How Australians spent their money in 2014
I was reading the news the other day and came across the article on the Sydney Morning Herald, Welcome to the Barista Economy, 11 March 2015, by Jonathan Shapiro.
The article sheds light on some interesting statistics -- the main one being that Australians are spending more on services than we’ve done before, taking information from the Christopher Kent’s speech (from the RBA).
This certainly holds true for me personally. I was balancing my budget the other day and found that a significant amount of my spending is now dedicated towards services such as handymen, personal trainers, nutritionists, consultants, etc.
Assuming this is the case for a lot of other Australians, this presents a huge opportunity for those in professional services as we’re allocating more of our budget to services instead of goods.
The article talks about services that we spend money on in three broad categories:
1. "Tasks where our time is better spent elsewhere"
2. "Tasks where we don’t have the skills and"
3. "Tasks that improve our quality of time..."
Professional services generally fall into categories 2 and 3
But that doesn't mean we can expect revenue to roll in without doing anything differently to the way we have done things in the past. Clients behaviour is changing and in turn we need too.
Services where clients don't have the skills (category 2)
Traditionally, this is where many professionals (accountants, lawyers, consultants) have great success. We help our clients in areas where we have expertise and they don't. This goes from providing advice down to the more basic matters. By basic I mean, if you’re an accountant, tax compliance. If you're a lawyer this may be filing documents with ASIC and other government bodies. If you're in technology, it may be the development of applications to perform specific functions.
In today's world though, clients have more choice than ever when it comes to how they now deal with their basic affairs.
There are many sign up and go technology solutions that handle clients books, reporting, project management, expense management, email management, etc. Unless professional service providers can add additional value to what clients can get over the shelf, we will become optional rather than a necessity.
And then there's the extra alternative of outsourcing to throw in the mix. With many overseas service providers able to build great relationships with clients all over the world through improved communications and file sharing technology. In fact, CEO of Manpower believes this will be the way of the future.
Services that improve a clients quality of life (category 3)
That’s why I believe that it's category 3 that presents the biggest opportunity to professional service providers locally. We are in unique position because we are here in the same time zone, we understand the local culture and laws. And we can see our clients face to face. All we need to do is demonstrate that those unique characteristics translate into real benefits to clients in terms of their quality of life.
To do this, we need to consider how we can add more value and do more than just the basic things for our clients. We need to focus on things that technology or outsourcing can't achieve. Failure to do this can mean you lose out on the big services opportunity that we have right now. Or worse, the slow decline of our existing business model.
What you can do
- Brainstorm the areas of your business that technology could do
- Brainstorm the areas of your business that could be effectively and efficiently outsourced
- Determine the amount of revenue each the above brings into your business every year – this is the revenue at risk if your business doesn't adapt to the changing market place.
- Consider the areas in your business that don't fall within steps 1 & 2 – how can you structure your service model to start making more revenue out of theses?