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In case you didn't know, I grew up in
the staffing industry. My parents started their first staffing firm in
1968. Over the years, I've had the opportunity to witness firsthand the
evolution of the industry. And over the last eight years as President
of Haley Marketing Group, I've been privileged to work with literally
hundreds of terrific owners, managers, sales professionals and recruiters.
What pains me most about this business is that I see almost
every single staffing firm (including Mom & Dad's) making the exact
same mistake.
The Biggest Mistake
Okay, before I get to the mistake, please let me clarify. I'm not
an operations guy…I'm a sales and marketing guy, so my perceptions
on the industry may be somewhat biased. Also, this mistake is one that
there is no easy remedy for (which of course, is why so many firms are
making it.) That said, without further delay, the biggest mistake staffing
companies make is:
Most staffing companies
try
to differentiate
on service.
What's the problem?
You may be saying, "David, we're in a service business, we have
to differentiate on service." Or, "Well, I know everyone says
their service is better, but ours really is." (By the way, if I had
a dollar for every staffing professional who told me that last line, I
could take my family on a very nice vacation!)
The problem with differentiating on service is that it CANNOT
be done. And even worse, better service is nearly impossible to sell.
Think I'm nuts? Try picturing your top 10 competitors selling their services
to you. What would they say? How often would you hear some variation of
the message "our service is better?" Would you believe them?
Would you pick any one of these firms because "their service is better?"
Neither would most HR professionals or hiring managers.
The problem with differentiating on service is that it is nearly impossible
to prove that your service is better than the competition until AFTER
a prospect has used your services. Sure, you can roll out testimonials
and reference letters, but everyone has those.
Because the market for staffing is so competitive, the more
you say "our service is better," the more you sound just like
everyone else…and the more people are going to ask "what's your
price?"
So how do you fix this mistake?
As I mentioned, there is no easy fix to this problem. To survive in
the staffing business, you have to offer great service. But, even if your
service is the absolute best in the area, it's still hard to differentiate
on this point. So what can you do?
- Focus on a niche market you can own
While it's impossible to be the best at service to all prospects, you
can own service with a more limited market. For example, many firms
have found success (and higher margins) by focusing on specific types
of positions and/or specific industries. Look what MacTemps (now Aquent)
did in the graphic design world. I know several firms that are doing
very well focusing on the clinical trials business for pharmaceuticals.
And over the past few years, the professional staffing niche has been
among the fastest growing. By focusing on a smaller target audience,
and specifically tailoring your service to that audience's needs, you
can actually differentiate on service. That said, even these niche markets
are becoming saturated with competition, and when that happens, you
lose your ability to make service a differentiator.
- Differentiate on a tangible aspect of your service
Service is a complex subject. Rather than trying to be the best at service,
focus on one component of service and be the best at that. For example,
look at what Domino's did in the pizza business. They could have chosen
to emphasize tastier pizza or better service, but they built a huge
company around one thing: delivery. By focusing on this one element
of service (one that their customers cared deeply about) they built
a highly successful business. So what one aspect of service can you
own? For a few ideas, here's a link to a past issue of The Idea Club
offering 17
Ways to Differentiate Your Services.
- Find a way to "prove the value" of your
better service
To sell better service, you need to do two things: 1) demonstrate (tangibly)
the value of better service, and 2) be able to show how you consistently
deliver this value. For part 1, brainstorm with your team the benefits
of the service you provide. How does your higher level of service help
your clients improve revenues, control expenses and eliminate headaches?
Try to define your value as specifically and measurably as you can.
For part 2, you need to find a way to make your higher level of service
structural. By this, I mean you need to design a step-by-step service
process that guarantees consistent delivery. For example, if you say
"we're more responsive" then you should be able to show prospects
how you've setup your service delivery model to minimize response time.
The idea is to make your service process tangible so you can show someone
how you're different. Then you can support your claim with testimonials
that prove your process delivers the value you promise.
- Out-hustle the competition
This may be the technique most often used by staffing firms. "If
I can't prove I'm better, I'll just work harder." And yes, this
technique does work. Unfortunately, it also burns out sales reps and
is very difficult to sustain over the long-term. That said, there are
some companies in the industry that live by incredible weekly call volumes
and just assume that frequent turnover is inevitable. What's most interesting
about this strategy is that service quality is most often measured by
consistency of service, so the more turnover you have, the lower your
service quality is likely to be perceived!
- Out-market the competition
If you're in a business where you can't limit yourself to one niche,
you need to outperform the competition in all aspects of service. Since
you can't just crack the whip over the heads of your sales team every
day, consider out-marketing the competition as an alternative.
Here's what you need to do to out-market the competition:
- Have a plan. Identify who you want to target, what message
you want to deliver, and how you plan to get this message to those people.
- Be bold. Your marketing message needs to capture the
attention and interest of your target audience.
- Be persistent. Repetition is the key to making your marketing
effective.
- Be consistent. Make sure all your communications compliment
the message you want to deliver.
- Integrate your marketing with your sales efforts. In
a competitive business like staffing, marketing alone will rarely produce
the results you want. However, an integrated campaign of direct marketing
with sales follow-up can produce spectacular results. (We've seen this
time and time again with our clients.)
- Be even more persistent. To close new business, you have
to capture attention, differentiate your services, build trust in your
ability to deliver, and be in the right place when a need arises. This
takes time. If you asked me "what's the second biggest mistake
staffing companies make?" I'd say impatience. They want immediate
results in an environment where you have to first nurture relationships
to close sales. Good marketing is a great differentiator…if you
stick with it!
About the Author
David Searns, is President of Haley Marketing Group, a relationship marketing services firm specializing in the staffing industry. Haley Marketing provides relationship marketing campaigns, e-newsletters, postcard campaigns, website design, marketing strategy & creative services to staffing and search firms throughout the US and Canada.
Prior to forming Haley Marketing, David was Director of Marketing for a Western New York temporary staffing and direct placement service. He holds an MBA from the Wharton School of the University of Pennsylvania and a Bachelor's in Management Information Systems from Clarkson University.
For more information about Haley Marketing, please visit www.haleymarketing.com.
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