Selling consulting services is about creating relationships. No one sells to GE or IBM or Ford, but rather we sell to people within those organizations. Those potential buyers have titles such as director of development, chief operating officer, division general manager, vice president of sales, chief financial officer, and so on. Within education, the buyers are people in positions such as school superintendent, principal, director of curriculum development, and supervisor of counseling. Even in small businesses, the buyers are readily identifiable: owner, principal, managing partner, executive director. In nonprofits, the buyer is usually the executive director or chair of the board.
Consultants must build relationships, not make sales calls. Think about it: Do you really enjoy listening to those people reading scripts over the phone in an attempt to persuade you to change your long distance provider or cable source? Well, no one buys consulting services through those techniques, either. (A woman recently berated me because she did make a cold call telephone appointment and sale. You can also find $1,000 on the sidewalk, I imagine, or hit the number 24 in roulette with a $10,000 bet. But do you really want to base your living and future on those odds?)
Here are the six key principles for acquiring business right from the outset in the consulting profession. If you ignore them, you will have to be extraordinarily lucky to be successful in this business. If you heed them, you will accelerate your ability to obtain new clients. As researchers say, you'll be within the feasible set.
Principle 1 Acquiring consulting clients is totally dependent on building solid relationships, not making sales.
Principle 2 Relationships are always built with specific people, not with organizations or legal entities.
Principle 3 The best way to build relationships is by placing yourself in the buyer's shoes and thinking from the outside in.
Principle 4 The buyer doesn't care how good you are; the buyer only cares what's in it for the buyer, so you must focus on business outcomes, not methodology.
Principle 5 Trust is the key to strong and healthy relationships, and trust is the honest-to-goodness belief that the other person has your best interests in mind.
Principle 6 Providing value early is the key to trust and engagement.
These six principles are discussed in detail throughout the business acquisition process described in this chapter. But trust me—put these principles up on the wall over your desk, write them in your daily calendar, ask your spouse to test you on them daily. If you adhere to them, you will be head and shoulders above most people who attempt to enter the consulting business. Kennedy Information, publisher of Consultant's News and a resource for statistics on the profession, estimates that there are in excess of 500,000 consultants working in the United States at the moment. And I estimate that most of them—two-thirds of them—are not making even $100,000 a year from consulting work, and will not be in the profession for longer than two years at a time.
There is only one potential buyer who matters. I often call this individual the true buyer or the economic buyer. This buyer is the person who can write a check for your services.
I presented earlier in the book three questions to determine marketing scope:
What is the value-added that you bring to clients?
Who is likely to write a check for that value?
How do you reach that person?
The economic buyer is the person identified in the second question. He has a budget, does not need approval from anyone else to spend it, can obtain additional funding if necessary, and can sign a check (or cause the computer to disgorge a check). Here are the criteria to determine if you are interacting with an economic buyer. Note the following critical considerations:
The economic buyer is not always identifiable by dint of hierarchical title. Although the CEO of DuPont is an economic buyer, the chances are remote that you will interact with that person. Major organizations may have hundreds of economic buyers for consulting services.
It is self-defeating and futile to attempt to develop long-term relationships with noneconomic buyers, no matter how friendly, promising, or likable they may be. This is one of the toughest lessons for new consultants to learn.
With very rare exception, the buyer is virtually never in the human resources or training department, or derivations thereof. Occasionally, the executive vice president of that operation may be a buyer, but these are usually clearinghouses for line needs, and view resources as commodities and suppliers as vendors. You're better off being in Siberia than in HR, because you can leave from Siberia.
Questions to Ask to Identify a True Economic Buyer
Whose budget will support this initiative?
Whose operation is most affected by the outcomes?
Who should set the specific objectives for this project?
Who will be evaluated for the results of this work?
Who is the most important sponsor?
Who has the most at stake in regard to credibility?
Who determined that you should be moving in this direction?
Whose support is most vital to success?
To whom will people look to determine whether this project is real, and not just an empty gesture to achieve a short-term goal?
To whom do you turn for approval on options?
Who, at the end of the day, will make the final decision?
If you and I reach agreement today, can we shake hands and begin tomorrow?
This last question I call the handshake test. If someone says, "Yes, we can shake hands and begin, and the paperwork can all follow in due course," then you probably have a buyer. But if the individual says, "Well, there are others who must be involved and approvals to get," then you're dealing with an intermediary or gatekeeper. (Don't forget that an oral approval is a contract.)
You don't have to ask all of these questions, and a police interrogation under a bare lightbulb is usually not necessary. Just a few of these questions and the handshake test will tell you if you're talking to a true buyer or not. Bear in mind that titles are deceptive. My main buyer within Merck & Co. was a man with the title "manager of international management development," and within Hewlett-Packard was a woman with the title "director of knowledge management." Some vice presidents are not economic buyers (particularly in banks, where everyone is a vice president), and some managers are economic buyers (particularly in flat organizations where titles aren't important).
There are other people we meet in attempting to acquire new business, but they are only gatekeepers or feasibility buyers if they do not meet the criteria just given. Note that committees are always gatekeepers. Committees virtually never have the characteristics we're seeking in our questions. A committee serves as a screening and recommending body to someone who really does have a budget and really can sign a check. Committees don't sign checks (though someone within the committee might be a hidden economic buyer).
Warning: This seems simple to comprehend but it's difficult to put into practice. I'm constantly dealing with even veteran consultants who swear up and down that they are dealing with a buyer but their project is held up because the buyer is awaiting clearance on funds. Whoever is clearing those funds is the buyer!
Gatekeepers can be wonderful people. They see their job, however, as shielding the buyer, and your job is to get to the buyer. No gatekeeper, no matter how sincere and reliable, will ever promote you, represent you, or advance your cause as sincerely, passionately, and skillfully as you can. It's a mistake to expect it, a blunder to allow it, and a waste of time to think anything will come of it.
There are three tactics to employ when you find yourself dealing with gatekeepers. These people may be anyone from an administrative assistant, to a training director, to a vice president of human resources. Again, titles don't matter; buying ability does. (In general, as stated earlier, human resources and training functions are almost always gatekeepers, virtually never real buyers.)[36]
- Tactic 1
Use rational self-interest to gain access to the economic buyer. Convince the gatekeeper that it's unfair of you to allow the gatekeeper toserve as your marketer, and that the two of you should devise a plan to approach the true buyer. You may do this in tandem, or the gatekeeper may simply set up a meeting for you. Assure the gatekeeper that you'll look forward to collaborating with her on the project itself, and that you'll continue to work closely with her. However, you should be the one taking the risks and making the case for the project at the moment.
This approach, using a partnership but insisting on contact with the real buyer, is accepted about 40 percent of the time.
- Tactic 2
Use guile, or artistry, to reach the buyer. Tell the gatekeeper that, as much as you enjoy the relationship with him, you must, ethically, meet with the true buyer. You have to be certain that the buyer is not expecting things that you can't deliver, and that the buyer is clear on the degree of support, sponsorship, and resource commitment required internally. While you trust the gatekeeper, no one can actually speak for what's on the buyer's mind, and it's imperative to have a face-to-face conversation and relationship.
This approach, resorting to your policy on the matter, is accepted about 40 percent of the time when the first tactic doesn't work.
- Tactic 3
Sometimes you have to apply brute force. That means that the gatekeeper is intransigent and does not respond to either of the first two tactics, and you will be wasting your time if you continue to pursue things at the gatekeeper's level. In this case, simply contact the buyer by voice mail or e-mail or fax, inform the buyer that you'd love to send a proposal on this project for which you are ideally suited, but you've been unable to make contact with him. Invite the buyer to contact you if a meeting is at all possible. This will undoubtedly ruin your relationship with the gatekeeper, but that doesn't matter, since you're not going to get the business anyway at this rate, and the gatekeeper can't sign a check in any case.
This approach, a last resort, usually works about 10 percent of the time when the first two fail.
You should always apply the tactics in the order suggested. If Tactic 3 doesn't work, then move on. A chronic mistake that new consultants make is that they tend to hang on to low-level relationships in the hope of somehow getting a recommendation or even actual business. This just compounds the loss of time and money. If you can't forge a relationship with an economic buyer, you are not going to acquire new business. Move on.
Here's something of a case study in finding the economic buyer. I was asked by an event planner at the Bank of America if I'd consider submitting materials to be considered for a presentation at the meeting of the relationship managers of the Private Clients Group. I said I would, but then the conversation went this way:
- ME
May I ask a question? Whose meeting is this?
- HER
The executive vice president of the Private Clients Group holds this meeting every year for all her management team.
- ME
How might I meet her?
- HER
Why would you want to do that? No one else has made that request. Her schedule is incredibly tight.
- ME
I understand, but it's important to determine whether or not she and I will view this presentation in the same way, how I can tie my talk into her general theme, and what she would like to accomplish. I think you can see that I can do a much better job of meeting her objectives if I can talk to her, even briefly.
- HER
I can probably get you 20 minutes on her schedule if you come to Boston.
- ME
Deal! I can guarantee it will be worth it.
I met with the buyer for that 20 minutes (while her three subordinates in the room said absolutely nothing and stared straight ahead). We hit it off, I found out what she wanted to accomplish, I gave her some choices, and she hired me on the spot, without asking about fees. She said to her people in the room, "Work out the details with Alan." I eventually obtained $125,000 in consulting work and $40,000 in speaking assignments within the organization. The buyer eventually left to become CEO of another firm, and I've gone on to work for her in that company.
Most of the people you initially meet will be gatekeepers. They are paid to do a certain job, and that's fine. But your job is to get to the decision maker and check writer, and that's more than fine; it's mandatory if you want to succeed, let alone thrive, in the consulting profession.
Before moving on, let's be absolutely clear on what a relationship with an economic buyer actually constitutes. By relationship I don't mean playing golf, going to lunch, sharing secrets, or exchanging pictures of children. The relationship is usually better, in fact, if it's not social at all. In my terms, the relationship has these attributes:
Honesty and candor. You and the buyer feel comfortable disagreeing.
Peer-level perception. You are seen as an equal and colleague of the buyer, not as a salesperson, vendor, or supplier. You are not in attendance with your hat in your hand, a sycophant begging for business. You are a peer who is jointly evaluating, with the buyer, whether a business relationship will be mutually beneficial.
Patience to develop. Sometimes you can hit it off immediately; sometimes you need months before the relationship is solid.
Respect. Although you may not be best buddies and may even agree to disagree, you respect what the buyer's value and intent are, and the buyer respects your approach to business and your professionalism.
The aforementioned trust. If I trust you, I'll accept even adverse feedback, because it's in my perceived best interest to do so. If I don't trust you, I won't even accept praise and accolade, because I perceive that you have your own agenda.
The ability to develop relationships with economic buyers is the single most important factor in launching and perpetuating a consulting practice.
In Figure 6.1 we can see that finding the right buyer, establishing shared values (for example, you can't do a downsizing project if you don't believe in downsizing, and you shouldn't take on a project to "increase morale while we reduce benefits" unless you really believe in the premise), and developing relationships are the starting points for business success.
We're now ready to move to the heart of the process, which is what I call conceptual agreement. Conceptual agreement means that you and the buyer agree on three basic issues:
What are the objectives to be achieved through this project?
How will we measure progress and success?
What is the value or impact to the organization?
Consultants often talk of scope creep, which means that they began a project with the rough understanding that they would improve the performance evaluation process, and suddenly find themselves on a scaffold painting the outside of the building. The client kept asking for more and more, and the consultant didn't know how to say no.
The objectives constitute the framework within which the project proceeds. They should always be stated in terms of business outcomes, not methodology or interventions. In other words, a training program, focus group, survey, and coaching are only techniques, not ends in themselves. Moreover, focus groups, as an example, are simply a commodity that can be purchased, meaning the buyer will tend to be very price conscious. The results of the focus groups, however—improved cross-functional collaboration and faster customer response time—are significant business outcomes that can justify substantial investment in light of that return.
Some examples of interventions or inputs turned into business results or outputs:
input | Output |
|---|---|
Conduct surveys. | Improve employee morale. |
Conduct focus groups. | Design product around customer needs. |
Create sales training program. | Improve rate of business acquisition. |
Observe the interviewing process. | Reduce attrition among new hires. |
Facilitate executive retreat. | Create strategy to guide business. |
Redesign performance evaluation. | Reward performance fairly, accurately. |
Establishing objectives is the starting point of any consulting project. It's impossible to do anything else until and unless you know the desired ending point. Here are some questions to elicit outcome-based business objectives. You can carry these around in your notebook and readily refer to them to prompt your buyer in the right direction. You don't need to ask them all, but different variations might work in differing circumstances.
New Premise: Scope Seep Scope creep seems to blind consultants to a far more insidious phenomenon, which I call scope seep. This occurs when you, not the client, allow extra tasks to insinuate themselves into the project. This is mostly a result of the client's poor self-esteem, feeling that more and more has to be offered to justify the fee. (That's a quick way to go broke. Hewlett-Packard used to call these "undocumented promises" made by lower-level people who were afraid of jeopardizing multimillion dollar contracts, so they kept offering to do additional work that wasn't originally requested.)
Focusing on the business outcomes will also discourage scope seep since you're not obsessed with the dreaded deliverables that warm the cockles of human resource hearts.
Questions to Develop Outcome-Based Business Objectives
How would conditions ideally improve as a result of this project?
Ideally, what would you like to accomplish?
What would be the difference in the organization if we were successful?
How would your customer (the buyer's customer) be better served?
What is the impact you seek on return on investment/equity/sales/assets?
What is the impact you seek on shareholder value?
What is the market share/profitability/productivity improvement expected?
How will you (the buyer) be evaluated in terms of the results of this project?
How would your boss recognize the improvement?
How would employees notice the difference?
What precise aspects are most troubling to you? (What keeps you up at night?)
What are the three top priorities to be accomplished?
In establishing conceptual agreement about objectives you are ensuring the following:
The client is not expecting anything that you cannot deliver.
The client is not expecting anything that is unreasonable under the circumstances and within that culture and environment.
There will be no misunderstandings later about why additional work wasn't performed.
The client is maximizing your contribution and talents so that the project is maximally effective for the client and maximally lucrative for you.
If you begin with carefully constructed objectives, you create a playing field or a framework within which the project can be launched, can progress, and eventually end. The time to do that is right at the outset, before any proposals or agreements.
Some objectives are readily quantifiable; for example: percentages of sales increase, number of new employees, reduction in expenses, faster response time. Some, however, are qualitative, not quantitative; for example: improved teamwork, increased aesthetics, greater comfort, reduced stress. In either case, we need measures in place that assure us—and can be used to resolve client unease—that the intervention is, in fact, making progress toward the objectives (and inform us when the objectives have, in fact, been achieved and it's time to go home).
Thus, the second step in conceptual agreement is establishing measures of success. Here are some questions to assist you.
Questions to Develop Measures of Success
How will you (the buyer) know we've accomplished the objective?
Who will be accountable for determining progress, and how will they do it?
What information would we need from customers, and in what form?
What information would we need from vendors, and in what form?
What information would we need from employees, and in what form?
How would your boss be convinced that we've met this objective?
How will the environment or culture be improved?
What will be the impact on return on investment/equity/sales/assets?
How will we determine attrition/morale/safety/retention?
How frequently do we need to assess progress, and how?
What is acceptable improvement, and what is ideal improvement?
How will you be able to prove to others that the objective has been met?
Once again, asking all the questions might be overkill, but being prepared to ask several is simply prudent and professional. Sometimes, the prospect will not have any measures in mind, in which case you can suggest what they ought to be (thereby providing both value to the client and the measures of your own eventual success). Sometimes the prospect will have measures in place already (for example, sales reports, response time indexes) and you'll want to be sure that they are functioning well and apply to your project.
Most consultants fail ever to gain agreement on the value of the project. Yet this is a keystone of the sequence. Only by obtaining the buyer's assessment of the value to the organization of the objectives being met can you generate:
Leverage to guarantee the buyer's continuing sponsorship.
The commitment of organizational resources.
The proper priority among other client activities.
Justification for your fee.
Bypassing purchasing departments and other bureaucracy.
The buyer's continuing clout to overcome resistance and inertia.
You've already established the outcomes desired and how progress toward them will be measured. Now it's time to discuss what the impact will be, while you have the proper momentum created with the buyer. These three questions, comprising conceptual agreement, are in this order for that purpose.
Once again, this is a process through which the buyer can be guided.
Questions to Establish Value
What would be the impact or result if you (the buyer) did nothing at all?
What would happen if this project failed?
What does this mean to you, personally?
What is the difference for the organization/customers/employees?
How will this affect performance and productivity?
How will this affect profitability/market share/competitive advantage?
What is this currently costing you annually, and what might you save or gain?
What is the impact on return on investment/equity/sales/assets?
See Figure 6.2. We've now gained conceptual agreement, the heart of our process, by gaining agreement on objectives, measures of success, and value to the organization.
We continue with our business process in the next chapter. Let's conclude this one by focusing on the subtle ways to make progress with a prospect, from initial contact, through first meeting, through relationship building, through conceptual agreement.
One of the most important things I ever learned when managing sales forces was that life is about a series of small closes. I call them small yeses. By that I mean that virtually no one is going to buy a car, purchase a home, or undertake a consulting project on first contact. While there is the one-in-a-million rash and impulsive buyer at these levels, we need to deal with the other 999,999. Thus, the need for small yeses.
This can be called a consistency approach, in that you are gaining consistent agreement to proceed, making the overall project unavoidable. Here's a sequence:
Do you believe in the development of our people?
Would you agree that they're our external best practices that can enhance their performance?
Is it probable that they are not normally or naturally exposed to those external practices?
Would you, therefore, be amenable to discussing how we can provide them rapidly and effectively?
As you can see, every answer is an unavoidable "yes" in most instances.
Never attempt to sell a project, service, product, or approach over the phone. What is reasonable for the small yes? An initial meeting is the reasonable and modest yes that we need. What's reasonable at that meeting? Some agreements on basic values, the beginnings of a relationship, and the willingness to meet again on more substantive issues. At that meeting, the conceptual agreement might be appropriate, followed by agreement to entertain a proposal.
Consultants who talk to someone on the phone and offer to send a proposal are wasting their time. Not only is the potential for business a long shot, but even worse is the fact that if they got lucky and received the business, it would not be optimal for the client or for the consultant.
Bear in mind that life is a series of small yeses, occasionally punctuated by a roaring, yelling acceptance. But it's the small, constant, consistent yeses that put business into the pipeline and provide for a strong stream of business year after year.
The progression usually looks like this:
Initial contact through lead, referral, or serendipity.
Yes desired: Hear some background, read some material, agree to second contact.
Second contact, after material or information is exchanged.
Yes desired: Agree to a brief meeting.
Brief meeting.
Yes desired: Form a relationship, agree on second, substantive meeting.
Second meeting.
Yes desired: Conceptual agreement, willingness to entertain a proposal.
Proposal.
Yes desired: Acceptance and project initiation.
You may be able to shortcut my five steps, or you might find that you become involved in steps 2a, 2b, and so on. I've completed this process at times within a week and at other times over a year. The key is that you realize that you have a template to use a methodical, systematic sequence to follow, and a royal road, if you will, toward a comprehensive proposal with a high chance of acceptance.
I submit far fewer proposals than most consultants, but I connect on upward of 80 percent of them (and some Mentor Program members are documenting above 90 percent) because I already have conceptual agreement with the client. That's what I mean by a more patient, systematic approach actually being more efficient and productive than trying to accomplish too much too soon with too little agreement.
One of the ways to accelerate your way through the process—to increase the velocity of the small yeses—is to provide value to the prospect early and often. In other words, you want the buyer to think, "If I'm getting this much value from this consultant already, what would I get if I hired him and had the benefit of this relationship on a regular basis?"
Some consultants feel they should share virtually nothing unless they are paid for it. I don't agree at all. I think we should provide value immediately, for free, so that the prospect comes to value our relationship and is readily disposed to formalize it.
Techniques to Use to Provide Value Early in the Relationship
Provide experiences similar to the buyer's from elsewhere.
Offer suggestions (not solutions) from experience, reading, research.
Refer books, articles, Internet sites of relevance.
Provide a contact or reference who has experienced similar issues.
Provide a concise description of what you've heard, with analysis.[37]
Ask questions to help clarify the issues and problems.
Provide reactions to what the buyer is already doing well.
A British visitor to the court of the sultan, at the height of the Ottoman Empire, was amazed to see a line of petitioners waiting patiently to have their cases heard personally by the sultan himself. When the visitor asked why the sultan bothered spending his time this way, an aide explained, "Most men are satisfied merely by having their stories heard."
Allow your prospect to tell his or her story. It will help both of you immeasurably.
I discuss fees and proposals in the next chapters. But remember that before establishing any fee, you must:
Determine who the economic buyer is and how to reach that person.
Develop a trusting relationship with the economic buyer.
Establish outcome-based business objectives.
Establish measures of success.
Establish the value or impact for the organization of the project.
Final thought: Be patient with prospects and follow a methodical sequence that will lead to a client relationship. No one pays you for speed, and once you've lost prospects, they're usually gone for good.[38]
Q. Don't some real buyers still have to abide by company policy and go through purchasing or a similar unit?
A. No. A true buyer can circumvent policy to achieve results. It's true that many won't have budgeted funds for your project, which is a surprise opportunity, but they can move the money from somewhere else. Buyers tell purchasing what to do, not vice versa.
Q. What about when you are dealing with RFPs (Requests for Proposals)? They always go to committees.
A. The best way to deal with RFPs is to become a sole-source provider, meaning the project doesn't have to go out for competitive bid because you have unique capabilities (a book, travel, industry experience, and so on). Low-level people review RFPs and make their recommendations, but there is nonetheless a buyer somewhere. And be aware that even the federal government (through the Farr Act) permits RFP decisions to be based on highest value, not lowest price.
Q. Won't the gatekeepers undermine the eventual project if I run around them?
A. That's a common fear and fallacy. No lower-level people try to derail a project initiated by a true buyer. Au contraire, they break their legs trying to board the bandwagon. They want to be seen as supporters, not resistance.
Q. Might you starve to death if it takes months to forge the right relationships before trying to create a proposal for a given buyer?
A. Yes, if that were your sole prospect. That's the reason you need a lot of prospects at varying stages of relationship building, so that some of them are constantly reaching fruition in the proposal stage. One of the stupidest questions I receive is, "What happens if I get too much business?" I tell that person to call me when they have that problem. They never do.
Q. What if the buyer asks you to work with his direct reports to put together a proposal? How do I avoid being delegated downward?
A. Simple. Say the following, "I'm happy to do that, and let's pick a date to debrief together, since I regularly hear things doing that which are contrary to what you will have told me, and we need to iron those discrepancies out between ourselves before proceeding." This will always bring you back to the buyer.
[36] An interesting aspect to dealing with economic buyers is that they are decisive and professional, return their phone calls, and will candidly tell you yes or no. A commentary on gatekeepers, and this is especially true of the human resources function, is that they will not return phone calls, will play political games, and don't always tell you the truth. This is still another reason to seek out real buyers and not waste valuable time on gatekeepers.
[37] I once listened to a buyer for 45 minutes while occasionally offering a summary or paraphrase, after which he told me, "You're the first consultant to sit in my office who really understands my business."
[38] See Appendix I for 101 Questions to ask throughout all aspects of the sales sequence.