Profiting from the past

Edinburgh Castle is a five-star visitor attraction, visited by just over 1.3m people from around the world each year. Like many Edinburgh residents, I had been round the castle as a child, and once more when friends were visiting many years ago. I have to admit, my perception was of a rather boring, military-focused series of buildings. It has changed!

I heard a talk by Malcolm McEwan, the castle’s retail manager, and I was struck by similarities between the journey the castle has embarked on, and the challenges faced by many professional services firms in the post-recession and evolving market place.

Edinburgh Castle clearly embodies heritage, history and tradition. Rightly or wrongly, I might have said the same about the professional services worlds in the past. Rather staid, steeped in tradition and somewhat mysterious to the general public.

The owners of the castle, Historic Scotland, have worked hard to make its offering fit the modern visitor’s expectations. One of the things they did was to recruit Malcolm from the private sector to oversee their retail offerings. Malcolm is also one of the duty managers in the castle, so has a good overview of everything that has been done to engage with customers.

I wondered if the professional services world, with its similar long history, traditions and deep knowledge base, could learn from their experience. In a chat with Malcolm, I explored this further.

Being relevant

We all know by now that we need to adapt to changing economic, social and technological changes. Malcolm explained that they are always looking for a story to tell in the castle. They are much more collaborative in working with other organisations such as the Tattoo, who use the Castle Esplanade, and schools. They hold “concerts at the Castle”. They host over 30,000 educational visits a year. I have also experienced their events programme using costumed interpreters, who can bring the history stories to life.

The castle is an iconic building which is used by the Scottish Government, and which is also a military base. Malcolm noted that everything that is done there is about respecting the heritage and integrity of the site, but at the same time making it accessible and relevant to as many types of visitor as possible.

Practitioners in professional services are often drawn to a profession by love of the intellectual and technical demands it provides. They might respect the long history and traditions that have ensured its integrity and survival. There may even be a desire to make the world a better place through our work. But how can we make what we do more accessible? How can we be more collaborative, or provide education for youngsters or foreigners?

Being commercial

Edinburgh Castle generates just short of £16.7m a year – 50% of all of Historic Scotland’s income. It therefore plays a pivotal role in supporting the whole organisation. Of that total, 19% is generated by the castle’s shops.

Malcolm was recruited from the high street retail sector to oversee these outlets, and has brought his commercial experience and business acumen to them. He noted that working in the castle was different from working for shareholders, where strict financial targets are the norm. There were few of the robust targets set for the shops when he joined, and he had to introduce additional key performance indicators that would help them run more effectively – things like sales against budget, sales against last year, conversion rate (how many sales compared to the number of visitors) and average transaction value. Keeping targets visible and understood by everyone is the way to see improvement, and encourages maximum buy-in from all those involved.

I have asked partners in professional service firms what their most profitable work is, and sometimes they can’t tell me. Quite often fee income is known, but not how much of that is profit. The distinction is important in any business. Firms can decide to put up with low, or even no, margin in certain areas to weather a downturn or provide a “shop window” to other services. However this should be an informed choice if it is to be sustainable.

Historic Scotland can only support some of its lesser known properties by maximising the commerciality of “crown jewels” like Edinburgh Castle. Many professional service firms could benefit from being as analytical about their own offerings. Key questions are:

• Who are your most profitable clients? How can you keep and develop them?
• Which offerings are vital portals for bringing in wider work for the firm?
• If some offerings are not profitable, why are they still being offered? There may be good reasons, but they should be known.
• What are the clients of the future likely to expect in service delivery?

Key clients

I was talking about my visit to Edinburgh Castle to a friend and she commented that she felt it was expensive to visit. The standard entrance fees are quite steep, but I highlighted that my family are members of Historic Scotland and this provides extremely cost-effective entrance to all their properties. We are “existing clients” if you like, and we stay loyal because we get quarterly magazines, priority access and money off in their retail outlets.

When I was talking to Malcolm, we explored the castle’s “key customers”. He pointed out that a disproportionately large amount of money is spent by wealthy foreign visitors, and many of the more successful retail product ranges have been geared towards this demand. The domestic market is not being ignored – there are ranges for all tastes and price points. However, commercially it makes sense to pursue the most profitable customers. Included in the high end range of goods are rare and expensive bottles of whisky, and quality jewellery made by Hamilton & Inches. This has an Edinburgh hallmark, and is hugely attractive to visitors wanting quality souvenirs with a strong link to the castle and Scotland.

He noted that, at one point, someone suggested charging for bags, in line with practice in supermarkets. Malcolm pointed out that some foreign visitors may buy 15 items and want each in its own bag, because this is part of the provenance of the gift. A branded bag was a necessary investment in the sales process.

The message? Know your key clients! You cannot be all things to all people. What “packaging” do your key clients want? In a recent discussion with a law firm, there was much debate about the quality of the coffee and biscuits. What do you think your clients expect? Do they want to feel your firm provides good enough coffee and biscuits for the job. They might be pleased that you’re not wasting their fees on extravagant extras. Or if your clients are high net worth, they might be thinking your business is struggling or that you don’t respect their needs. What would your clients like? Do you know?

Getting feedback

I often ask partners in professional service firms what happens if they’re not there to answer a call. Quite often they will say something like “I assume that...” or “someone else takes a message”. I then suggest they might try calling into their firm just to experience it.

Now often the process of handling calls is very slick. But sometimes – and I’ve called a lot of firms – the phone just rings out. If I were a key client, I might not be too impressed.

At Edinburgh Castle, Malcolm noted that they usually just have one shot at getting the customer experience right. Apart from members, most visitors will judge their experience on a single visit. It matters how they’re treated at the ticket desk, the internal attractions, the restaurants etc.

In the age of the internet, visitor experiences are immediately shared for all to see, so Historic Scotland puts huge efforts into getting feedback. These include mystery shoppers, exit interviews, feedback sheets and mobile data-capture screens which can get feedback on specific events. They also monitor Trip Advisor. Perhaps the most impressive thing, though, was the news that the executive manager personally replies to every single piece of feedback, whether positive or negative. Malcolm noted that, if you take complaints as an opportunity to improve, you can often turn dissatisfied customers into huge fans.

In today’s age, I might suggest that we all need to take the same care over client experiences. Every single touchpoint with your firm will create an impression. It will add to or diminish the perceived value that your firm offers. It’s as blunt as that. If you don’t monitor these experiences actively, you run the risk of getting unpleasant surprises when it comes to clients re-buying (or not).

In summary

I really enjoyed our last family visit to Edinburgh Castle, and Historic Scotland’s other property, Stirling Castle. We listened to some opera, and my children had pictures taken with lords and ladies in costume. I was tempted to try a whisky by the hugely engaging man in the food and drink shop, who clearly loved his job. Ultimately it’s the people who add value to any business’s results. What can your firm do to make the client experience more friendly, easier to access and right first time?