Thursday, October 23, 2014

Working Within Your Core Competencies

Written by  Gary Kuty

competencies


As competition ever increases and precious clients become harder to hold onto over the long term, service companies continue to search for creative ways to build value to their clients and prospects. Many times, those efforts to become “everything for everyone” cloud sound business practices and actually contribute to companies losing business. I have long advocated that, as a company, we must be a “single source” for our clients. However, many companies have taken that concept a step or two too far; actually diluting the core services they offer, and often times at the risk of jeopardizing current business.

Let’s examine what it truly means to be a single source to your clients and prospects. A single-source company is not one which can provide your building maintenance, wash your windows, valet your cars, provide security and operate the cafeteria. Although, in a sense you may say this is a single-source provider, the reality of it is that the more your company strays away from its core competencies, the more risk there is to providing inferior services in one or more of the services you offer. Some companies, albeit very few, pull this off. However, those companies have very strong infrastructures and/or divisions that run independently set seamlessly to its customers. All of us started our companies with one strong service, building services, security, consulting, maintenance, lawn care, etc. We have worked with many companies that, in lieu of perfecting the core service(s), attempt to provide a “laundry list” of services. The problem we see is often they develop the additional services with little or no expertise and, in the long run, fail miserably. Even worse, we have seen companies begin to dabble in real estate, bail bonds, fireworks and other types of companies that have no direct relationship to the core services they have become known for to their customers in the past.

There are many variables that can create this scenario. Your business may be producing great revenue so you look for other opportunities or areas to diversify your company. The risk here is that, as owners, we are presented with opportunities that appear to be “good buys” and those with income potential, but do we take the time to carefully analyze and consider how that particular business fits into our current model or footprint and how it may enhance (or take away from) the current services we offer? You may then become consumed with the new business, neglecting your core competency business, consciously or subconsciously, and at the risk of losing customers for service failures. Therefore, unless you purchase a business that will run independently from your current business, it is essential that you give careful thought on how this new piece of business will integrate with the old and analyze if it will add value or diminish the value of the services you currently offer.

My definition and recommendation of being a single-source company varies from the mainstream, yet logically makes perfect sense. As an example, in my business I provide management, marketing-sales consulting services to the service industry. I cannot clean your building, install cameras or access control systems, wash your windows or provide any of a myriad of other services that you may utilize or require on a day-to-day basis. When customers call with such requests, it would be very easy for me to simply say I do not provide those services and refer them to the phone book. However, as a single-source provider, whenever I receive a call from a client or prospect for a service or product out of my core competency, I react in a very different, yet proactive manner. It is simply sound business practice in my estimation to make every effort I can to identify a strategic partner or alliance company that offers those services. I will even perform the research and legwork to make it happen. This adds tremendous value to your company in the eyes of your clients and prospects and saves them valuable time and research. They will begin to call on you routinely as a matter of trust and respect which can only enhance the relationships you have with your clients. If you or your staff makes a decision not to help them along the way, you depreciate your value and risk losing customers. As an example, your client may call and request a service that you do not perform, but competitors may perform. If you don’t carefully guide them to a company you have a strong relationship with, they may contact a competitor that performs that service and—by the way—the same core services you perform for the customer. It’s not difficult at this point to figure out the marketing and sales strategy your competitor will offer them at this point as they make themselves a more valuable commodity than you offer the client.

The first lesson to learn is never give a client or prospect a reason to call a competitor or another company for any service you could easily call on for them. This is how you add your value to your clients, being a single source. Business is too hard to come by to watch it walk out the back door by failing to provide single-source services to your clients. Therefore, you don’t have to offer each and every service a client or prospect may need, but you do need to develop strategic alliances and/or have close relationships with companies that can help where you remain in control of the process, directing to whom your client should be reaching out to for such services.

The second lesson is: Don’t forget who brought you to the dance! Your company became well known or successful for a core type of business you sold to your clients. If you are going to venture out into other business opportunities, pay careful attention that the venture does not take away from your core competency as a company and it fits within the blueprint of your business model. Providing ancillary services can only be value added if those services can be provided without impacting your core business.

Gary H. Kuty is a senior consultant and CEO of Kuty & Associates in Dayton, OH. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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