Podcast Episode 10: How Claire has increased revenue by 40% and profit by 20%

Hello, James here and welcome to this week's client special podcast.

Today, we're going to celebrate the amazing growth that Claire Watt, Owner of Ditton HR has achieved this year. 

📈 Claire has increased turnover by a whopping 40%. 
📈 She has increased profits by a huge 20%. 
📈She has transitioned from an associate model to a hybrid model. 
📈 And to top it all of, she was awarded the highest growth award at this year's annual HRi conference. 

So in today's podcast, we're not only going to hear more about Claire and her growth journey to date. 

Most importantly, we're going to find out exactly what she's done to achieve the amazing growth that she's had this year. 

So let's jump straight in. 

James: Hello, James here, and welcome to this week's client special podcast. Today, we're going to celebrate the amazing growth that Claire Watt, owner of Ditton HR, has achieved this year. Claire has increased turnover by a whopping 40%. She's increased profits by a huge 20%. She's transitioned from an associate model to a hybrid model. And to top it all off, she was awarded the highest growth award at this year's annual HRI conference. So, in today's podcast, we're not only going to hear more about Claire and her growth journey, but most importantly, we're going to find out exactly what she's done to achieve the amazing growth that she's had this year. So, let's jump straight in.

James: Hello, Claire. Well, thank you so much for joining me on today's podcast. Today we're going to celebrate and talk about the awesome year that you've had. You've increased turnover by a whopping 40%. You've increased profit by a huge 20%. And that is the true marker of growth, I think. And you've transitioned from an associate model to a hybrid model. So, you've now employed two members of staff that work alongside 21 associates. And to top this all off nicely, you are awarded the highest growth award at this year's annual Hriden conference. So, listening back to what you've achieved, how do you feel about the amazing year that you've had?

Claire: Well, thanks for having me on your podcast today. I feel really, really proud of myself, actually. And I know it sounds slightly big-headed, but I put some objectives in place a couple of years ago and winning the award, and it summarized like that, you know, I should be proud of what, what I've done. Really?

Claire: Yeah. So I feel really, really pleased. Thank you.

James: I think the consultants listening to this podcast would love to know more about you, your background and your journey. So, how would you feel about properly introducing yourself to our listeners and then giving a whistle stop tour of your career to date?

Claire: Okay, so I'm Claire Watt, and I run an HR consultancy called Ditton HR. I did a psychology degree. Didn't really know what I wanted to go into, but really like the occupational psychology modules, I thought, oh, maybe something to do with HR people quite like business, that sort of thing. So, started off as an HR assistant in a law firm. After graduating, worked there for a couple of years and then moved to another role where I was HR manager. And about three months into that, role. The HR director left and they didn't replace them. So immediately I was heading up the HR department.

Claire: There were about 100 staff, and I thought, right, I need to do more in the HR field. So then I did my masters in personnel and development alongside working. So that took three years. And then I've basically headed up the HR team ever since. So I kind of had to hit the ground running. I only had a couple of years as a manager, but it was great experience because obviously that's a really good way to learn if you can cope with it. So then I moved to different roles as director of HR in different areas. Charity, not for profit, legal, tourism, various things. Got a lot of experience. And then my last role was director of people at Samaritans. I did that for nearly four years, and that's where I looked after the HR, the employees and the volunteers. After four years there, I decided that I needed to do something more flexible because I had young children, they were at the time, four and seven, and I had a full time nanny. I didn't see them, I didn't go to sports day, you know, all that stuff. And I just thought, this isn't really my life. So I took a real leap there into the HR consultancy world. I was scared because I was on a good salary and it was reliable and I didn't know how this was going to turn out, but I felt if I didn't do it, then I would just always be stuck in this kind of full time role, struggling to juggle the children, missing out on things I wanted to be there for. So I had a difficult conversation with my husband in the pub where I got this folder out with all my thoughts I had been keeping secret from him and basically said, I'm going to do this. I need to do this for my own mental wellbeing and the wellbeing of this family. And he looked scared as well. But I did it and I've never looked back.

James: So, having known you for a number of years now, I know how much of an active family life you have. And I'm so impressed that you're able to manage all of the personal pressures you have. In addition to growing such a successful consultancy, many of the consultants listening to this podcast right now will be working mums. They'll be caregivers to their elderly parents, and we'll have all of the same pressures that life puts on us. And I think they would love to know how you've managed to juggle everything. So how would you feel about talking to me a little bit more about the personal pressures you've had and how you've managed this alongside growing your business?

Claire: Well, I would say that having your own business is a really good way of being able to flex around these sort of issues. So basically, it was about three years ago, the kids were like 17 and 13.

Claire: My father and his wife, we found out both got dementia at the same time and it was around lockdown as well. So there was a lot going on. And at this point, I've been in business for nine years and had quite a big team around me, but I was still doing a lot of the delivery myself. And at that point I was like, well, I need to sort out stuff for the kids, I need to sort GCSE's going on. I have to sort out care for my parents and work out what's going on there. I had to immediately get my clients over to one of my team and give them the confidence that they were going to do a good job as well and pull away from the business completely. So I did that. It was forced on me in a way, but it was the best thing that could have happened because the clients quite quickly got confident in my team because I trusted them, they trusted them. And then it relieved me to sort out some things in my home life, which sort of went on for up to a year, really on and off. It was really hectic.

Claire: And then after that, I thought, I need to get back into the business. But what's my role now? All my team are running all the service delivery, so I've carved out my role now and I haven't gone back into operational delivery very much. Very small bits that I really, really like to do or I'm a specialist in, I might get involved in, but now my role is really managing the team and growing the business and getting our name out there and networking and business development, really managing the finances. So doing all that side of things, and I know that people will say, well, you're out of the delivery, so how do you know what's going on and how do you keep up to date with everything? I'm constantly speaking to my team. If they're doing like an investigatory report or a strategic review report, I will review that. I'm still in control, I'm still involved, and I will give them my feedback and everything. So I haven't let go completely. I'm still involved and I'm still doing the nitty gritty, just not directly, all the time with the clients.

Claire: So that's a good thing. And now, because I'm not delivering, I can be more flexible with my time. I can flex it around the kids and parents and other commitments and going on holiday and doing the gym and all the things that we all want to do. I do try and prioritize that now.

James: Yeah. I love how you position that to be an absolute flex.

James: So you have had an incredibly busy personal life. You have had to look after your parents. You've got two young girls, one's in university, one's just doing their GCSE's. So lots of people could get really overwhelmed by their personal and business responsibilities. I'm always so in awe of seeing people manage that so well. And hearing you talk about your business is an actual flex that gives you the time and freedom to be a present parent and present daughter and all of those great things is so lovely to hear. I love that you came onto your business model as well and how you've evolved, and that leads us really nicely on to learning more about when you started Ditton HR. What did that look like and how has it evolved to where you're at to date?

Claire: Yeah. So when I started, obviously it was just me. I wanted to work about three days a week flexibly. And that was fine for the first sort of six years or so. Worked fine, gave me a good living, really enjoyed it, really flexible. And then when the kids were a bit older, I thought, I need to get more into the business. I had lots of work coming in and I was turning loads of it away and giving it to other people and just thinking, hold on a minute, I can do more with this.

Claire: And that's when I decided to take on a few associates. I wasn't brave enough to take on an employee at that point because I hadn't tried out properly. So I started building my associate model and that grew and grew and grew quite rapidly. And that's how I built the business. So I would have a team of associates who are freelancers, so I could offer them the work if it was there, they could accept it or not accept it, depending on what was going on in their lives, and then flex my work around that. And then I will get, obviously, a percentage of what they earn because I've got the business in, because I'm managing the client, I'm supporting them. So I did that for a number of years. And then I had the three years ago where I had to take time out and delegate things. And then in the last year, that's when I've taken on a couple of employees. I bought them in house because I had enough work then I knew pretty much what my monthly turnover was going to be and how I could afford someone, and that's now a hybrid model. So I've got my core employees and I'm looking at maybe increasing that by one or two headcount over the next year. And then around that are my associates, so I can flex depending on the business coming in, and also on the needs of the clients. So say the client has a specialist need, like mediation, for example, or a GDPR need, or a health and safety need. I'm not going to expect one of my team to be a specialist in that area, necessarily, so I will then use one of my trusted associates that works in that area and pretty much only in that area. So I still have those. So I think that's a benefit. So if you had everyone in house as an employee, you wouldn't be able to source all those skills necessarily in a small business.

Claire: So having those as trusted partners or trusted associates works really well, I think.

James: Yeah, I love this. So you started your consultancy as a lifestyle business.

Claire: Yes.

James: It was to bring the money in around your lifestyle. You had more work coming in than what you could actually deliver yourself. So rather than turn that work away, you saw an opportunity to make profit on that work and decided to start working off an associate model, which is a risk-free way of doing things. And then over Covid, you obviously had to look after your parents, you had to look after your kids, and you had to take a step back from client delivery as well. And because of that, you really positioned yourself as the business leader rather than someone who's in charge of delivering client work. And I think that is a really good flex to do and how I think every consultant should be aspiring to grow their consultancy. And now things are a little bit more settled, you've moved over to a hybrid model and are looking to employ more people in the future as a way of making even more profit for yourself.

Claire: Exactly.

James: I love this. And for me, this is a theme of flexing. I love the theme of flexing your business around you. It's your life vision.

Claire: My priority list for you guys, which is why I started using you in the first place, was when the book came through the door. And it was something along the lines of live the life you want, live flexibly, enjoy your job, but also enjoy your work, your life balance and all that sort of stuff. It hit home. Yeah, that's what I want. I want something that wasn't all-consuming, something that complemented my life and enhanced it and gave me something to strive for and gave me satisfaction and all that stuff. But wasn't the be all and end all. And I could work it around my other commitments and my other interests and things, and especially holidays.

James: Yeah, we have a holiday, don't we?

Claire: We love a holiday.

James: I think the word lifestyle—I said this at an event I was at last week—I said to a client, oh, okay, you have a lifestyle business. Then she kind of looked at me as if that was a negative, and I don't think it's a negative term at all. Most businesses are created either from pure passion or pure ambition or due to their lifestyle and out of necessity. I think it's a really positive thing to create a lifestyle business, because what you're doing is you're putting your life first and foremost.

Claire: Yeah, yeah.

James: That's the most important thing that any of us can do. And the book that you're on about is called Firing People Doesn’t Grow Your HR Consultancy. So that's how I first got connected. I bombarded her with many emails offering her a free copy of my book. And that book was just written just off the back of Covid. It was very much around, look, even though you might want to create a proper business, that business still needs to not trap you inside. I use the term a prison of your own design. You can either create a business that gives you the personal and financial freedom that you want, or you can create a business that traps you inside. And that book is very much around that concept and around empowering you to create a business that you loved about a business that provides you with the personal and financial freedom that you wanted. Claire, do you think that if you didn’t put yourself in this kind of leadership position, you would have been able to grow your business to what it has been today if you were still delivering client work?

Claire: No way. No, no. I think when you're in the service delivery, you're not really thinking. You can't see the strategic view necessarily so well. You're on that treadmill of just getting the work out, and you're too sucked into the client work. Unless you've got a lot of time, I'd say at least half your time on managing the business, looking at it, developing the client pipeline and all that sort of stuff, then I think it's quite hard if you're delivering the whole time, to do that.

James: So, Claire, what would your advice be to a consultant that is still delivering client work and wants to grow their consultancy?

Claire: I mean, I hear it a lot. I hear a lot of people that say they're exhausted and they're run ragged. Delivering it is difficult. It's a completely different job. And I get it. That's your comfort zone, isn't it? The delivery, that's what you've always done. The clients want you as well at the beginning. They know you, they trust you. It's your face heading up the business. They want the best, they want the top, but you're not necessarily the best at everything. I've got way better people working for me in lots of different areas. And that's the message you have to get across, really, to the client and just get them to trust in who you trust and then pull away. So you could start off by, you know, you're still supervising their work and you're still in a little bit, and then with time, you can pull away. And it's actually a really nice feeling.

Claire: Well, I found it anyway. It was a big relief not to have that, because with the business development, I can do as much as I want or I can reduce it depending on what's going on. Whereas if you're delivering, that's just relentless, ongoing stuff that you can't really do that so easily. So for me, it was a big relief.

James: I remember speaking to you at the start of the year about your packages because you wanted to increase your recurring revenue. You wanted to get more people paying you on a monthly basis, but you didn’t know how to turn this big, fast piece of HR that you do into a subscription form of revenue. And you were saying to me, oh, I don’t want to offer unlimited support because how long is a piece of string? And after speaking, I said to you, we can’t package up HR in this way because we haven’t first figured out a way to organize HR in the first place. And we need to do that before we can then package up. And as a result of our conversations, I created the HR Service Pyramid as a new framework to help you break down the different levels of service you guys offer and package it up in the right way. You also came along to my Recurring Revenue Revolution event in June. So how would you explain the HR Service Pyramid to the consultants listening to this podcast? And how has this helped you to think about how you package up your services?

Claire: Okay, so I think we all struggle a bit with selling what HR consultancies do and the benefits. And then we had this conversation about packaging up your services and also getting this baseline of recurring income coming in every month. You put the pyramid together, which starts off with HR admin, which is basically breathe HR or some sort of HR software. Then the next level is advisory, which is this whole thing that we all talk about all the time, which is the peace of mind unlimited hour retainer that everyone gets really stressed about. And I totally get it. And, you know, am I going to be undercharging and spending loads of time on this or the other way around? Is it going to be overcharged and the client's not going to get enough value for money? So that's the next level up. And I've put a lot of time into what is included in my peace of mind package. Then anything on top of that is basically either sort of hourly rate or project work. Okay, we want to get away as much as possible from hourly rate work because that's limited by the number of people you've got and the number of hours in the week, but there's still a requirement for it. So for example, if you're doing an investigation for a grievance, you could guess, oh, it's probably about five days work and you could give a project fee for that, but you just never know. As things progress, more people need interviewing. It can go off at different tangents. So we normally do that on a pay as you go basis. So that would be like manager director, specialist level. So specialists would be something like an investigation manager level would be managing a redundancy process or something, and director would be maybe like doing more strategic work and I talking on board of trustee meetings and things like that. So it's a pyramid of your services that you can explain to your clients when you're having discovery calls with them how they can work with you in different ways. So ideally you'd have them on breathe and on the peace of mind package, and then you would be upselling project work and pay as you go higher level, more specific and specialized work. The HR admin that is breathe, it's really quite easy to sell because it's such good value, it's such a low cost point for them. And that's your gateway into upselling other things because you're invoicing them every month and you're connected with them, they're going to come to you. If they need HR, then. So the next thing, obviously, that peace of mind, it's just another foot in the door, really, to upsell other things, like you said. So I think that's really helpful. I think the most important bit is the peace of mind package. Everyone understands the other levels, but the peace of mind level is the bit that we discussed a lot at the workshop.

Claire: And the thing I've put together now, I think for me clarifies what's in and what's out.

James: So one of the key things for me that I heard was that the HR service pyramid and understanding how you can break HR down and value stack it, that's a really key word I start using and want you guys to start thinking about your services rather than selling this big one chunk of HR that you just sell as a time based retainer actually can break it down. You can value stack, and you can create different forms of revenue by delivering the same sort of service, but just in a different way.

Claire: Yeah, yeah, no, you're right.

James: Really, this is my biggest kind of gripe with how consultants are approaching their work. They kind of just go to a business owner, you're all kind of generalists, so you can help with anything, and you kind of go in there, try and do a bit of fact finding, and then basically say, look, we can help you with anything, can come up with bespoke package, and then you just try and sell this big kind of chunk of HR at a time based level. And for me, that's a really big sales killer. So the goal and concept of the HR service pyramid was to first help you break down HR, help you understand the different levels of service and what service is, like you said, in and out of which one, and then how you approach new business as well. So instead of going into a new business and trying to sell straight away at director level, actually just get your foot in the door with HR software first. And this is a really key thing that I want you guys to remember as well. Get your foot in the door with HR software and then upsell your advisory package. Find those two things into a subscription based peace of mind service, and go and sell an HR audit piece, which is your gateway and the business owner's gateway, into getting customized support at the best possible price.

Claire: Yeah.

James: As part of the Recurring Revenue Revolution event, we also created a promotional deck. So for me, that promotional deck was to help guide your conversations that you have with prospects and business owners, to help guide your discovery calls, and also to give you something of value to give at proposal stage as well.

Claire: Yeah.

James: I did so much research into paying companies' elements of value to figure out all of the different psychological elements that a business owner needs to know to buy HR. And we put this together into a promotional deck for you guys. Since going through that process of breaking HR down in the correct way and having that promotional deck, how has this improved your confidence, having those type of sales conversations with new clients and existing clients?

Claire: Yeah, it's really, really helped. You know, before, when I've done a discovery call, it's been hearing all about them and then at the end a little bit about us and I've just kind of done it off the top of my head because this is much more structured. You've got something visual to look at, you know, they can email it to them afterwards if they want, and it just takes them through all the key things. Like you said that by the end of it they're like, yeah, you're. You're really good, you know what you're doing and we want you.

Claire: So, yeah, that has really helped with me explaining what my company does and my team do and who they are and how we can help.

James: So let's go back to the growth that you've had this year. 40% increase in turnover, 20% increase in profit, and you've employed two members of staff alongside 21 associates. How have you done it?

Claire: So, first of all, setting strategic targets. So I knew three years ago how much I wanted to increase sales and profit over the next year, and then again the following year and the following year. So I mapped that out and then I had something to aim for. I didn't know that I was going to make it, but had that to aim for. Then it was looking at existing clients and how can I maximize what I'm offering them? So going back to the existing clients that already obviously got a relationship with you, they trust you, and some that maybe you haven't contacted for a year, go back to them. They know you. They're more likely to buy from you because they know you than if you were just phoning up cold or whatever. So go to existing clients and maximize the offering to them. Then obviously getting a new client, which is the whole marketing on LinkedIn and sending things out on your mailing list and on your website and using, you know, the HR marketing box to do that, also networking, joining your local chamber of Commerce, things like that I found quite useful. Then I reviewed my pricing because we hadn't reviewed our pricing for years and years and years and used HRI survey to back up what I was saying to clients about what other consultancies charge.

Claire: So I reviewed the pricing, making sure they were a decent level, packaging up services differently. So rather than always just saying hourly rate, we put up the recruitment packages, coaching packages, mediation training, various things like new starter kits, got those out. So they were making a bit more money than if it had just been maybe an hourly rate or a project and then also taking on staff. So at the time, I just had a purely associate model like a year ago. So I'm spending a lot of money on associates, you know, they're expensive. So I got the confidence, probably too late, probably should have done it years ago of taking on my first couple of staff members. And obviously then you've got a completely different way of working and you're making more money.

Claire: So they were the six things that I did to grow the business.

James: Claire, you've been in your consultancy twelve years, you've had your ups and downs. It's gone from lifestyle business to thriving business. What's your biggest piece of advice that you would offer to the consultants listening to this podcast right now?

Claire: So when you're an HR consultant, you know all about HR, that's your comfort zone. Moving into being this business owner is a completely different set of skills and a lot of us just try and do it all and wing it and google it and just try and do it. But my main bit of advice would be to invest in specialist support when you need it. I got the marketing sorted with James. I got my HR business consultant specialist helping me, I've got a capsule CRM expert helping me, and I also got my accountant to do a half day training course on the accountancy package and they all cost money, but it's made my business so much better and that's obviously going to make me more money in the future. So invest in those foundations, pull in specialist knowledge where you need it, because you're not a specialist in these areas, they're all new to you and then get them to train you up so that then you can really grow your business on top of that firm foundation.

James: Yeah, I think it's about investing back into you and upskilling you as well, isn't it?

Claire: Yeah, exactly.

Claire: We've got to invest in the business, we've got to invest in ourselves because we are the business. We're taking on new things all the time. So, yeah, definitely. That would be my biggest life hack or business hack.

James: So you've been a member of the HR Marketing Box for a number of years now. How would you describe the service and how has the service helped you to achieve the success that you've had?

Claire: So, about three years ago, I started using the HR Marketing Box and up until then, my sort of LinkedIn Post had been quite ad hoc. I was struggling to think what to post, so I wasn't posting on there regularly. My website didn't have loads of interesting newsletters or guides or anything on there. So I obviously heard about what you offered and signed up to it. It's really reasonably priced. I'm not going to go into a sales pitch, but it saves you a lot of time and basically it provides you with a box of marketing tools for that month ahead. So it's a newsletter, a guide, loads of different posts. So enough stuff for you to post on LinkedIn every day, send stuff out to your mailing list, put stuff on your website and just be in people's minds every day. And you can do it all and schedule it. So it's not like you have to go on LinkedIn every day. You can use a scheduling function. So I just do it once a week and some people really, really change it loads. Or other people might just post out almost as it is. But you know, you put your own branding on it, your own colors, your own photos, you add your own bits and bobs into it and it goes out. So for me, it's really helped build my presence and my name on social media because lots of people say, oh, I've heard about you, or like, because I call it, what about Hr? W a t t, because that's my surname. So people go, I know who you are. I've heard seeing you on LinkedIn. So it's kind of just a way into a conversation. And when people and clients need HR, they might think, oh, I've seen all that stuff from Claire, they look good, we'll contact them. So for me, it's just a much easier way to get out my marketing materials quickly. And you can delegate branding it all to somebody like my daughter does mine on Canva and she loves doing it. She gets a bit of pocket money and then I've got my newsletter ready and I just have to review it and then send it out. So yeah, it's really, really helped me. I wouldn't be doing half as much marketing and I don't think bringing in half as much business without having all that marketing going on.

James: And that brings us to the end of this very special podcast episode. I'm really, really impressed with what Claire has achieved this year and just want to say a huge thank you to her for sharing her story and for telling us what she's done to grow her thriving consultancy. If you'd like to learn more about the strategies that Claire has implemented, as well as the HR service pyramid and the HR marketing box, or working with me on a one to one basis, like Claire has done over the years. Then please get in touch.