Part 2: Articulating your value proposition: Blending ideas from Professional Services & Membership Bodies

In our last post, we discussed several similarities between professional services firms and membership bodies. Both are focused on attracting and retaining loyal customers to succeed. Now, we want to go deeper. Let's explore the power of a compelling value proposition and how executives can enhance their businesses by applying ideas from different spheres.

The Challenge: Balancing Customer Needs and our OWN Sales Ambitions

Value propositions are the lifelines of both professional services organizations and membership bodies. They are the crucial bridge that connects these entities to their prospective clients or members, conveying how exactly their offerings align with the needs and wants of these individuals or groups. Without a compelling value proposition, these organizations risk losing their relevance and competitiveness in the market.

A value proposition is a promise, a pledge to deliver distinct advantages. It's the reason why customers should choose your services or why someone should join your association. However, we often frame our value proposition based on our own perspective. We often focus on the things we can influence - what we think makes our organizations, solutions, processes - things we have created stand out and which we want people to showcase and get appreciated.

But here's the truth: prospective customers or members only care about one thing. Will you fulfill their needs? Will you help solve their problem? It's all about their need, not about our internal perceptions around great we think our services are. We must always remember this down-to-earth reality.

Remember, a strong value proposition is not a mere decorative slogan, but a well-crafted message that addresses the unique pain points of your target audience. It induces trust, fosters loyalty and ultimately, stimulates growth. Thus, continually refining the value proposition, to ensure it resonates with the changing needs and expectations of the audience, is crucial for maintaining relevance and competitiveness.

Value Propositions in Professional Services

In the professional services industry, value propositions usually revolve around specific solutions and expertise. For example, an IT services company might promise to deliver business results that matter to their clients. On the other hand, an electrical contracting organization might focus on delivering quality electrical services at an affordable price.

That's great, but given what is often a very competitive marketplace, how do these organizations differentiate themselves from each other? This is where professional services organizations can learn from membership bodies.

Learning from Membership Bodies

Looking at how membership bodies deal with this challenge can broaden our thinking in the services industry.

Membership bodies don't sell flashy products or solutions. Instead, they demonstrate value by addressing the needs of their constituents in a more partnership-oriented way. They stand for something, rather than just selling something. Their value proposition needs to be better understood, explaining how they solve their members' problems and attract people to a bigger cause.

Value from a Membership Body Perspective

Let's illustrate this point with an example. Take the National Electrical & Communications Association (NECA) in Australia, a membership body that takes a unique approach to selling value compared to a professional services organization. NECA's primary goal is to champion the success of the electrical industry, connecting businesses and empowering them while ensuring safety in homes. Their value proposition consists of three core elements: relentless advocacy for the industry, ongoing education to keep members relevant, and specialized services tailored to the industry.

Unlike a purely transactional approach, NECA stands for something greater. In a world where finding relevant information is challenging, where regulations constantly change, and where business owners often feel isolated, NECA tackles these challenges head-on. Their value proposition goes beyond selling a product or service; it solves the fundamental problems their members face.

Because the problem NECA solves is intangible, the value they provide must deeply resonate with their members. They need to represent something substantial rather than just selling a product. It's crucial for them to effectively articulate their value proposition, explaining how they address their members' problems and enticing them to be part of a larger cause. For many membership bodies, nailing the value proposition is essential for their survival, which is why they excel in this aspect. They can't rely on tangible products or services to sell or promote themselves. The value proposition and how they solve their members' needs are what they sell.

Imagine the potential impact if other organizations drew inspiration from membership bodies and found a connection between their customers' needs and something greater than just the services they provide. Some companies have already succeeded in this regard, like Patagonia, The Body Shop, and Tesla. These companies sell more than just products; they promote a mission and set of values. By aligning their value propositions with larger causes, they create a powerful bond with their customers and set themselves apart from their competitors.

Why Professional Services Companies Succeed While Membership Bodies Struggle?

In the fight for survival, membership bodies need to step up their game. But what sets professional services companies apart? Is it their value to customers, their profit-focused mindset, or their superior business management? Whilst there is no single reason or a panacea fix, there are some good indicators of why this may be the case.

One major obstacle for membership bodies is their non-profit status. They must break free from the misconception that sustainability is not a concern for them. To meet member needs and deliver value, these organizations must find ways to ensure long-term viability. There's much to learn from professional services companies in terms of how they operate, price their services, and measure success. Furthermore, there are exciting opportunities for exploring non-linear and innovative business models that offer sustainability and to solve more customer and member pain points.

Key Takeaways

Both membership bodies and professional services companies should consider these insights. By improving how they communicate value to address unmet needs and capitalizing on the economic value of differentiation, both can drive growth.  And the way they think about re-framing their problem statements through the lens of considering a client as a ‘customer’ but also a ‘member’ of their business community can really provide insights that are otherwise left unexplored.

In the next post, we'll look at how more innovative thinking around commercial business models, can play in sustaining growth - an area where there is much to be learned and shared between professional services and membership bodies.