MARKETING CONSULTANCY

A simple distinction between marketing and selling consultancy services is that in selling you have a specific client in view; by contrast, marketing is to a specific sector - that is, many prospective clients. Note that I have taken a limited definition of marketing as essentially the promotion of a consultancy firm and its services. Marketing purists would no doubt argue for a broader definition, emphasizing the need for the business to be marketing oriented. Consultancy, however, is by nature a peculiarly market oriented business. Most people of any seniority in a firm - if not most consultants - have daily contact with their customers; few businesses outside the professions can boast as much contact. Moreover, every professional is called on to promote, if not sell, his or her firm's services, which again requires a strong market orientation.

The aim of marketing is to:

• generate a demand for and raise awareness of a consultancy product;

• help to generate or identify good prospects;

• position the practice as a provider of (the defined) consultancy services.

Marketing in a consultancy business therefore consists largely of promotional activities. There are, of course, professional restrictions on the methods by which consultants may promote themselves. For example, the Institute of Management Consultancy has laid down general guidelines for its members, but does not forbid cold calling, provided the guidelines are followed. Other professional institutes may, however, have more severe restrictions on promotional activities, which should of course be observed by their members.

Marketing Objectives

There are five criteria that have to be satisfied before a client will open a dialogue on working together with a consultant. They are:

1. The client has to recognize that a problem exists.

2. The client must believe that the problem is sufficiently important to merit attention.

3. The client must believe that the problem can be resolved.

4. The client must decide that outside help is required to resolve the problem.

5. The client must decide that your practice is worth considering for this work.

(There will be further hurdles for the consultancy to surmount before receiving an invitation to tender, which must be dealt with as part of the sales process.)

The objectives of marketing should be to help to see that these five main criteria are satisfied. The consultancy that is attempting to market a new service may have to start at stage 1. At the other extreme, stages 1 to 4 may have been completed by the client without any prompting from a consultancy practice; it merely remains for the client to select a consultancy to work on the project.

Set out below are the activities you can undertake that will help to satisfy these criteria:

• The client has to recognize that a problem exists. To go to a client with the offer of a service to solve a problem that it does not recognize as such stands as much chance of success as a plumber who wants to repair your central heating when nothing is wrong. Clients recognize problems when:

  • there is a problem or opportunity where previously none was thought to exist. Often these arise from change in the environment. For example, concern with corporate social responsibility; business process outsourcing; managing diversity; and knowledge management all represent features that have changed in the environment, which have led to consultancy opportunities. The job of the marketing consultant in these circumstances is to draw the attention of the client to the problem.

  • the problem is generally recognized, but the client did not know it occurred in his or her organization. This is when data feedback is often used by consultants - for example, a general survey of some feature of a business sector so that clients can compare the performance of their own organization with those of others. Examples are myriad in personnel matters (pay, benefits, labour, turnover, etc) where there are hosts of surveys to which client organizations can subscribe.

• The client has to believe that the problem is important. Organizations are rife with problems. Many of the problems are liveable with or they eventually go away. No organization can afford to be problem free - there is a point of diminishing returns below which it is not worth tackling a problem. The way the consultancy markets in this respect is to show how the prospective returns are higher than the client originally thought.

  Sometimes consultancies undertake a free survey to see whether the problem merits attention and, if so, what the likely return will be. For example, a consultancy that specializes in managing utility consumption (electricity, water, etc) might see whether any worthwhile reduction in consumption could be achieved by using their own special techniques.

• The client must believe that the problem can be resolved. There is the apocryphal story of the dictator who had two trays on his desk, one marked 'problems that time alone will solve', the other marked 'problems that time alone has solved'. It is hard to imagine such a non-interventionist dictator! In organizations, most people have plenty to do so do not want to waste their time attempting to resolve insoluble problems.

  The task in marketing consultancy here is confidence building. If someone comes to you and says, 'I have a piece of kit that, attached to your car, will double your mileage per gallon of petrol', you might be sceptical. If you were to be assured by other users whose opinions you trusted that this was the case, then you might buy the kit. A reputation for success helps enormously.

• The client must want outside help. Much though it might go against the consultant's grain, organizations can solve their problems for themselves. Sometimes the competition for a consultant lies with the client's own staff rather than another consultancy. Figure 3.3 sets out some benefits of each.

  Benefits of outside consultants	Benefits of internal staff
  Objective Provide an additional resource Experienced at dealing with this type of project Can change consultant personnel if client not satisfied	Know the internal politics Have to be paid anyhow Experienced at dealing with this organization High incentive to please this client (employer!)

  
  Figure 3.3: Relative benefits of using outside consultants and internal staff

Of course, these are not exclusive benefits. A consultancy may know a long-established client very well; alternatively, an internal member of staff may be very expert at dealing with the type of problem to be resolved. The job of consultants in marketing themselves at this point is to show how well equipped they are to address this type of problem, which is the purpose of promotional material.

• The client must seek your help. Clients will seek your help only if they know it is available. The purpose of marketing activity is to maintain awareness of your services among key people through promotional activities.

Who to Market to

Research has shown that consultants get only 10–20 per cent of their work through sales promotion; the remainder comes from past clients and referrals. Promotion is vital, however, as a flow of new clients is required to maintain a consultancy business, let alone grow it. This is because there is usually some client loss - a client may go out of business, or choose to use a competitor, or may even have no problems left you can help with! So sales promotion is directed at prospective users of a consultancy's services.

Referrals - introductions and leads - come from connectors. Some professions are very accustomed to using connectors - for example, accountants cultivate bankers to get introductions to the bankers' clients, and there can be a flow in the other direction. Connectors for consultants depend on the nature of the specialization. Typically, referrals come from:

• existing or past clients;

• personal contacts;

• other consultancies (where not in competition);

• professional associations;

• other professional advisers.

In marketing to these, a consultancy aims to create a network. A strong network is necessary for all consultancies, whether a sole practitioner or a firm of more than a thousand professionals. Often, newcomers to consultancy underestimate the value of a good network. Junior consultants forget that they should cultivate their own networks as much as their more senior colleagues. In particular, they are well-positioned to identify and network with 'rising stars' in the client organizations with which they have worked.

Some two-thirds or more of a consultancy's business comes directly from past clients, and so they are obvious targets for receiving promotional material for new services. The advantages for a client in using the same consultancy for more than one assignment are that:

• they will have established an effective modus operandi for working together;

• the client will be confident in the consultancy;

• the consultancy will have learned about the client and the client's business.

Sometimes these factors will outweigh other considerations; once (when working as a sole practitioner), a client said to me of a new piece of work he asked me to do, 'I realize that this is not at the centre of your expertise, but I think you can do a good job for us. You know us and we know you, which is far more important.' (Which is also very gratifying, provided you can do the job!) So, existing clients should be a fruitful source of new business, by selling them additional services.

In large consultancies this presents a further need for marketing; no single individual can be in contact with all clients and know all the consultancy's services. There will be consultants who have account management responsibilities who themselves are specialists. They need to be informed of the other services the consultancy has on offer, and so the process of internal marketing has to be conducted in large practices. Account managers are internal connectors to the consultancy's clients, and so the provider of a specialist skill needs to promote it to these connectors as much as externally. Indeed, some commentators have estimated that in a large consultancy as much effort goes into internal marketing as external.

There remains the question of who to target as new clients. A useful technique here is to profile existing purchasers of your services and identify other organizations that have similar characteristics. These might be defined in terms of size, business sector, current circumstances or predicaments and so on. You then need to find a point of entry to the new prospective client. Again, you need to know who the typical purchasers of your services might be and then direct your promotional activities towards them. This is not necessarily a sure-fire method, however. Some years ago, a colleague remarked that she had been in contact with a target client organization and been told that there was no need for our services. In fact, our firm was already working extensively with this client! Two lessons emerge: 1) 'No' is not necessarily a final answer; 2) make sure you organize your selling so that you are not wasting promotional effort trying to win current clients!