Posts filed under Consulting

So You Want To Become a Consultant? Join the Crowd

Having practiced as an independent direct marketing consultant for about 15 years now, I receive a number of requests from employed and unemployed professionals of all sorts if I would share my advice for becoming a successful consultant.

Some want to know if they can make enough money to make it worth their while. Others exude confidence in their professional expertise believing that companies will come knocking at their door for help.

Usually, most people who are used to getting that twice a month check have no clue.

But I understand their desire for independence and breaking the stranglehold their employers have over their lives. Freedom offers an almost irresistible attraction.

To be honest, I have come to believe that the security offered by full time employment is elusive at best.

You have read the headlines. CEO tenures have dropped steadily for years to an average of around than three years and CMOs to an even lower level. Some of my peers and I have lasted for as little as six months or less in organizations that merge, sell themselves to the highest bidder or simply demonstrate little regard for their employees financial or emotional welfare.

Let’s be clear, working for the other guy promises fewer rewards and stability than our parents enjoyed. In the not too distant past, employers respected and appreciated great work. Jobs offered real stability. But no more.

In the process, employers lost seasoned employees and show a willingness to hire expertise on a contract basis.

Hence consulting and other skilled contract labor has grown at a prodigious rate. In one article from Assessment.com, a MAPP publication says this about the growth of independents.

Bill Sweney of Resource Associates Corporation recently stated "...someone who works outside the company would do 50 percent of all jobs performed. In the U.S., this contingent workforce consists of approximately 45 million, which includes, temporaries, self-employed, part-timers, or consultants. This number has grown 57% since 1980."

In my response to an inquiry from my blog, a customer service veteran with 10 years of experience asked for input on her money making potential as an independent consultant. 

Such individuals can earn quite a bit as a consultant. But it's a rough ride finding clients who will hire you for more than just miscellaneous projects. Monthly fee accounts are the way to go, but hard for clients to justify. Getting the work is the hard part.

Here is my answer to her question.

You should address this issue before you leap into the high risk profession of independent consulting.

  1. Why would someone hire me on a part time basis instead of giving the work to an internal employee?

  2. How should I describe my services? Be focused. Customer service is far too broad. What problems do you solve for a client? Give a case study or two of problems you solved and the results of your work.

  3. Learn how to price your services.

  4. Become an expert networker. For example, leverage LinkedIn to the hilt. You will have to sell what you offer. Plan on spending 3 days a month or about a day a week on the phone and in person building networks and meeting with people. Your sales activity never ends.

Enhance your marketing to include a self-modifying website (as opposed to static) and do some decent SEO on it.

Ask for invitations to speak. Consider writing a blog that demonstrates your capabilities and positions you as a master at solving the types of client problems your clients are experiencing.

Expose yourself to potential clients any way you can.

The work is fun, but for most consultants, the marketing is the tough part. It's like trying to get a new job on a continuing basis. So be sure you are ready to put in the effort.

May I ask you, dear reader, what advice you would share with individuals who aspire to become successful consultants?

Posted on April 9, 2011 and filed under Consulting.

The one sales killer question -- "What is Your Budget?"

 

If there is one sales issue that stumps most individuals responsible for new business, it is the prospect who presents an ill defined problem and has little or no budget. But how does the salesperson expose the lack of budget before expending the energy and expense of preparing a complex proposal?

In a recent newsletter issue published by raintoday.com, contributing editor Jill Konrath wrote an interesting article entitled The One Question that Can Kill Any Sales Conversation that addresses this very point.

She relates a story of a salesperson who piqued her interest to the point that she agreed to proceed with the project only to have the salesperson kill the sale with the budget question.

 "...I also need to get my blog social-media friendly. I don't have anyone working on that right now. It's a small project, but a necessary one. Interested?

Of course, she was. She asked, 'What's your budget for this?'

That's exactly what traditional sales training tells you to ask. To find out if you're dealing with a qualified buyer, you're supposed make sure they have money in their budget for your service.

It was the wrong question to ask!"

Why is qualifying the prospect for budget so important?

As with any resource, sales people have limited time and money to do their jobs. And one way to guarantee missed sales goals is to waste those limited resources on unqualified prospects who have neither the money nor the authority to sign off on the proposed project.

The prospect, on the other hand, has no idea what the solution costs and wants to know this to see if is is even feasible.

For most high level sales executives, prospect budgets must be determined before preparing a proposal that takes many hours and often significant expense to prepare.

In many cases, the available budget -- or at least a gross range budget range -- will make the problem unsolvable based on the sales person's experience. Why waste the prospect's time or the salesperson's time when no sale is possible?

The client wants the specifications for the solution to his broad (and usually poorly defined) problem without investing in the skills and time to prepare it. And the service provider needs confirmation of the prospect's ability and willingness to pay before investing in the development of the proposal.

As a consultant, I have no problem discussing HOW I would approach the project and allocate time/costs for each step. But I cannot lay out the specifications for solving the problem without charging for my time.

To a greater or lesser degree, some companies will let you know what it costs to solve a well defined problem. But if the prospect has an itch with no idea how to solve it, then he must pay for help in defining both the problem and again for developing potential solutions. Implementation costs are then possible once the specifications are developed.

So the question remains. How can the prospect and the service provider come to terms on this issue? How can sales people qualify the prospect without spending too much time educating them when they will never buy?

More to the point, do you agree with Jill Konrath's article when she says the budget question before the solution is presented kills the sale?

Posted on July 2, 2010 and filed under Consulting, New Business.

Consultant Credibility

After nearly 16 years of off and on consulting, the requirements for having fun and making a little money in the process revolves around one's credibility as a consultant.

Some of you who are new to consulting should understand that successful consultants know how to build trust very quickly. Though obviously not always successful, what helps me in this process is a trance like attention to the client. I try to see the fever behind their need and how they like to work.

This refocus on the client instead of myself really helps to bring down the sometimes destructive excess of energy and tension in the initial conversations.

Great consultants just seem to exude competence.

They do it in the way they express themselves and listen. But above all, competence is reflected by the easy manner in which such consultants readily admit that they do not have the answers to everything related to their field of expertise.

Clients still want competence. But they cannot stand feigned infallibility.

Such a demeanor from a consultant screams, "I really don't know what I am doing!"

Be confident in your skills, admit to what you don't yet know, and remain at ease. Clients know you don't know it all and want you to show your human side along with your expertise. What they want is your judgement based on a thorough review of their situation.

If all they need is knowledge, then they could do a web search to find it. Consultants take their encyclopedic experiences and apply them to the client's problem with judgement and objectivity.

These days I try to jump to the client's problem beginning with the first meeting if at all possible. Demonstrating capabilities using stories and tying them to the client's need informally works best during your initial conversations.

Don't get in the way of the client who really wants to move on to their problem. The client is usually ready for this more quickly than most consultants realize.

Remember. It's all about the client, not the consultant.

What tools do you use to build your competency in the eyes of your clients? And if you are a client, what advice could you give us so we can become more effective as consultants?

Posted on October 16, 2009 and filed under Consulting.

Think Big when Testing

There are numerous articles related to testing. So why publish yet another list?

For one, this list disagrees on some points made by other marketers. The other relates to the length of the list.

The shorter the list, the easier it is to remember and apply.

When discussing testing with one of my respected fellow direct marketers, I mentioned that companies really hire direct marketing consultants to advise them of what to test. Experienced direct marketers should know that time, money and resources to test and analyze results are always limited. In this context, consultants should know what testing scenarios are most likely to succeed.

In my opinion, here are the primary objectives of direct response testing.

  1. Improve results - beat existing controls that consistently yield the allowable cost per sale or cost per lead.

  2. Scalability - make sure that successful tests deliver significant rollout potential in order to maximize revenue.

  3. Breadth - test broadly to uncover breakthrough opportunities as quickly as possible.

  4. Media synergies - test media combinations that lift response to penetrate target markets more cost effectively.

  5. Quantifiable results - make sure your test quantities provide enough quantity to analyze the backend results reliably.

The area that breeds significant conflict for professional direct marketers is "testing broadly".

My take is that marketers need to concentrate on the big things rather than small incremental improvements that rarely beat existing controls. The differences are often less than 5-10% in lift. 

Focus rather on breakthrough opportunities that beat controls by at least 20-50%. Doing so still isolates small incremental lifts as a by product.

In large programs, it is a waste of time trying to figure out if that 4 page letter outputs a 2 page letter. Or adding a lift note increases response by 5% or even 10%. These mini steps take too long. The market will change during the one to two year period it takes to test all of these things.

Think big and resist the temptation to over think the small stuff. Small yields small results. Big, on the other hand, brings business changing new opportunities.

Posted on September 30, 2009 and filed under Consulting, Direct Marketing Strategy.

What Qualities Do Consultants Look For When Working with New Clients?

At the onset, let me say that I do intend to address what clients look for when working with consultants. But since a lot of writing already exists on this subject, this article deals with what a professional marketing consultant looks when seeking new client relationships.

The client qualities consultants look for probably resemble those characteristics employees seek from their employers. 

1. Loyalty

The most important characteristic consultants look for with their clients is loyalty. In other words, consultants expect the reward of loyalty for achieving agreed to benchmarks.

This usually translates into either new assignments or ongoing participation in the growth of successful programs the consultant creates.

There is nothing worse than introducing a client to a major moneymaking opportunity that the consultant delivers at great personal risk (to his reputation) only to watch the client expand the program by cutting out the consultant to save a few dollars (usually with less capable suppliers).

Consultants cannot charge enough up front for the problem solving ideas they create for clients based on consulting expertise and brain power without participating fully in the program's expansion.

No contract will protect consultants from this type of abuse just as employment contracts mean nothing when employers demonstrate lukewarm commitment to their people or written promises.

Charging for time alone guarantees the poorhouse for independent consultants.

That is why freelancers who know what they are doing charge by the project to get somewhat better compensation.

In the absence of adequate up front revenues, most consultants expect to be rewarded by ongoing work they are qualified to perform.

2. Freedom from nickel and dimeing behavior

If a client asks for an estimate, then we create one for them. It is usually a lump sum with a full description of deliverables.

Please do not ask us to break down the estimate in detail. This usually ends up in a bidding war for each step with the client. This is unproductive, does not save the client money, and costs many unbillable hours for the consultant.

For example, give us a cost per sale or a cost per lead allowable along with the detailed results of your previous efforts and we will come back with a plan to beat your previous results.

We can agree on a flat fee plus compensation for increased performance over an extended period of time or go for a strait fee.

Clients ask us not to nickel and dime them with our invoices. All we as consultants ask for is treatment in kind.

3. Do not use us as a bank

We ask the client to pay for services in advance on an agreed to schedule regardless of their high credit ratings. We are not in a position to offer services on credit. And our high quality suppliers also require payment in advance before producing custom products for clients.

We have tried the 30 days net. But companies rarely honor this even though we must pay our suppliers within 30 days or in advance. All companies are tightening up their accounts receivable due to client abuse.

If we agree on 30 days net, then we get paid 60-90 days later. We just don't have to work with clients who don't pay promptly. So our simple solution is to work with clients on a pay-as-you-go basis.

We have only lost one new client in the last 17 years when insisting upon our payment arrangement. This also means that we have never suffered a loss due to non payment of any invoice. We either get paid as we progress and we stop the work when the money runs out.

4. Share your marketing and other work problems with us

We enjoy what we believe is an unusual friendship with our clients over time. They know that we can provide better strategies and recommendations when we understand their internal and external challenges.

And when giving us assignments, our best clients speak with us at the strategic level so we have the big picture.

This approach gets the most reward and energy for the client. Trust goes a long way in stimulating everyone's creative juices.

Conclusion: Our long term clients possess these 4 qualities. But the best clients also refer business to us. This is the best way for consultants to build their practices. Referrals attract clients with these same qualities almost without fail.

What other qualities do you look for in your clients if you are a consultant. What did I miss?

Posted on July 2, 2009 and filed under Consulting.