AMCF – Marketing/Branding Affinity Group

February 8, 2002

Introduction
The Marketing and Branding Affinity Group Roundtable meeting included attendees from (a) management consulting firms and (b) consulting firms that specialize in strategic marketing, branding and communications. Sales and marketing issues relevant to consulting firms generally and those particular to marketing and communications consultancies were discussed.

Pre-Meeting Agenda

Sales & Marketing Issues
 Sales, marketing and branding are more important than ever in a tight economy however investment in these areas is too often perceived as an overhead by professional service firms when business slows down. Instead, there is usually greater pressure on in-house staff to take responsibility for these highly specialized areas of expertise, in the absence of the necessary expertise and/or resources to implement processes that will attract business and ensure the continue success of the firm.

Without sales there is no business. Further the professional service firm’s greatest asset, its human capital, is in danger of being lost through layoffs or turnover due to underutilization.

Therefore, the purpose of this meeting was to determine: (a) what are the most effective sales/marketing/branding strategies and processes that management consulting firms can adopt to increase business; and (b) how can marketing/communications/branding consultancies sell their services clients more effectively.

Introduction
 Strategy/design consulting is considered a luxury in this marketplace by most clients. There is higher demand from clients for consulting services that focus on cost optimization processes, implementation and outsourcing to clients. The proportion of consulting business sold in this market is 30% strategy and 70% implementation (previously the opposite ratios applied). Consultants are seeing more shopping for, than buying of, professional services.

The downturn in the economy, the terrorist attacks of September 11 and the recent Enron scandal all have had, and will continue to have, impact on the consulting profession. It is believed that the economic downturn has had the greatest impact overall. This economic downturn has had considerable impact on multinational organizations because this is the first time the globalization of the world economies has resulted in a domino effect.

Marketing and advertising budgets have been slashed by both management consultancies and their client corporations and they have either looked in-house for solutions or they have abandoned significant marketing initiatives and branding strategies until the economy improves. There is greater pressure to find more cost effective sales techniques (e.g. cold calling and email).

Subsequent to the terrorist attacks of September 11, travel was disrupted (interfering with consulting business and sales calls); cyber-terrorism was feared (threatening corporate internet security) and direct mail campaigns were temporarily disrupted by the anthrax scares. However, most consultants agreed that the Enron scandal would have an even greater impact on the consulting profession generally, due to increased scrutiny of the "trusted advisor" (i.e. Arthur Andersen’s involvement).

Consultants are currently focused on leveraging existing business for on-selling, as well as finding new business. Rather than waiting for the phone to ring, consultants are more proactive in identifying potential project opportunities within their existing client base and soliciting work.

The RFP process has become much more competitive and clients are expecting more than a proposal that describes how the work might be done; they are looking for some of the consulting strategy in the proposal document. Consultants are being asked to deliver more work in advance to demonstrate their ability to do the work and clients are giving less information about their business - making competition tighter between competing consulting firms.

Over the last 12 months, business has been variable. In June/July last year there was a sharp decline and it was not until Thanksgiving that business started to improve. Since Christmas business has been slow to ramp up, however there are signs that there is a lot of pent-up demand and that firms are positioning themselves to invest in resources for projects after April.

With all of the downsizing that has taken place in large corporations, there will be great opportunities to sell consulting services, both in management consulting and marketing & branding, once consumer confidence returns. Consultants should be educating clients, in the meantime, of the benefits of using this "down time" to position themselves well for the upturn (which is inevitable). Strategic alliances with other consulting firms providing different services to the same client base can reinforce this message and expose smaller consulting firms to a greater number of business opportunities.

Chuck Berger, the renowned marketing guru, espouses that you can only offer a client a solution to a problem – so consultants need to find client’s problems and demonstrate how they can be solved. Find out what is keeping your clients up at night and prioritize those concerns. Solving practical and tactical problems, as mundane as they may be, will help you develop relationships and cultivate trust, enabling you to sell strategic consulting services from these smaller projects.

How to Reach More Discerning Clients
 The ideal scenario is for consultants to choose their clients rather than having their clients choose them. To sell to discerning clients, keep abreast of their market and demonstrate your knowledge of their business and market trends to them. Contact clients when they have media exposure and use it as an opportunity to introduce yourself.

Clients prefer vendors who specialize (the key in this market is to focus on future growth sectors). Once you have market knowledge conduct surveys, write articles and speak on relevant topics of interest to your target client audience to demonstrate awareness of their problems and issues. Gain credibility by developing strategic alliances with organizations with existing relationships in your target clients.

New Strategies to Maximize Return on Investment
 The best way to leverage the knowledge you have garnered in a client relationship is to develop add on business by selling consultatively. Diversify your service offerings with your existing client base, otherwise you will have to grow your client base and new business is difficult to sell in tough economic times. Develop means to show clients a return on their investment which will ensure a greater success ratio with sales.

How to leverage the value of your business development process without increasing the budget or headcount

Whatever marketing medium you use, ensure that contact is consistent and persistent with existing and potential clients over time.How to Develop Measurable Processes and Help to Focus Resources Over Time

Use target charts and metrics. Develop forecasts and review progress on a constant basis and adjust strategies and tactics accordingly.

Qualifying Leads
 Most organizations have haphazard methods of generating leads. It is best to have a defined process that is regularly followed to ensure a continual flow of leads because only a percentage of any leads generated will result in work.

Unlike mass consumer sales, selling professional services to businesses usually involves a more targeted and focused lead generation process (i.e. market research, telephone enquiries, contact identification, etc). Once lead information is generated, it must be recorded and continually updated.

Warm calls, that is calls made per an introduction or referral, are usually much more effective than cold calling in professional services. People are more likely to buy a product from someone they don’t know if they can assess the product on a stand alone basis. Services are different as they are performed by people with whom clients have relationships and therefore a relationship needs to be developed before a sale takes place.

It is imperative to qualify a lead as soon as possible to avoid wasting time and resources. The caller/person meeting the potential contact should immediately ascertain whether the potential client contact is a decision maker and whether a budget is available for the services to be sold. In some cases the purchase of consulting services (particularly involving technology purchases) is moving away from the CTO and CIO to the CFO.

It may help to disarm the prospect by qualifying the enquiries with the expression, "I know you might not be looking to buy these services immediately, but can you give me some idea so that I know what your situation is if and when the need arises" (or something along those lines). Otherwise, a prospect may feel cornered and not volunteer the information you need. If possible suggest an agenda to discuss prior to meeting the company contact so that they feel prepared to meet with you and comfortable about the issues you want to discuss.

In order to avoid wasting time, some consultants are creating less formal proposals and fees may be included at the outset. The quicker a prospect/lead can be qualified the quicker a decision can be made to pursue or abandon it and create more opportunities.

Adaptive Services Portfolio
 Expanding service offerings which are brand consistent and complimentary can create further business opportunities with existing clients. The new services must be a logical evolution (not a "revolution") from existing services so that existing clients are not alienated or potentially lost. This strategy can turn requests to buy existing services into opportunities to sell new services.

An expanded service offering may be favorable when principals are considering selling a consulting firm (especially when services are commoditized e.g. package and sell knowledge in the form of databases, market research, analysis, etc.). Intellectual capital will be lost if knowledge is not captured and stored in a form that can be sold – this process turns intangible assets into tangible commodities.

Showing Value
 Clients need to be educated about all of the value that you bring to a project, do not leave anything assumed. Other benefits that you offer over and above the implementation of strategies are: independent assessment of situations, market knowledge, brand extension, etc.

To show financial value, you will need to value your intangible assets and show how the return on your client’s investment in your services.

Closing Sales
The ease with which a sale is closed is usually determined by basic laws of supply and demand and/or the degree to which a client needs to be educated about their need for the product or service.

To close a sale quickly (which is increasingly difficult in the current market place) you need to identify the need for your consulting service quickly and coherently and you will need to show that a delay in purchasing your service will result in a financial loss to your client. Once you have established the need and created desire for your service you should manage the sales process diligently, setting time frames and deadlines for each stage of the sales process.

The sales process is no different to a consulting project in that the client must be engaged and communicated with frequently. Consent must be from the obtained from the client at each step to validate the process and lessen the chance of the sale falling through.

To the extent that you can, consultants should also demonstrate the return the client will receive on it’s investment in your services, particularly if the purchasing decision is coming from the CFO. This is difficult when you are selling intangible assets, like professional services, versus products like hardware or software. The best way to illustrate the investment benefits is to cite case examples of when you have worked with clients previously on similar projects (in most cases consultants are not brought in until an organization is unable to solve the problem itself) and contrast the time taken to solve the problem by you versus the time it was not dealt with beforehand. If you are optimizing costs in an organization or helping grow a business, if either of these processes are delayed it should be relatively easy to show lost revenue as a result.

The best way to close a sale is in person. Consulting, like other professional services, is a personal relationship-based business. Use meetings to deliver proposals not only ensure consistency in communication but to ensure that objectives are met and steps finalized. It will be easier for a client to say no to you in an email or on the phone than it would be in person.

Marketing Channels
 Partner Relations
 To extend your marketing reach, strategic alliances are very important (internally and externally). Ensure that you are cross marketing all of your services effectively across your businesses and find strategic partners with mutually beneficial business objectives and client bases.

To ensure success with these relationships each party has to satisfy itself through due diligence that they can confidently sell each others services and that there will be a benefit in the associations (e.g. (a) Steelcase and Sony coming together to create "the conference room of the future" or (b) a consulting firm and Fortune magazine providing consulting services and market data as a combined service offering). If the relationship proves unequal (as many do) then some kind of balancing incentives may need to be factored into the arrangement.

Before marketing to clients as an alliance, the parties need to decide how they are going to present and brand themselves. This requires the partners to clearly define their individual and collective goals prior to meeting the client. Any strategic alliance should bring an additional benefit to a client, rather than being a situation where the client has 2 vendors instead of one to manage. Sometimes a separate parent brand for the alliance should be created so that competing interests are lost with the creation of the new entity.

Once established, the alliance should be promoted by each entity through publicity. The partnership is an event that will strengthen each individual brand by virtue of the fact that each partner is endorsing the other by agreeing to enter into the arrangement.

Web Marketing
 Websites should intrigue a potential client enough to want to call and/or should be professional in look and feel to validate you when used as brochure ware after a meeting or phone call. Sites have greater marketing potential when used to sell business to consumer products or services. Business to business services are better sold in person, due to their complexity and cost.

Websites should not be inert. They should be updated regularly (at least twice a month) with news about your firm and relevant market information. It should evolve as another aspect of the firm’s overall brand strategy and be integrated into the strategic marketing program. Most press articles about organizations will refer to the website link, should readers want to find out more about the company about which they are writing.

A website is an internal and external branding tool which simultaneously reinforces a company’s corporate identity while representing the face of the firm electronically.

If a firm has the resources and time a site can be extended to create a community with interactive surveys, feedback forms, discussion groups and newsletters which encourage clients and interested parties to revisit the site for relevant information creating a self perpetuating marketing process.

Fees
 Some firms are giving away more consulting work for nothing, in the hope that this will encourage clients to pay for services once they have proved their ability. Overall, consulting fees are down 10% across firms in the US. Firms that have not reduced fees are "scoping down" and selling smaller pieces of consulting work to accommodate clients budgets in the hope that they will be invited back to perform add on work. Ideally consultants probably should not drop their fees without some trade off with the client (e.g. I can do it for a lower fee, but the service will not include…), however the reality in this market place is that the decreased demand in consulting services has resulted in more work being done for nothing or at a lower price than usually charged.

Summary
 The need for strong sales and marketing strategies is greater than ever, despite less investment by consultancies and clients. Most organizations are waiting for the market to turn before committing resources to branding and promotion.

Competition for consulting business is strong.

To survive the current market, consultants will need to:
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