPs make a big chunk of their money by re-selling products to their clients, so their recommendations are biased.
Using construction lingo, the architect is the consultant and the builder is the MSP.
Just like architects, IT consultants sell their thinking.
And just like builders, MSPs sell mainly their labour and re-sell equipment.
When I work with aspiring MSPs that want to step up to consulting, the first thing I recommend to them is to stop re-selling equipment.
They compile their shopping lists and favourite suppliers, give them to their clients and clients go shopping. This gesture makes clients realise that the product prices won't be marked up.
Granted, those aspiring MSPs make no money on products but more than make up on their service prices.
From the buyer's perspective, selling products is often perceived as nickel-and-diming.
When I was a tech buyer in the 90s, I preferred to see one number on the invoice: "Solving ABC problem: $XYZ."
As a buyer, I needed a solution, not an itemised list of bits and bobs.
Expectation #13: Perfect clients don't reprimand their people in front of you. Yes, you work together, but you don't belong to the client's "family" the same way as their people. So, if there are problems with their people, they sort things out behind closed doors in your absence.
And only if it's warranted, they tell you about the outcome of the dispute, but not the details.
Also, if they have problems with your people, they resolve conflicts with you as quickly and quietly as possible. They don't bypass you and start quarrelling with your people.
They tell you what their problems are and then you can talk both to your people and your client both separately and together.
Expectation #14: Perfect clients offer honest and candid feedback.
And let's make a distinction between feedback and criticism.
Feedback is directed towards projects, behaviours and activities. "Joe's idiotic idea" is feedback.
Criticism is directed towards people's character. "Idiot Joe's idea" or "Joe is an idiot." is criticism.
Also, great clients know that there is a direct contact between the client company's project lead and the IT firm's project lead and there is only one 1-to-1 communication only between them.
If you have an IT team of four people and a client team of four, then there are 28 possible communication channels ( (8 * 7) /2 => 28). That would make everyone mad rather sooner than later.
Expectation #15: Perfect clients look out for your profits. They know how hard it is to find reliable (a lumpless blend of top-notch expertise and good character) IT firms and want to make sure you stay in business for many years to come in case they need your help in the future.
Well, they almost always do.
Perfect clients are smart enough to know that if they nickel-and-dime their IT providers, in return, those IT providers either dump them for bad behaviour or they return the favour and nickel-and-dime those clients.
Where is the problem?
When clients nickel-and-dime their IT providers, it's pretty overt.
But when IT providers nickel-and-dime their clients, it can be pretty covert.
For instance, IT providers can fiddle with project scope and project parameters so that clients don't even notice it... until it's too late.
Just as in any profession, in IT as well, quality components can be easily replaced with cheap Chinese components that die in a few months.
But still, the best bet is to dump problematic clients.
Expectation #16: Perfect clients tell you about IT-related innovations they've come across. The IT industry is evolving faster than the speed of a Highland clan running from the hills at the sound of the battle bugles, so there is no way you can keep up with everything.
But your clients want you to stay up to date, and since they know it's a virtually impossible task, they give you a hand by sending you relevant bits and pieces of information.
I know many people make an ego issue out of this saying that by the time their clients find out about something new in the IT industry, it's no longer new.
Maybe. But what does it take to contact those clients and express your gratitude for their thoughtfulness?
It can only improve your relationship with them.
Well...
These attributes of perfect clients are all great things, but we have to recognise one important point: Perfect clients do behave this way because they want their IT providers to be super successful.
They do it for selfish reasons.
- They know that by becoming your absolute best client, you can't justify losing them even if you can afford to lose them. They pay you well and it's a bliss to work with them.
- They know whenever they have problems, you treat their issues as top priority because they treat your requests as top priority.
- They know you send your best people to deal with their problems.
And this reveals something vital about perfect clients: They are long-term focused. They understand the difference between instant and delayed gratification.
They also understand that instant gratification is almosty always insignificant in magnitude and doesn't last long, but delayed gratification is usually significant in magnitude and lasts for a long time.
And here is one more point to consider: Profitability.
And this is Pareto on steroids.
20% of your clients give you 150% of your net income.
80% of your clients erode 50% of your net income.
So, at the end of the year, you have 100% left.
80% of your cost goes to serving the very 80% of clients that is eating your profit away.
What's the logic in keeping them?
The sooner you dump them, the better it is for you. Well, dump them.
It's all well and good, but to apply it all, you need to know how your target market perceives your firm.
Is it a fungible IT vendor or a respected IT authority?
It's the market that hangs your brand around your neck based on the outside perception of your firm.
But you can also influence the outside perception by tweaking your firm's inside reality, that is, your culture, by consciously transforming your firm from vendor to authority.
In this peddler quiz, you can check whether your firm is more of a fungible IT vendor or a respected IT authority.
In the meantime, don't sell harder. Market smarter and your business will be better off for it.