Commando Consulting, January 2012

11 Key Attributes Of "Respected Authority" Calibre Consultancies

By Tom "Bald Dog" Varjan, Organisational Provocateur

Synopsis

Be it recession or plain short-sightedness, many consulting firms consciously or subconsciously undermine their "respected authority" status and become replaceable vendors.

And then they are surprised that the market treats them accordingly, and real buyers refer them to purchasing agents.

In this issue we look at 11 factors that define whether your firm is a sought-after authority or a replaceable vendor.

Podcast: MP3 Version

Opening the new year, I think it's good to remind ourselves how we can maintain our firms' respected authority status, so we can avoid making mistakes that could turn our firms into replaceable vendors that sell their services through street peddlers, bazaar hucksters and circus barkers.

1: Your firm's inbound marketing is so strong that it doesn't have to rely on strong outbound selling.

So, what is the difference here?

When you have strong marketing, buyers who seek you out on their own volition, so you don't need salespeople. Yes, consultancies call them rainmakers, but really and truly, they are just glorified peddlers chasing after the market.

Good marketing also means that you don't need to maintain call centres in India or Zululand to constantly call each and every poor bastard in the Yellow Pages in order to twist his arms to buy your services.

As you can see in the figure below, inbound marketing positions your firm as a respected and sought-after authority, but hard selling positions your firm as a replaceable vendor. And that must be a rather crappy state of affairs no matter what the government says.

Using a dating analogy, high sales and low marketing is about chasing after girls and asking one after the other whether or not she wants to marry you.

As you can imagine, you will get a tonne of rejection before someone says "Yes". Now this is doable, but think about what kind of reputation you gain in the process. To say that you won't be popular is a gross understatement.

Yes, eventually you can pick up a girl, but rest assured that the smartest and the best-looking ones will run and hide from you.

Why?

Because of the approach.

Client acquisition is the same.

Ask the associates of firms that get their clients through outbound selling, and they will tell you that they merely tolerate most of their clients, downright hate a significant percentage and really enjoy working with only a very very few.

Nuff said.

2: Your firm's services demonstrably improve your clients' business.

This is a normal situation at firms that practise value-pricing and money-back guarantee, but that's the minority. Far too many consulting firms still sell billable hours, and then, after winning the deal on competitive hourly rates, they grossly overstaff their projects.

The mantra is: Lowball them today and snowball them tomorrow. That is, offer them seemingly good rates today, and tomorrow, after the service has been rendered, find a reason to charge a small fortune and ding them.

And those firms always know how to make juicy profits on their projects even though their rates are competitive.

What do they do?

They bloat their projects with freshly minted MBAs, and charge almost-partner rates to clients.

Or they charge both travel costs and full rates for travel, saying they work on the client's project en route to the client.

And in many case, these forms stay with hourly rates because their services are useless and produce no measurable difference to their clients.

3: Your client relationships are all about the value clients derive from your services.

Many firms are stuck in the "time plus materials" paradigm, valuing only the number of hours and the poundage of deliverables they create.

The problem is that they believe that value is an objective thing that can be cited by consultants. But value is subjective, and only clients can cite how much value they've received in certain services.

This is why buyers and sellers should establish the magnitude of exchangeable value - delivered by consultants and received by clients - right at the beginning of their engagements.

Every service is worth more before rendering than after rendering.

4: You cite fees if and only if you and the buyer have established objectives, metrics and value.

Many consulting firms cite their fees far too early. Pushing buyers to make up their minds, they don't discover the real scope of their projects and spit out fees far too early.

And since buyers know nothing else regarding the scope of the engagement or what value to expect to receive, they make their decisions based on price.

And then firms complain that their markets are price sensitive.

Well, of course they are.

Buyers are sensitive to what they know and ignorant of what they don't know. If consultants open their discussions with their fees, then fees will be the basis of their discussions, and all the other details will be mere garnish.

5: Your sales discussions are based on diagnosis not on dog and pony type sales presentations.

Consultants' buyers buy concepts not things. Sadly many consultants try to sell things.

For instance, you may sell cloud CRM, but your buyer wants to buy improved client retention through better communication between his salespeople and their clients. Yes, the tool is the CRM programme, but the buyer basically buys increased revenues and improved client retention.

And concepts like "improved client retention" can't be put into PowerPoint presentations and presented as if it were a can of beer or a container of face cream.

Besides, who present to buyers?

Vendors.

They present and - as they still teach in sales school, try to - close, close, close.

Peers don't present to each other. They compare notes and discuss possibilities, but don't do "used cars" selling.

6: He who sells the work leads the project team that does the work.

Consulting is all about intellectual firepower. Buyers don't hire you for your physical ability to do the work. Clients hire you because you know what to do in the first place.

Beyond that, it's perfectly all right to rely on the client's internal people to do the mundane manual labour work.

Actually, it's plain unethical not to involve them. After all, when the project is done and you're gone, they have to live with the end results. So, they'd better participate in creating it.

The whole idea is that you combine your process skills (leadership, team building, decision-making, strategy development, etc.) with the client's subject matter expertise, and jointly create the desired results.

And to do that, it's enough if your firm offers one main person for the project and one backup person.

Besides these two people, the client has to provide the manpower, including the project manager.

So, what is the role of the consultant? She is the advisor to the project leader. But as an outsider, she can't be the project leader herself.

7: Your buyers are true economic buyers with real business issues, not purchasing agents with over-scoped and underpriced RFPs.

With the help of good marketing, you can connect with real economic buyers. The problem is that many firms don't have the patience for marketing, and they want to get new clients right now. So, in the hope of quick projects, they land in bidding wars, and now the sales cycles starts stretching like phyllo pastry.

It's like planting the seed and commanding the soil to give you plentiful harvest within five minutes. Well, it doesn't work.

Nevertheless, respected expert type firms have the patience to build peer-level relationships with real buyers and avoid the eager grasps of procurement agents.

8: Projects must demonstrate improvements in the clients' condition in one, two or all three areas: 1) revenue increase, 2) cost reduction, 3) expenditure avoidance.

The way I see it, any kind of consulting intervention can be quantified, thus monetised. When contribution is measured, it can be better understood by buyers before projects commence.

Let's break from the idea that we sell specific features, like training courses, software programmes or similar things. They are commodities.

But when we sell ROI, then we can offer unique value to clients.

9: Consulting teams must consist of premium calibre subject matter experts with extensive business savvy.

I know it's become pretty common in recent years for consulting firms to take on projects and then subcontract big chunks of the work to China, India or even to Upper Volta in order to get the work done at slave's wages.

The minor fact that the quality of work will be substandard doesn't even seem to bother those firms. Clearly, the desire to make a buck far outweighs doing great work.

But clients are retaliating. They demand to know who exactly work on their projects. They want to see detailed profiles on each person who is involved in their projects in any way.

10: Your firm's associates participate in continuing professional development.

The sad reality is that when most people get out of school or university, they are done with acquiring new skills. They stop learning.

They stop learning because now there are clients to take care of, and there is no time for learning. Besides, learning is an unpaid activity, so when there is a choice between generating instant revenue and generating knowledge, instant revenue wins.

The funny thing is that generating knowledge would mean much more revenue down the road, but most consulting firms are short-term focused. They are obsessed with the quick buck.

But for consultants it's vital that they carry on sharpening their skills and stay up-to-date with industry-specific trends and changes.

11: Your market learns about your firm through its content-rich, education-based materials.

Many consulting firms make the mistake of chasing after their markets using idiotic sales pitches puked by so-called rainmakers, and whipped, threatened and cajoled by profit-hungry senior consultants and partners.

If your firm is a respected authority not just another vendor, then your market should learn about your firm through the high-quality, education-based content your people put out.

This content can be speeches, printed materials, audio and video.

This way, as buyers consume and digest your information, they come to their own conclusions that your firm is the wasp's nipples, the best thing since sacks of potatoes, so when these buyers are ready to make changes, they call you.

Summary

No, this is not an instant process, but what you achieve is that, instead of your going to buyers asking them for money, buyers come to you asking for your help.

Good warriors make the enemy come to them. Who comes to you has a force of emptiness, and you have a force of fullness. Attacking emptiness with fullness is always a great idea.

Long-term military records indicate that a modern army scores one enemy fatality for every 15,000 combat rounds expended by its infantry.

For snipers, the result one fatality for every 1.2 expended rounds.

That's a 12,500-fold improvement.

And the improvement doesn't come from doing the same thing harder and longer, but from using a different approach.

In the former case, the army, using lots of people, clashes with the enemy face-to-face.

In the latter case, snipers wait for the enemy to come to them.

Instead of chasing after buyers and asking for the sale, consulting firms should magnetise their operations such that buyers come to them on their own volition and ask for the purchase.

Yes, it may take a bit of time, but these projects are sweeter, sexier and carry higher fees than those projects that firms acquire through buyer-chasing.

So, think about how you'd like to acquire clients in 2012. Is it through chasing buyers or attracting buyers.

I know I vote for the latter. How about you?

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

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