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The Biggest Mistake Staffing Companies Make
I grew up in the staffing industry. My parents started their first staffing firm in 1968. Over the years, I’ve seen many changes in the industry. And, as president of our firm, I’ve been privileged to work with hundreds of staffing firms.
What pains me most about this business is that most staffing firms (including Mom and Dad’s) are making the same mistake.
THE BIGGEST MISTAKE
Before I get to the mistake, let me clarify. I’m not an operations guy…I’m a sales and marketing guy, so my perceptions may be somewhat biased. Also, this mistake doesn’t have an easy fix (which is why so many
firms are making it). That said, here is the biggest mistake staffing companies make:
Staffing companies try to differentiate on service.
WHAT’S THE PROBLEM?
You may be thinking, “David, we’re in a service business, we have to differentiate on service.” Or, “I know everyone says their service is better, but ours really is.” (And if I had a dollar for every owner who said this, I could take a very nice vacation!)
The problem with differentiating on service is that it can not be done. Think I’m nuts? Picture your top 10 competitors selling to you. What would they say? How often would you hear some variation of “our service is better?” Would you believe them? Would you pick any of them because “their service is better?” Neither would most Human Resources (HR) professionals or hiring managers.
And the more you say “our service is better,” the more you sound like everyone else…and the more people will ask “what’s your price?”
SO, HOW DO YOU FIX THE MISTAKE?
To survive in staffing, you have to offer great service. But even if your service is the absolute best, it’s still hard to differentiate on this point. So what can you do?
- Focus on a niche market you can own
While you can’t be the best at service to everyone, you can own service within a limited market. Many
firms have found success (and higher margins) by focusing on specific types of positions and industries. Look what MacTemps (now Aquent) did in graphic design staffing. Today, many firms are doing very
well in clinical trials staffing. And over the past few years, the professional staffing niche has been among the fastest growing.
By focusing on a smaller market, and specifically tailoring your service to that market’s needs, you can differentiate on service…at least until the niche gets too competitive.
- Differentiate on a tangible aspect of your service
Service is a complex subject. Rather than trying to be the best at everything, focus on one component of service. For example, look at Domino’s Pizza. They built a huge company by concentrating on one critical element of service: delivery. What aspect of staffing service can you own?
- Find a way to “prove the value” of your better service
To sell better service, you must: demonstrate (tangibly) the value of better service, and prove you can deliver this value. Ask your team to brainstorm the benefits your “better service” provides. Determine exactly how you help clients improve revenues, control expenses and eliminate headaches. Then, make your
higher-level of service structural. In other words, design a step-by-step process that guarantees consistent delivery. For example, if you say “we’re more responsive,” then your service delivery model should minimize response time. By making your service process tangible, you can prove your value.
- “Out-hustle” the competition
This is the strategy most often used in staffing. And it does work. Unfortunately, it also “burns out” sales reps and increases turnover. Since service quality is measured by consistency, the more turnover you have, the lower your quality will be perceived!
- “Out-market” the competition
A sales trainer once told me, “it’s not the best product that wins, it’s the best story.” As an alternative to just working harder, consider out-marketing the competition. Here’s how:
- Have a plan. Identify who you want to target, what message you want to deliver, and how you will get your message delivered.
- Be bold. To capture the attention of your target audience, you have to take risks.
- Be persistent. Repetition is the key to success.
- Be consistent. Make sure you always convey a consistent message.
- Integrate marketing and sales. An integrated campaign of direct marketing with sales follow-up can produce spectacular results.
- Be even more persistent. To close sales, you have to capture attention, differentiate your services, build trust in your abilities, and be in the right place when a need arises.
If you asked “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. Good marketing is a great differentiator…if you stick with it!
Haley Marketing Group
Remember, Haley Marketing can help! Whether you need assistance with direct marketing to get the door open or nurture marketing to keep it open, call on us. We have two new, and very cost effective solutions that can help your business to stand-out, stay top-of-mind, and increase sales.
Just give us a call if you'd like to know more: 1-888-696-2900.