In a nutshell: Selling by optimizing funnel economics works when selling into B2C and lower-end B2B markets with very large numbers of prospects. In contrast, clients buy consulting and professional services on relationships, referrals, and reputation – three things earned over the long-term by doing great work and by adding value (even when you are not in an engagement).
How Clients Buy: A Practical Guide to Business Development for Consulting and Professional Services by Tom McMakin & Doug Fletcher
Seven Elements of How Clients Buy
- Prospective clients become aware of your existence. (need)
- They come to understand what you do and how you are unique. (need)
- They develop an interest in you and your firm. (need)
- They respect your work and are filled with confidence that you can help. (need)
- They trust you, confident you will have their best interests at heart. (need)
- They have the ability to pull the trigger, meaning they are in a position to corral the money and organizational support needed to buy from you. (authority + budget)
- They are ready to do something. (timing)
Keys to Success as a Consultant = Grinder + Minder + Finder
- Grinder: Do good work
- Minder: Keep the organization and the projects headed in the right direction and moving at the right speed
- Finder: Focus on business development by identifying a (niche) community and serving it over time, esp. by:
- Being active in the community (geographical and/or topical)
- Producing valuable content (articles, podcasts, books, newsletters, etc.)
- Speaking at companies & conferences
- Attending conferences (Instead of wasting time & money on sponsorship, set up 1:1 meetings in advance of the event.)
- Staying in touch with (current and past) clients over the long-term; being helpful even when you are not under contract, for example by sharing something interesting/relevant that you have come across. “I tell them one thing they don’t know about their competitors, one thing they don’t know about their own company and one thing they don’t know about us. I don’t want to just ask for information when I visit them. I want to bring them information.” Make introductions. Visit with them when you are in town.
- Introducing yourself to others by asking for advice. After you speak, ask them to refer you to others whom you should be talking to.
- Hosting live (or virtual) best practices summits
More Wisdom
- Expert services are provided to a network of people who you get to know over a lifetime. There is no one too high or too low to speak with if your goal is to build a network over a lifetime.
- “Give value first, build and support the network, and the rest will follow.” – Dominic Barton, McKinsey
- Consulting and professional services firms are hired as trusted advisors to solve problems based on relationships, referrals, and reputation
- Buyers of professional services are skeptical of when expertise is packaged as “new offering.”
- Clients must believe the expert will
- Diagnose their problem correctly
- Prescribe an effective solution
- Do the work in a way that will achieve the outcome they want
- Fairly price the service based on work actually done.
- One favorite trick of management consultants is to ask, “What are you doing on the data visualization front?” knowing full well that you are doing nothing, or better yet, have no idea what they are talking about. Your failure to have a cogent answer to their question allows them to do a gap analysis. “Why don’t you fill out this questionnaire?” they ask. Then your answers magically metastasize into a project proposal.
- Make friends on engagements when you are young because the people you get to know at client companies will grow up and be decision makers. Stay in touch.
- “I would also agree to give speeches to anyone who wanted me to speak, but I had a rule that I had to meet the CEO before the speech and afterward to understand the context of what was going on and to follow up.” – Dominic Barton, McKinsey
- The key to cold calling is to find something in common with the other person.
- Shrink the pond – The first thing in selling consulting services is to create a point of differentiation. But not to be so different that people don’t understand what you do. Better to be a big fish in a small pond than a small fish in an endless ocean of near competitors.
- Elevator pitch
- Whom you serve
- How you help your clients
- Statement of your point of difference
- A “we-can-do-anything” approach is weak.
- Your services must promise to have a significant positive impact on [their] goals.
- Never mistake lack of interest with readiness. If someone is not interested in your service, you should leave them alone. If they are not ready, you should stay in touch.
- Two types of trust
- Respect: Credibility that you will get the job done. This is based on competency and judged on:
- “Tell me about your experience doing digital transformations for other companies.”
- “Have you ever worked with a company of our size?”
- “Will you be working on the project, or will it be a more junior person?”
- “What kind of return on investment can we expect?”
- “Do you have case studies?”
- “May I speak with references?”
- Benevolence: You are honest and have my back.
- Respect: Credibility that you will get the job done. This is based on competency and judged on:
- The scales tip in your direction when a prospective client:
- Believes you can add significant value to their projects
- Believes that the economic, strategic, political, and emotional benefits of what you do outweigh the financial, career, emotional, and time investments and risks
- Believes you can actually do what you say you can do Believes that your team is the best option among other choices
- Over and over you hear about the need to be clear about impact. What difference did you make for clients? Hard figures always outweigh soft contribution statements.
- A strong (pitch) deck includes the following four elements:
- A statement of capabilities.
- Case studies. This is where you draw from your library of experiences
- A credibility page.
- Contact information.
- Bios always include the same elements:
- What is your education?
- What is your title?
- What is your specialty?
- Seven proven trust – builders
- Time: Trust is built up one successful transaction at a time.
- Friends of Friends: New business for consulting and professional services firms comes from three places — repeat projects with existing customers, people who recommend you, and new clients with whom you have no relationship at all.
- Working Shoulder – to – Shoulder
- Doing the Right Thing
- Screwing Up: Promptly and without equivocation accept full and complete responsibility.
- Good Intentions
- Face Time
- Ruthlessly prequalifying leads before deciding to engage with them goes completely against the idea that you should invest in your network over a lifetime and believe in a kind of karmic business model — where what you harvest is a direct function of what you sow. Prequalifying companies and executives with anything other than a very wide screen is a miscalculation.
- I always underestimated was how if you hire a consultant, it’s a career risk.
- ROI is a misleading calculation. Better is to ask, “what’s the rate of return?” adding the element of time.
- Just because you are in a hurry to engage with a client doesn’t mean they are ready. Be patient. No one ever needs a consultant until they do – Clients need advisers when they encounter an unforeseen crisis or opportunity.
- Business development is a process. The most successful rainmakers make business development a consistent priority, it is part of every work week (and every work day), and their success is the proof of this commitment
- You have to have thick skin because you’re going get a heck of a lot of “no’s” or “not interested,” and you can’t take them personally.
- We typically look to people that are at best two or three degrees separated from ourselves. This is one of the reasons why global service firms spend considerable sums of money on networks of offices around the world. But local can also mean more than just geography. Increasingly, global connectivity allows virtual communities of interest to spring up despite physical separation.
- A life worth living is one that sits at the intersection of wrestling with a difficult problem, using your best talents, and doing work that is consequential.