For 20 years, the Client Choice Awards have provided a voice for clients of professional services firms.
While other awards programs exist, these are the only professional services awards in the world that use client feedback to determine winners rather than industry experts or judging panels.
The client ratings that determine winners of the awards serve a dual purpose. The same data is analysed in our annual Beaton Benchmarks study, which began two years earlier in 2003 and compares professional services firms of a similar size and industry across a range of metrics. It is the only comprehensive dataset of independent client insights, benchmarking and tracking available on the market.
As Beaton celebrates the 20th anniversary of the Client Choice Awards, this article covers some key history and insights from two decades of data.
Why a Client Choice Awards? A short history
A focus group of lawyers and their clients first sparked the idea for this research in the 1990s. The group was exploring what price and value meant in legal services. It led to Dr Margaret Beaton’s trailblazing thesis at Melbourne Business School, which found perceived value contributed more to clients’ choice of firms and loyalty than structural factors like switching costs.
The model of client buyer behaviour first developed in this thesis was used as the basis of the first-ever Beaton Benchmarks study in 2003. Thirteen of Australia’s fifteen largest corporate law firms participated in the inaugural survey.
Feedback from firms who participated proved there was an appetite for using client voice and evidence to inform firms’ go-to-market strategies.
We concluded that a client-decided awards program may prove more valuable and have more material impact on firms than other judge-determined programs.
And so, in 2005, the Client Choice Awards were born.
These first awards expanded the study from just law firms to include accounting and consulting firms and consulting engineering firms. Over 40 firms signed up – many of whom still participate in the awards and its underlying research to this day.
The 2003 cover of BRW magazine announcing winners of the very first Client Choice Awards.
Fairfax’s BRW magazine published news of the first awards on the front cover (pictured above). More than 200,000 sold out on newsstands the morning after the gala dinner, making history for Fairfax.
The awards entered the New Zealand market in 2008, and in 2018, we started measuring the clients of IP specialist and patent attorney firms.
In 2020, the Covid-19 pandemic struck, and the annual awards gala dinner had to be cancelled. For the first time, the awards went fully virtual. This resulted in an unexpected “democratisation” of the process: more firms in places other than Sydney or Melbourne and smaller firms were able to participate. For this reason, Beaton has continued to host virtual awards and offer them to firms of all sizes across Australia and New Zealand ever since.
In the two decades of the Client Choice Awards’ existence, 765 firms have entered, and clients have provided more than 400,000 individual firm ratings. The Client Choice Awards judging process has continued to inform Beaton Benchmarks annually. Every year, dozens of professional services firms subscribe to this research and use the data to guide their client strategies and BD activity.
What two decades of research is telling us
1. Value has increased while fees have not
Our Beaton Benchmarks research derived from 20 years of Client Choice Awards has highlighted some key trends in professional services.
One major trend we have uncovered and continue to witness is that clients of professional services firms believe they are receiving more value than ever. Interestingly, they do not perceive the prices have materially increased at the same time.
In fact, clients’ perceptions of fees have been steady or falling since 2011, as the below graph shows. The grey line illustrates how law firm clients rated fees for expensiveness (6.8 out of 10) back in 2011, and every year to 2023 (6.6 in 2023). At the same time, average client scores for firm performance are steadily on the rise (rising from 7.1 to 8.1 out of 10 in a decade).
Clients want (and are receiving) more for less. The value of professional services is increasing but prices are not.
Fees vs performance ratings of Australian legal and related services firms
2. Price is not the major reason clients leave
As the professional services market grows increasingly competitive, many firms are cautious about increasing their fees. They are concerned about the impact higher prices might have on their clients’ perceptions of value and their share of clients’ wallets. However, Beaton Benchmarks data over the past 20 years has highlighted that price is not the primary driving factor for clients choosing to use a particular firm.
In fact, clients are often willing to pay a premium for an excellent client experience. They are also prepared to pay higher fees for complex work, requiring unique expertise and experience that other firms may not have.
It is when clients feel they are not receiving value for money that they may decide to shop around. Our research shows some of the top value “markers” for a client include effective communication, cost consciousness, the commerciality of your advice, reliability and how easy your firm is to do business with.
Communicating value and how you offer it should be a critical part of every pricing strategy.
Beaton Benchmarks data over the past 20 years has highlighted that price is not the primary driving factor for clients choosing to use a particular firm.
3. Higher fees can increase clients’ perceptions of value
Related to the above point, if you are offering relatively high value and communicating it well, your firm should be able to charge a higher price and maintain customers.
It sounds counterintuitive, but 20 years of data has confirmed higher fees correlate with higher perceptions of value for clients. In the same way a hefty price tag on a designer handbag signals high quality in a customer’s mind, high fees from professional services firms may high signal quality to clients.
For firms that are cost conscious (careful and diligent with clients’ money and passing on costs), higher fees reap rewards. Clients are more likely to trust your firm, and that trust permits the firm to charge higher fees, which signals higher quality. It is an ongoing virtuous cycle.
The one exception to this rule is if a firm performs poorly and is not cost conscious. For non-cost-conscious firms, charging a premium fee will only add insult to injury.
4. Loyal clients are prepared to pay more
Clients who are receiving value, cost consciousness and quality service are likely to be more loyal to a firm. As many as 86 per cent of clients who believe they are receiving high value from their firm say they are likely to continue using the same firm in two years’ time. Contrastingly, only three per cent of clients who believe they are receiving low value from a firm say they will continue using the firm in two years’ time.
The crucial part of this insight is we have discovered clients who are loyal are prepared to pay more than they currently do. The below graph shows the totals of respondents willing to pay more.
As the below chart shows, at least half of clients who believe they are receiving high value are prepared to pay more. It applies to all types of clients, with no material differences among the accounting, built and natural environment consulting and law professions.
Value perception and willingness to pay more among legal/related services clients
Beaton Benchmarks is the most extensive, globally unique database of client feedback on professional services firms, which draws on two decades of large-scale research through the Client Choice Awards. We use this benchmarking data to help analyse your firm’s market position and track changes in client expectations, then help your team to meet and exceed those expectations.
Please visit our Competitor benchmarking page for more information or contact us to discuss options with a Beaton partner.
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