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Management
Consulting News
Interviews with consulting leaders,
articles, research results, job data,
and news. This month:
» Interview:
Steven Farber, author of The Radical
Edge.
»
Articles: a different
look at "gurus" by Alan
Weiss, handling crucial conversations,
how to craft a winning marketing letter,
how to build trust among project team
members, and on where to find the best US beaches.
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The
Guerrilla Consultant –
a newsletter dedicated to applying the principles
of Guerrilla Marketing to the work and lives of
consultants.
Castles
of Sand
In my home state, we just wrapped up voting in
statewide and local elections. In the last couple
of weeks, my mailbox, phone, and the airwaves
have been inundated with pleas from incumbent
politicians and wannabes for my vote.
In
most political races, incumbents enjoy an enviable
competitive advantage over newcomers. For consultants,
the power of the incumbent service provider can
also make it tough—but not impossible—for
others to get in the door.
This
month we’ll discuss what works, and what
doesn’t, when selling against a strong incumbent
consultant.
Enjoy
the article, and let
me know what you think.
Mike
McLaughlin
Co-Author, Guerrilla Marketing for Consultants
Unseating
an Incumbent
“Nearly
85% of the firm’s 100 largest clients have
been Accenture clients for 10 years or more.”
Wall Street Journal, June 5, 2006.
Many
consultants sigh in quiet desperation when they
learn they’re competing for work against
an entrenched, incumbent consulting firm. After
all, they reason, the incumbent enjoys every conceivable
advantage, including relationships with client
decision makers, a track record of success, and
knowledge of the client’s business environment.
It’s
tempting, though mistaken, to conclude that the
incumbent is a slam dunk to win the work. Savvy
competitors know that guerrilla marketing techniques,
executed flawlessly, can create a competitive
edge in the race for a new client.
Ask—Why
You?
It’s
true that some clients make decisions on which
consultants they’ll hire before the selection
process begins. In such cases, a client may create
the illusion of a competitive selection process
to obtain multiple proposals—and fee estimates—to
keep the incumbent consultant honest, or to satisfy
internal procurement policies.
Of
course, you can’t expect a client to reveal
that the process is rigged for another consultant,
at least not explicitly. So you must dig for the
answers to two questions before launching headlong
into the sales process:
- What
do you know about our firm?
- Why
did you put us on your list of consultants to
help you?
Sales
experts implore us to focus on the client’s
needs, not ours, as we proceed through the sales
cycle, and I agree with that advice. But when
battling a strong incumbent, begin the sales qualification
process by testing what the client knows about
you and discerning the client’s intent.
If the client answers the above two questions
with a clueless stare and lots of “ums”
and “uhs,” you may be grist for the
competitive mill.
Don’t
expect a client to recite, chapter and verse,
your firm’s qualifications, but listen for
a compelling reason why you’ve been invited
to the party.
Get
Beyond Familiar Themes
|
“... a client may create the illusion
of a competitive selection process to obtain
multiple proposals—and fee estimates—to
keep the incumbent consultant honest, or to
satisfy internal procurement policies.” |
When
pursuing new client work, too many consultants
reflexively create a strategy that relies on familiar
themes: the strength of the firm, the expertise
of the team, access to “best practices,”
and past experience. Certainly, these are important
parts of the consultant’s service offer,
but relying solely on this strategy will likely
result in another victory for the incumbent.
Your
prospective client’s attention will perk
up once you’ve demonstrated—beyond
a doubt—that your team has created stellar
results on similar projects in the client’s
industry. It’s helpful to have a past client
stand up and endorse your work, as long as that
experience connects strongly with the new client’s
perception of what is needed for the current project.
A
challenger must be creative to get a leg up on
an incumbent consultant. So think beyond the usual
claims to come up with compelling reasons the
client should leave the comfort zone an incumbent
provides.
Ignorance
Can Be Bliss
Every
consulting project impacts one or more groups
of people—customers, employees, shareholders,
competitors, or suppliers. Recognize this and
find ways to tap those sources of knowledge.
Before
you submit a proposal, use your resources to identify
those who are closest to the problem and engage
them in discussions. That will provide an opportunity
for you to understand, from a different angle,
the real problem. Often, such conversations expose
faulty assumptions about the nature of the problem,
its impact, and approaches to solving it.
Here’s
your chance to turn the old saying, “knowledge
is power” upside down. As the challenger,
you are not expected to be in the know like the
incumbent is, which frees you to start at square
one, ask dumb questions, and try out radical what
if’s. It’s not always a bad thing
to be blissfully ignorant—as long as you
learn fast.
The
information you gain will give you more ammunition
to create project-specific differentiators, not
just generic marketing messages. Many incumbent
consultants fail to gain this perspective, relying
instead on their existing knowledge and the assertions
of client sponsors.
You
Get What You Pay For
|
“Research shows that many clients are
willing to switch professional service providers
with the slightest provocation.” |
For
some consultants the “win” strategy
is to arrange for the client to experience firsthand
how the consultant works with clients. It’s
not unusual for a consultant to offer to complete
a small project for little or no fee to demonstrate
worthiness. This idea, though attractive on paper,
often backfires in practice.
The
freebie project usually suffers from the “you
get what you pay for” syndrome. Most clients
recognize the “free” project for what
it is—a poorly disguised sales technique.
Consultants often achieve little buy-in from clients
for freebies, particularly when client resources
are needed to help with an assignment.
On
one occasion, a client sponsoring executive slid
a competing consultant’s report across the
table to me. The report was the result of a free
study that consultant had conducted in an attempt
to win some work.
As
I leafed through the report, I was impressed with
its quality, depth, and conclusions. But the client
disagreed and said that the free project lacked
the rigor the client expected in a paid consulting
project. Even high quality work couldn’t
overcome the “you get what you pay for”
perspective.
The
freebie’s ugly cousin is the equally disastrous
“discounted fee” project. To overcome
an incumbent’s position, the consultant
offers to complete a short, well-defined project
for a reduced fee. Once the introductory project
is completed, the consultant’s fees are
theoretically raised to a profitable level.
This
approach is akin to a retailer’s traditional
loss-leader strategy. The problem with this approach
is that even if you win, which is far from certain,
you can be stuck with a long-term loss. Once you’ve
set a low baseline on fees, you shouldn’t
be surprised to encounter stiff resistance to
raising rates to higher levels.
No-fee
and low-fee projects are desperate ploys that
devalue your expertise and don’t necessarily
result in ousting an incumbent. As always, there
are exceptions to every rule, but relying on fee
gimmicks to win new work is a sure-fire loser.
If you feel compelled to make such an offer, cross
your fingers and hope the client refuses to accept
it.
The
incumbent consultant’s advantage is often
a castle of sand. Research shows that many clients
are willing to switch professional service providers
with the slightest provocation. So approach a
competitive situation against an entrenched incumbent
with tenacity, creativity, and insight. Leave
the tricky fee arrangements back at the office.
You’ll win more and earn more in
the end.
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