Commando Consulting, August 2011

How Perfect Clients Can Elevate Your Consulting Firm's Success

By Tom "Bald Dog" Varjan, Organisational Provocateur

Synopsis

New client acquisition should be a top priority for all consulting firms, but it seems many firms accept clients solely on a monetary basis. That is every client with a budget and heartbeat is a good client.

And when their projects go sour, those consulting firms get haunted by the spectres of their bad clients for years to come. And this haunting can seriously undermine their brands, reputation and long-term prosperity.

But consulting firms can take proactive steps to protect themselves, and attract only those consulting clients that are great to work with and are willing to put in the work to achieve their desired results.

Podcast: MP3 Version

It was May 2010, and the popular programme, "Britain's Got Talent" had reached its semi-finals. A duo called Othelio was getting ready for its performance.

Then all of a sudden the duo was dropped because the organisers had learnt that one half of the duo, Deborah Stephens happened to be the wife of a guy at the time when he was convicted for murder in 1992.

Upon seeing Deborah in the show, relatives of the victims went berserk and demanded her immediate removal.

We all know what masses are like besides behaving in stupid ways? They find a tiny spark and try to burn down the whole city. The crowd demanded Deborah's head on a silver platter.

And to preserve the show's earning potential, even at the expense of its integrity, organisers were politically correct (well, hell, coward basically) enough to keep the peace and drop Othelio from the show.

Apparently Deborah was criminally innocent but was guilty by association. And her relationship to a murderer was haunting her 18 years later.

The other great example is the German composer Richard Wagner. Many people regard him as a fascist because he was Hitler's favourite composer. It seems those people overlook the trivial fact that Wagner had died (1883) six years before Hitler was born (1889).

But try to change the view of the masses! Good luck. It's like steering a glacier.

And the same thing is happening in consulting. One bad client can haunt you forever.

But we also have to make a difference here.

When good consultants realise they have bad clients, they fire them. It's happened to me, to you and most other consultants.

But sometimes consultants join the game, or in the case of Enron, Arthur Andersen was perfecting the game for Enron.

Unbeknownst to them, consultants can bring out either the best or the worst in clients. And here is an interesting observation I've made over the years.

Money makes people more of who they really are.

As you help your clients, and client companies are basically collections of people, they become more successful. As a result, arsehole clients become bigger arseholes. And appreciative clients become even more appreciative.

According to a 2009 study by the Professional Services Journal and The Shattuck Group, professional services firms' top three priorities are 1) acquiring new clients (77.3%), 2) retaining existing clients (70.6%) and 3) generating sales leads (66.5%).

But since in consulting firms, the chemistry between the client's people and the consulting firm's people is the most important factor in project success, consulting firms have to choose their clients very carefully.

The Art And Science Of Client Attraction

Consulting is the ultimate trust-based business. Regardless of how tight the match between your services and your buyer's requirements, without mutual trust and respect, all that is as useful as a barber shop on the steps of the guillotine.

The other reason why high level of mutual trust is required is because consultants work with their clients in close collaboration to achieve specific outcomes.

Let's look at an electrician and a consultant.

For a start, an electrician calls a project a job. A consultant calls a project an engagement.

From this difference alone we can guess the difference in the nature of buyer-seller relationships.

An electrician quotes prices for specific tasks to solve an acute problem. A consultant proposes changes that make long-lasting improvements in the client's condition.

When you hire an electrician, you tell him what you want, get out of the way and let him do the work. You want him to install some new wires, but you're not part of the installation process.

But when you engage (the best consultants can't be hired) a consultant, that's when you get deeply involved in the issue and start working on it with your full might shoulder-to-shoulder with the consultant.

While an electrician can give you what you want without your active participation in the installation process, a consultant can't. Instead, he can empower and enable you through changed circumstances to get it for yourself.

A plumber can do a great job even for an obnoxious, belligerent bastard, but a consultant with such a client is doomed.

The area where consultants, especially the large contract labour behemoths, commoditise their services is that they do installations instead of implementations. They don't mind having labour-intensive projects because they have tonnes of freshly minted MBAs falling out of the rafters being bored out of their skulls.

But for boutique consultancies with lean and mean headcount, the key is to reduce labour intensity to the bare minimum, so the available few consultants can be engaged in as many projects as they can, while being able to maintain high (as jointly defined by client and consultant) project quality.

So How To Attract Perfect Clients

Besides establishing a clear Perfect Client profile, there are certain marketing tactics that attract Perfect Client calibre prospects and marketing tactics that attract all Tom, Dick and Harry from the masses.

But let's stop for a moment. According to RainToday, 50.8% of professionals firms don't have Perfect Client Profiles, and accept anyone as a client with a "double P" qualification: Purse with money and a pulse indicating the presence of carbon-based, bi-pedal ape-descendants.

But this very vague qualification is often the hotbed of all sorts of trouble down the road.

Perfect clients are basically clients whom your firm has a natural affinity to collaborate with. There is a strong match in values, character between your offers and their requirements.

What do you fiddle with if you want to attract different things? The things you want to attract or the magnet itself. It's a lot easier to adjust the magnet, although it takes some serious work.

And what can you adjust in your firm?

• Your firm's overall character and identity


• Your value proposition


• Your process of delivering services


• Move your marketing from intrusion-based push marketing to thought leadership-based pull marketing


• Intra- and interoffice communication

How To Identify "Perfect Client" Materials?

• Your services can make a significant, both quantitative and qualitative, impact on their businesses


• They are ready, willing and able to pay your fees and invest in their futures


• They operate in the black, making a profit, and you can make a healthy profit by helping them to get even more profitable


• There's a tight match between your firm's services and the client's requirements


• They're decisive in nature (One of Napoleon Hill's success principles from Think And Grow Rich)


• There is a close match in between your firm's values and business philosophy and your clients'


• There is healthy collaboration between your people and the client's people


• They are willing to engage with your people in discussions to discover whether or not there is a mutually beneficial basis for working together


• If they like what they see, they're ready, willing and able to make payment and start the engagement


• Instead of tasks and activities, they talk about expected results and the changes they want to see in their organisations


• Instead of your fees that they have to pay, they talk about the value they will get. Once they see value, they can activate the budget


• They treat you with respect. They most definitely don't answer their phones or pagers during conversations. In my experience, real decision-makers keep their mobile devices out of sight. Only bad-mannered, low-level, self-important flunkies brandish their devices


• They arrive at appointments on time, don't keep you waiting and promptly respond to all forms of communication


• They represent businesses with value and cultures that are in alignment with your values


• Knowing their ranks in their organisations' pecking order, they can live up to the accountability that comes with their positions


• They are client-focused. They have quality of service and client relationships in the centre of their attention


• They are sophisticated at using external professionals. They never say to you, "Ok hotshot. What can you do FOR us?"


• They answer your questions honestly even on sensitive issues. They know that if someone, they have the answers


• They can make decisions to hire you and initiate projects without "discussing it with partners" or "running it by legal"


• They treat you as a true collaborator as opposed to as an extra pair of hands for hire

All in all, they are players.

So, How To Reach Out To Perfect Client Materials?

The chart below represents a 2010 joint study by RainToday, Professional Services Journal and the Shattuck Groups, based on the responses of 351 firm leaders, has identified the most effective client acquisition tactics to acquire perfect clients.

Email marketing can include electronic newsletters, mass opt-in emails, email based announcements, sponsorships and 3rd party activities.

Thought leadership can include research, content creation in articles, white papers, audio and video, book publishing.

Public speaking can include conferences, seminars, workshops, radio and TV shows.

Search engine marketing can include SEO and PPC.

Webinars can include both internally produced shows and webinars through third party organisers, like a sponsoring companies or professional associations.

So, Is It Worth Bothering With Perfect Clients In New Client Acquisition?

First, let's take a quick look at the...

Negative Client Impact

Gross revenue is unpredictable because while there is always plenty of work, the cheques far too often are "in the mail", so your payment is either delayed or non-existent.

Net margins suffer because clients keep expanding the scope of the project but are not willing to pay more.

The overall growth of the firm comes to a grinding halt because your people now carry the dead weight of a less-than-perfect clients.

Loyalty suffers in two ways. Less-than-perfect clients are not loyal to anyone, and working with those clients raises questions in associates about their loyalties to the firm.

Job satisfaction vanishes which further contributes to diminishing loyalty. Associates know they have to perform the proverbial latrine duty, so the partners and executives at the top can get their hefty bonuses.

Everyone's commitment level suffers because the project has become a drag. Instead of completing the project with great success, everyone tries to "get it out of the way" and move on as quickly as possible.

Frustrated associates end up acting out their frustration on perfect clients, subconsciously ruining the overall client experience.

And now let's see the...

Positive Client Impact

The impact points are the same as with negative impacts.

Gross revenue becomes predictable and consistent. It means the firm has "forecastable" income which makes the firm a real, valuable, thus sellable, business entity.

Instead of saying, "the cheque is in the mail", perfect clients actually pay.

Net margins soar because less effort (time, money and resources) is exerted to deliver the contracted value.

The firm's growth becomes predictable because firm leaders can project how much effort each project is likely to take.

Loyalty improves because perfect clients are loyal. Associates' loyalty also improves because now they can work with great clients on sexy, exciting projects.

The firm develops the proverbial halo around it that magnetically attracts perfect clients and top-tier talents.

Overall morale improves, increasing people's self-esteem, thus indirectly increasing the firm's attraction ability. And this has a very positive impact on the firm's consulting fees.

On Summary

In the early 90s, when I was living in the UK, I was dating a woman called Irene. I had never seen her smoke, so I assumed that she was a non-smoker. One evening, about five months in our relationship, after dinner, she went out to the balcony and started rolling a fag.

I asked her incredulously if she was actually a smoker.

And she said she smoked a one fag after breakfast and one after dinner, but only if she had her favourite Turkish tobacco and a very specific make of paper. She wouldn't smoke anything else.

It turned out that she hadn't had a smoke for over 11 months because she had been unable to get her favourite paper. It turned out that the paper was available only in the form of ready-made cigarettes, but she smoked only hand-rolled fags. She would not touch ready-made fags, let alone smoking them.

Her perfect cigarette was the Turkish tobacco hand-rolled in that specific paper. And it must have been hand-rolled only by her no one else.

Picky? Yes. But she was a pleasure smoker, not an addicted smoker. She smoked for joy not for relieving stress. The way I see it, chocoholics (addicts) stuff their faces with trucks of Mars Bars or similar cheap rubbish, but chocolate aficionados revel in squares of Scharffen Berger after dinner.

And I dare to say that the Scharffen Berger eaters get more enjoyment out of the experience.

And I think this is the difference between working with perfect clients and working with anyone with a pulse and purse.

Working with perfect clients is all about enjoying the project and the company of people with whom we work on the project.

But working with any client is just a mad dash for a few more pennies. A form of addiction, just like guzzling down buckets of Mars Bars until the first signs of diarrhoea raises its ugly head.

I believe in earning good money just as much as you do. I also believe in enjoying the process of earning that money.

I've got just over 70 years left on this planet, and I would like to spend them with people whose company I like being in.

How about you?

Come and let's discuss this newsletter issue on my blog...

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