Commando Consulting: December 2008 - Should Consulting Firms Outsource Their Own Marketing And Selling?

by Tom "Bald Dog" Varjan, Organisational Provocateur

Summary: Many years ago Peter Drucker wrote, "Because its purpose is to create a customer, the business has two - and only two - functions... Marketing (you get paid for creating a customer) and innovation (you get paid for creating a new dimension of performance). Marketing and innovation produce results, all the rest are costs". So, if marketing is such an important function, how come that so many consulting firms have decided to outsource it? This is what we discuss this month. Audio Version (MP3): 34:19

There has been a long-time debate about outsourcing marketing in consulting firms. It usually stems from the concept that consultants are very good at what they do, but have an adversarial relationship with the idea of marketing and selling themselves.

In July I attended a workshop with one of my marketing mentors, Robert Middleton of Action Plan Marketing, and he spent a significant part of the workshop on the "marketing mindset." It turns out, quite obviously, that when we acquire new knowledge, first we have to acquire the new mindset, then the new skill set and, finally, the new tool set.

What many consulting firms do is that they want to get the tool set right away because this is the shortest road to revenue-generation. It's also good because they don't have to invest their own time and money to learn marketing, so they can keep focusing on doing more billable work.

So, here comes the idea of outsourcing marketing. But is it smart in an industry where revenue generation depends on 1-to-1 peer-level relationships with buyers based on mutual trust and respect?

Senior partners in consulting firms mistakenly believe that if they farm out marketing, they free themselves up to doing more paid work. And no doubt, the paid work is there but the working conditions have changed pretty drastically. Not to mention the quality of the clients.

Yes, in a handful of cases firms need more clients, but what I've seen in far too many firms is that they need better clients. And while outsourcing marketing can create more clients, it certainly cannot create better clients.

When buyers are considering engaging the help of consultants, they have specific questions, and they expect to get answers to those answers to before they can make buying decisions.

Remember when we go to the doctor with our health problems, we want to see a health practitioner not a health administrator. Consulting is the same.

1. Prospects Want To Meet Experts Not Salespeople

Let's think here for a moment. When we have tooth problems, we want to talk to dentists. When we have legal problems, we want to talk to lawyers. When we have accounting problems, we want to talk to accountants.

We don't want to talk to dental assistants or receptionists, legal secretaries or salespeople of accounting firms.

And here we have to stop for a moment in case you think to yourself...

"Tom, you succulent slab of swine sweat. You keep telling me to be careful with my time and jump into the sales process only after prospects qualified themselves. What the cricket is this? Are you changing this concept?"

No, no, I'm not changing it. All I'm saying is that when we're sought out by people (we don't know yet if they are legitimate prospects), we guide them through our automated qualification/disqualification "obstacle courses".

However, the ones that come out at the other end of this obstacle course, thus qualified, deserve our attention.

Think about it. They went through the whole qualification process because they expect to meet the expert. At that point it would be unethical to say...

"Mr. Prospect. You've just qualified to meet a professional, but we are so busy that we've decided to send one of our salespeople to meet you, and he will relay your goals, issues and desires to us."

There is an interesting thing here. Thanks to the Internet, prospects are pretty well educated on the issues they're seeking help on. There is a good chance prospects know more about the topic in question than the salespeople they meet. So, meeting salespeople is really a waste of time. And since people don't want to waste their time, they skip meeting salespeople and go to the competition.

Realistically, it's a big mistake to sell consulting services the same way used cars are sold. I believe when consultants sit down with prospects, they shouldn't have an agenda of selling. Together they should diagnose prospects' situations and then allow prospects to decide what they want to do. This is how doctors "sell". They don't try to "close" the sale or manipulate patients to take the most expensive treatment.

Mind you, doctors are not on commission either. That's why I believe that no one in consulting firms should be on any kind of commission. (Since we're here, no one should be on hourly wage either. You either run a knowledge firm with salaried professionals or a manufacturing plant with manual labourers on hourly wages). The commission structure is unethical and promotes sort-term money-making even at the expense of the prospect.

Just think of car salespeople. You ask something and they have to go and ask their sales managers. They are really just abuse fodders protecting their managers from clients, because the real salesperson is the sales manager who is sitting in the background and whom buyers can't even meet, but they make all the key decisions.

When savvy buyers buy consulting services, first and foremost they buy into relationships with professionals they trust and respect. It is a huge mistake to start a new relationship by pitting this new buyer against a commissioned salesperson and then talking over the relationship once the salesperson has got it started. It's rather retarded for the consulting firm and is a waste of time for the buyer.

So, let's forget about it.

2. Prospects Want To Assess Chemistry With Consultants

Consulting is probably the most personal form of doing business. I almost used the word "intimate", but then I realised that hiring a hooker on company money is the real intimate relationship, although it's pretty impersonal. So, let's stay with the word "personal".

Whichever word we use, chemistry between buyers and consultants is vital.

And assessing this chemistry is rather complicated. In my opinion, only those people can assess chemistry who are not attached to certain outcomes. Salespeople have an inherent problem here. They have the agenda of closing the sale whatever it takes. And salespeople are not exactly famous for recommending prospects to find another consulting firm because they feel there is no chemistry.

As we know, bad clients drive out good ones.

Or in the words of the famous/notorious Axl Rose of Guns 'n Roses...

"Why let one bad apple spoil the whole damn bunch."

Bad clients can wreak serious havoc in any business, but in consulting firms that operate on quality of business not quantity, even one bad client can be lethal and can bring the firm to its knees.

And this is why it's important that it's the consultants who meet buyers not salespeople.

One more observation. Even consultants are reluctant to walk away from inappropriate buyers and opportunities. While they have financial interest in the success of their firms, many of them don't have the self-esteem to turn down inappropriate opportunities that could jeopardise the firm's long-term success.

Now, if they can't do it, how can they expect salespeople to do that? For salespeople every dead horse buyer is a great opportunity to make some money. And when salespeople bring in inappropriate clients, it's the consultants who have to suffer from working with these clients. By then salespeople are on the next prospect... often at another firm.

3. Prospects Expect To Have An Idea Of What It'll Cost

How do you feel when someone tells you...

"My service is $820 per hour and have no idea how long the work will take."

How would you feel upon hearing this? How much confidence would you give to that consultant?

Probably not much.

Any idiot can cite hourly rates, but the whole idea is that you're not commoditising yourself by charging hourly rates but operate based on value-pricing.

Also, if we don't know how long certain work takes, how can we expect clients to know it? For instance, since airline companies are in the flying business, they can give us an approximate arrival time. Imagine you want to buy an airline ticket and ask how long the journey is, and the ticket officer says...

"I have no idea how long it takes, but don't worry we'll bill you at our standard rate of $270 per hour, so you'll find out eventually. There might also be some delay, and we'll bill you for that too."

Not exactly comforting, is it?

We do what we do long enough, so we're expected to know roughly how long certain gigs take.

Now at the very beginning, without understanding buyers' situations, obviously we can't cite exact fees. What we can do, and what salespeople can't do for us, is that we can have diagnostic conversations, not a sales call, with buyers and establish the scope of the initiatives they have in mind, including the results they want to achieve, the metrics to track the change process and the value of our contribution.

When buyers see these numbers, they can tell us what sort of resources - money, people and time - they can mobilise to pull off the desired initiative. And at this moment we still don't have to tell buyers exact numbers.

Using airline language, buyers have just told us where they want to fly. But since in consulting every gig is a new destination, we need some time to calculate various investment options. Obviously, one option will be within buyers' budgets, but we can also create sexy options above and beyond the budgets buyers have given us.

And although we can't answer the question "How much will it cost?" at the moment of the meeting, we know how to handle the situation without scaring buyers off.

The problem is that commissioned salespeople want to close the sales far too quickly because otherwise they can't eat. They need the quick money, and as they try to "collect" using 1001 closing tricks, buyers smell the rat and often bugger off to the competition.

The other point is culture. Salespeople, who come and go at an annual rate of 43%, just don't have the same cultural identity as the consultants whose careers are tied up in their firms. For partners, a significant personal investment is tied up too.

4. Prospects Have Questions And Need Expert Answers Not Vague Guesses

Imagine that you set an appointment at an accounting firm in search of help to your most burning corporate accounting issues. You walk in, sit down and start the interaction with the person sitting with you.

You have tough questions but the consultant keeps dodging them and gives you vague, wishy-washy answers. The kind of answers you could get from the web upon a healthy Google search.

Then it turns out that the person who's answering your questions knows no more about accounting than you know about the sex life of Himalayan blue-bearded mountain goats. The guy is not an accountant but a commissioned salesman for the accounting firm.

His job is the "dirty, substandard grunt work" of bringing in business while the "true" professionals are doing important billable work in the office or kicking their heels around the water cooler.

On the website the firm talks about trust and respect, and that they are financial fiduciaries to their clients, but they start client relationships just like car dealerships: They send out industrial laypeople with an incentive to go for the quick sale. And then they're surprised that even if they can make the sale, there are never ending fee objections and other relationship-undermining issues.

My question is this: Is it the buyer or the seller who's started undermining the relationship? Obviously the seller.

5. Lack Of Time

Although another common excuse is lack of time, but it's really lack of organisation. There are so many aspects of marketing and sales that could be automated that lack of time should never be an excuse.

Of course, what comes to the equation is billable work. Marketing and selling are non-billable functions, but doing the work itself is billable work.

And the other problem is that for most consulting firms marketing and selling are about individually chasing prospects. Of course, that is very time-consuming. And since there is a high chance of getting rejected, no one wants to do it. Consultants have to protect their fragile egos from rejection...

"You can't reject my help. I have a Harvard MBA."

This is why consulting firms have come up with the "brilliant" idea of hiring business development folks to do the heavy lifting of acquiring clients.

So, what is the problem here? Partners didn't have time to do enough billable work because they had to do business development. Now, having salespeople on board, partners can do billable works all day.

No way, Jose!

Partners do some billable work and spend a huge amount of time to manage the business development people.

But since business development people are not full-fledge members of the firm, only situational mercenaries, logically, they do whatever is best for them. They feel no loyalty to the firm and no commitment for the firm's success. Because of this discrepancy, they need a hell of a lot of managing which, in turn, eats up a lot of partner time.

So, at the end of the day, partners don't have to do business development, yet they lose the extra time on herding cats, that is, managing and army of proverbial gunslingers.

So, the time is always available. It's just a matter of choosing to use it. I always suggest to clients that instead of hiring salespeople, they can hire talented junior folks to do time-consuming donkey work, and senior staff have more time for business development.

However, the best bet is to set up engagements that clients' staff members do the donkey work and the consultant is a facilitator of change not the person who does the heavy lifting.

6. Belief In Self Has Huge Selling Power

The problem is that for many consultants marketing and selling are subhuman functions, and they are not willing to lower their "professional standards" to such pedestrian activities as marketing and selling.

And even if they are willing to do it, they are not willing to invest the time to learn how to do it correctly. They tend to believe that marketing and selling are inherent skills and anyone who is willing to do it actually can do it.

And when it comes to learning something new, people make a pig's ear of the sequence of what to learn.

Whatever we learn, first we have to acquire a new mindset, then a new skill set and finally a new tool set. That's why military training doesn't start with handing out the machine guns, bullets and grenades.

Look at the letters "a", "f", "t" and "r". You can make several words using these letters but they all mean different things.

• Fart


• Traf (TRAF is a member of the TNF Receptor Associated Factor family of proteins, a special kind of protein specific to mammals)


• Frat (short for fraternity)


• Raft

If a raft maker looks at these letters, he will see "raft". But if a genetics scientist looks at them, she's likely to see "TRAF".

So, we must find the right order of learning, so that besides learning we also retain the learnt material and apply it in the right context.

And the very first stage of learning is learning a new mindset. A mindset that says that...

Marketing is a process of demonstrating how you can improve your prospects condition by doing business together.

Selling is a process of deciding whether or not there is a mutually beneficial basis for a buyer and a seller to enter into a value exchange agreement. The buyer willingly purchases some bits and bobs from the seller, which improves his condition. The buyer receives great value and the seller is properly compensated.

The problem is that in many consultants' minds selling is all about manipulating buyers to buy something because it's good for the seller but may not make a dickybird of a difference to the buyer. Sellers are scared of buyer's remorse.

This is why many consultants hate selling but they know they need revenue. So, they abdicate selling to commissioned salespeople who are not 100% true members of the consulting firm.

On Summary

Who are the most suitable professionals to bring in new business in any consulting?

Obviously the senior consultants who have the most vested interest in the firm's success. Also, only they can engage in peer-to-peer relationship-building.

Consultants complain that, instead of meeting real buyers, they keep hitting the impenetrable brick wall of purchasing and procurement departments.

We must remember that creating these peddler fodders was a reaction to the relentless attack of peddlers hired by consulting firms where partners were too lazy and or incompetent to bring in new business.

And the sooner partners and senior consultants start doing what they should be doing, without relegating it to a dedicated sales force, the sooner they can break through the those peddler fodders and start doing business as real fiduciaries not as fungible vendors and supplicants.

"Dynamic Duo" Mentor Programme... ...has 2 openings for February and 4 for March 2010. Click here to continue to the fiendish details.

Recommended Reading

The Essential Guide to Managing Talent: How Top Companies Recruit, Train & Retain the Best Employees

by Kaye Thorne and Andy Pellant

I've always thought there was something inherently fishy with traditional recruiting practices, and this book proves it beyond the shadow of a doubt. While leaders and managers shout that people are their companies' most important assets, attracting and retaining top-tier talents is one of their most neglected, back burner issues, usually relegated to a low-level department that is permanently locked out of the boardroom and treated by executives as a necessary evil: Human Resources.

Even in the age of the knowledge worker, HR departments are still treating recruitment as acquiring manual labourers with impressive resumes. We all know the dreaded resume-performance gap, when people with impressive degrees and resumes have to be laid off because they can't perform in the real world.

And here lies the difference. HR doesn't recruit people for real work. HR recruits people with impressive credentials who unquestionably accept and are willing to conform to organisational dogma, regardless of how stupid it is.

In this book, the authors present a new perspective on regarding, attracting and nurturing top-tier talents. Among others...

• What exactly is talent?


• The difference between human resources management and talent management


• The difference between manual labourers and knowledge workers


• Creating an Employee Value Proposition


• From recruiting hype to build a long term recruiting strategy


• How to reform an olod-fashioned HR department


• Why talents hate HR and what to do about it - Why HR is regarded as a bunch of bureaucrats administering efficiency, uniformity and conformity


• How HR actually repels the best and brightest candidates

What consulting firms need is a new breed of HR professionals that understand knowledge workers and how to attract and retain the real best and brightest not merely the ones with the most attractive credentials. Real talents don't care much about veneer because they are too busy to learn and grow. By forcing them into writing resumes and sitting through idiotic job interviews, consulting firms automatically deselect the most suitable candidates.

Place your order with Amazon.com for The Essential Guide to Managing Talent. You'll be glad you did.