In my last post I described how small firms can win against big ones by gaining special access to a client.  They can also win by delivering a compelling message.  To be compelling, it must represent something that clearly differentiates you from your large competitors.  Among the messages used this way are:

We do a better job, because this is the only thing that we do: A big competitor may be better known than you and have a stronger brand, but their brand is usually more diffused than yours, because it must encompass more services.  All big firms also have practices that don’t fit neatly within the brand they promote, and others that are clearly secondary in importance to the firms’ businesses.  This gives you the opportunity to differentiate your firm on the basis of your specialty.  This argument will only succeed, if specialization really makes a difference in your area of work.  You argue that because you don’t do anything else, you recruit, train, promote, reward and organize around just this kind of work.  This results in a more effective organization and better work producing better results for the client.  If you can back this argument up with specialized data bases, research, publications or other demonstrable differentiators, so much the better.

We do a better job, because we have fewer conflicts of interest.  The more services a firm has and the bigger it gets, the more likely it is to have potential conflicts of interest when serving a client.  Sometimes they are so severe that they are subject to regulation.  That happened to the big accounting firms which are now proscribed from serving as outsourced providers of an audit client’s internal accounting and bookkeeping functions, as a result of the Sarbanes Oxley Act.   Sometimes these potential conflicts draw sufficient heat that clients avoid them, even when not prohibited from doing so.  In recent times this has kept many companies from buying executive compensation services from the firms which do their pension and benefits work.  This provides opportunities for small, focused firms to replace them.  As another example, if a law firm that works for insurance companies also does insurance recovery work, it raises a fair question about potential conflicts of interest.  A firm specializing in insurance recovery and which doesn’t work for insurance companies can win business on that basis.

You will get better service because your business will be more important to us than it will be to a big firm.  A company that is a middling or small client to a big firm is likely to be a major account for yours.  This means it will get more of attention from your firm.  Your A Team will work the account, where a large competitor might assign a B or even a C team.  The client can get easy access to the head of the firm, if it wants to for any reason.  I know one small MEP (Mechanical, Electrical, Plumbing) consulting engineering firm, which specializes in small repair and renovation projects for large clients with big processing operations.  They are set up to complete these projects efficiently and profitably, whereas, for large competitors, the projects are often seen as a nuisance.  That they gladly take on small projects that others will do only begrudgingly wins work.

You will get a richer mix of talent from us, because we are less leveraged than big firms are, meaning fewer rookies working on your important assignment.  You aren’t expecting the client to pay for the education and development of junior team members, because the firm tends to hire experienced people.

We cost less, because we have less overhead.  Many small firms don’t compete on price.  But many others do and there is nothing shameful about doing so.  This works best if you are avoid giving the perception that you pay less, and so may attract less qualified people.  One consulting firm has grown rapidly by focusing on selling work within an easy commute from its offices.  Because travel costs for its consulting teams end up being much lower than for big firms which move huge teams from across the country to do an assignment, the total cost of their services is lower.

Winning against a big firm is challenging, but it sure feels good when you do

In a recent post, I mentioned that a debrief after a loss taught me that my small firm could compete against a big one and set me on the path to winning work that transformed my firm.  A reader, whose small firm competes frequently against big ones, asked me to elaborate on that subject.

A big firm has many advantages, when competing against a small one.  It spends more on marketing and does so many more engagements with so many more clients that it usually has a stronger brand.  The marketing team can help put together stunning proposals and presentations.  Big firms can devote more hours to a pursuit.  They have greater depth and breadth in their professional teams.  Offering multiple services, the big firm is more likely to have an established relationship with someone at the targeted account.  Professionals at big firms can point out that one-stop-shopping for an array of services lessens project management cost and complexity for the client, and that there are less likely to be gaps between services, a common frustration for clients who parcel out a project in pieces to multiple firms.  The list goes on.

Yet small firms do win against big ones and do it frequently.  Sometimes they win on access to key people in the client company.  I will review some of the special forms of access that they can benefit from in this post, and describe other ways they compete with big firms in the next.

If you can learn about a client’s need early, and get in front of the buyers quickly, before competitors do, at the very least you have the advantage of more time to learn about what the client wants and the potential to make your case more frequently.  At best, you can shut out competitors before they even realize the client has a need.  Here are some tips for gaining early access:

Tip #1: Seek to develop a referral relationship with people who sell to the same people you do.  Focus especially on those who compete with big firms in one area, but don’t compete with you.  If a client has a need for your services, such people are unlikely to refer a mutual competitor.  If they know and trust you, they will be happy to recommend you—and, of course, you should do the same for them.  I belong to a formal networking group made up of representatives mostly of small firms, will sell to professional service firms.  There are many such formal and informal networks.

You can also develop a relationship with competitors and their colleagues at large firms which may be conflicted out of the opportunity to work for a client, who would rather see the work go to a small firm, like yours, rather than to a firm which competes with them on many fronts.  Working with such people provides you with extra eyes and ears in the marketplace, identifying opportunities for you.

Tip #2: Figure out who wants you to win and see if they might have opportunities to introduce you to decision makers.  You can also get special access through former employers, colleagues, employees, because they want you to win.  Many small firms get started when the founder leaves a job at a company, but continues to work for it as an independent advisor.

Tip #3: Figure out what can you do that will give you special access.  It had best be something you like to do, because it will absorb large amounts of your time and energies.  Sometimes you can do something difficult for a large competitor to imitate that gets you access.  The founder of a small consulting firm I know is getting many meetings with senior executives.  They meet with him because his recently published book which captures their interest and because his professional meeting-getter knows how to use that interest to obtain meetings.  I have seen others gain access through organizations they found and promote, from a golf tournament to a full-fledged professional association.  These channels take a lot of work, but can deliver huge payoffs.   Most small firms that have grown to midsize have done so by investing heavily in some such vehicle.

(This is another of our posts from one of our readers seeking advice.  Please feel free to submit questions that you would like help with.)

Ian Brodie, a smart man and rainmaking expert, sent in the following question:

I’m currently puzzling over the question of whether to focus on building a personal brand (my name) or a company brand. I know a couple of local associates who are in a similar position too.

When I first set up my practice a year or so ago I selected a “corporate” name for the business. At that stage I (perhaps lacking in confidence in my own reputation) wanted to give the impression of being an established business rather than just a “one man band”.

However, over the last year it’s become clear that no matter what the name of the business, my clients are hiring me personally – not a company.

With that in mind, I am now wondering whether it would be better to rebrand the business under my own name. That would make it easier for clients to remember and find me (by searching for my name rather than having to remember the name of the company) and also to refer me to others.

Over the long term, I also intend to publish a number of articles, and perhaps a book. This would obviously be under my name rather than under a company name.

A lot of the people I admire in consulting run their businesses under their own name: Yourself, David Maister, Andrew Sobel, etc. Others, however, have a company brand: Charlie Green as Trusted Advisor Associates; Suzanne Lowe as Expertise Marketing.

So the choice doesn’t seem obvious to me. At the moment I’m tending towards rebranding under my name. There would be a degree of administrative pain involved initially, but I guess better to go through that now than in 5 years time.

Any guidance?

(This post in another in our series of Rainmaking Problems. We invite your comments on this problem and would also welcome any problems you would like to s to get comments form other readers.)

I recently met with a client adjusting from the heady days of a boom economy to the current bust. Several of its professionals argued that they hadn’t been in a sellers’ market. Competition for large projects was always tough, they said, and though they had won a lot, they had lost some, too. True enough, but their firm’s major competitors had grown at rates over 20 percent per year and the firm, itself, faster than that, while maintaining or increasing prices. Sounds like a sellers’ market to me.

There is good reason to clarify this point, because recognizing when one is tipping from a sellers’ to a buyers’ market or vice verssus has important implications for many professional firms. That’s because the price of many professional services is quite elastic with demand. Boom turns to bust quite suddenly (see my post, Selling Professional Services in a Downturn, for an explanation of why), and you have to drop prices quickly, if you want to keep winning work. The market teaches this quite effectively, when too many firms compete for too few projects or assignments and clients play them off against each other to get the best deal.

When the tide turns to boom again, clients aren’t nearly so quick to help you see that you can raise your rates. This means that prices tend to go up more slowly in good times than they go down in bad. The firm which recognizes when it can charge its clients more generates much higher profits than its competitors.

My question is, how will we know when this downturn is over and we can begin to push up rates?

When two people who haven’t worked much with each other first go on a sales call together, one often dominates the conversation with the prospective client. When two people go on a sales call together and one is much senior to the other, the senior one tends to do most the talking. Anyone who sells with Maxwell Flushover (name changed—actually, this could be one of a dozen different people I know) learns that he will do most talking. In cases like these, what is the second seller to do?

She (or he) has several options:

1> Sit silently trying to look wise and interested. This may be good for starters, but if it goes on too long, the client may wonder why she is there.

2> Take notes. Good, but if it is all she does, the client may perceive her as junior help.

3> Fight with the colleague for airspace. This will alienate both the client and the colleague.

4> Take the role of monitor, carefully watching and listening to the client for visual or verbal cues that her colleague may miss during the exchange. When she sees one she will insert a question, like:

• I sense that you aren’t comfortable with that idea. Is there something you could share with us?
• You said there were three reasons you want to do this. Did we miss the third one?

It is, of course, this last alternative that I am advocating. As anyone with a lot of selling experience knows, a monitor can contribute hugely to a sales meeting. Every firm should have an understanding that anyone not speaking goes immediately into monitor mode. Everyone should know that the monitor will speak seldom, but when she does, everyone else backs off immediately.A good monitor can make the difference between winning and losing. The furrowed brow of the General Counsel, unnoticed by the first seller who is speaking to the CEO, may veil a concern that will go unspoken until later, unless an observant monitor draws him out. And the concern only voiced after you leave the room is the most hurtful to your cause.

Establishing the monitor’s role as an important one in all sales meetings counters the implicit and insidious bias that important people talk during sales meetings, while others listen. The job can be done by the most senior person on the team—and should be whenever someone else is speaking. Indeed, to instill the role in a firm, senior people must model it. And they must complement those who have effectively monitored their exchanges with a client.

There are no second sellers.

(This post is another in our series of Rainmaking Problems.  We invite your comments on this problem and would also welcome any problems you would like to submit to get comments from other readers.)

I received the following question from a reader in Singapore.  He was responding to Rain Making Problem #9: Lead Generation when Your Back is to the Wall to which he refers several times.  What would you suggest?

Hi all,

Ford, I just want to say first that I think what you’re doing is great. I was so unhappy with my previous firm, I set up my own practice last year with just one client. From what the client told me before I quit, I was going to be extremely busy just servicing them. However, for various reasons they have sent me only about one-quarter to one-third of the work they indicated they would send me before I quit, so your books and your website have been a life saver for me.

I’m sorry that I don’t have any tips for Lenore, but I do have a question which relates to Mel’s point on focusing on serving rather than winning. I like to think I provide first-rate service. I’m not aware of anyone else in my geographical region and area of practice who provides service and does work to the standard I do. The only trouble is, how does one show that to a potential client? The way I see it, the scope for doing this is pretty limited: you can only go so far in writing proposals, and you may be limited to just one, or if you’re lucky, two meetings with the potential client to talk over their needs, etc. Otherwise, “We’re great. Our service is awesome and we’re much better than everybody else” just sounds like another sales pitch that the potential client also heard from the competition. It is only when you actually land the work that you can show what you do.

So, do you have any tips to share on focusing on servicing during the sales process? Thanks in advance if you do.

In a sling in Singapore,

Willem

Of course, I am responsible for the in-a-sling close. Forgive me Willem; I couldn’t stop myself.

In postings last year I described three kinds of elevator speeches. One, the sales meeting elevator speech or positioning statement is used at the start of a sales meeting to reassure the client that you are a person who knows enough to make the conversation worthwhile.

You don’t use them to convince the client to hire you nor to differentiate you from the competition. You can do these things once you know more about what the client is looking for. For now, you just give the client enough information to get her talking.

A variation on the positioning statement is the theme elevator speech. It is used only in complex sales, sales for large, complex services made over months at many meetings to many buyers against competition. Unlike other positioning statements, these do differentiate you.

In large, complex sales, getting a clear message about why you are special across to many buyers over months can be hard. The many people in the client’s organization involved in some way in the selection process over months will become confused over time about which professionals were with which team.

Suppose that to make the sale you must have ten meetings with a combined total of fifteen members of the client organization. So must two competitors. This is a LOT of meetings. It is imperative that you do something that gives the people in the client organization a clear and simple way to remember what team you are with and how that team is different.

The theme positioning statement is a short, memorable and compelling sentence about what makes you special. Develop it as soon as you know the client’s key concerns and who you are competing against. Once you have created it, you and your team members should repeat it at the beginning of every meeting with a new buyer and as often as is practical at the start of meetings with buyers you already know. It becomes your brand for the purposes of this sale. Here are some examples:

• Knowledge of the Client: We know how special your company’s culture is because we’ve been working with your people to help the company grow for the past fifteen years. (This theme helped a technology consulting firm sell a new service against competitors much better established in that service area.)

• Specialists: Our people work only on [the specific kind of need the client had]. This is what we do. We get results because we have developed an array of techniques and tools focused on [this kind of need]. (This theme helped a firm win business over two larger, multi-service firms.)

• One-Stop Service: We specialize in this kind of problem and can provide every major service required to get it resolved. (This theme helped a firm capture a large share of the market away from firms dealing in only aspects of a large problem a client had to deal with.)

• We Deliver: We’re the firm that successfully defended the five pharmaceutical companies named as co defendants in the class action suit alleging ill effects of taking puscilanta and similar drugs.

You will know that your branding effort is successful when you hear members of the client team start to refer to you in the language you have been using. “Clara works with Bucken Husse. They’re the ones who know how we do things here, because they’ve worked with us for so long.”

Some of the material in this posting appears in the second edition of Ford Harding’s book, Rain Making, which will be published in February and contains about 40 percent new content.

What do you do when a client brings up a matter she is clearly concerned about without realizing that it is something you can help with?  I must hear this question twenty times a year.  And it’s a troublesome one. 

Of course, there are some people to whom you can say, “Hillary, we have a lot of experience at managing come backs.  Let me tell you what we can do.”  But we have to know a person pretty well to know that they will accept this sudden shift into sales mode.  Many others will wish they had never brought up the matter and extricate themselves from the conversation as fast as they can.  They come away feeling that you have been insensitive or, worse, pushy and will be careful to avoid bringing up problems with you again.

Rainmakers deal with this problem simply and directly by asking permission to go into sales mode.  They say such things as:

• You didn’t come to lunch today to be subjected to a sales call, but you’ve brought up a subject that we actually know a lot about and I think we can really help you.  But I’m not trying to push anything at you.  So, just let me know if you want to talk about it.
• Would it be all right if I put on my sales hat on for a minute?

After saying these words, the rainmakers shut up and listen to what the client has to say.  If she shows any hesitation about accepting the offer, the rainmaker backs off immediately.  More commonly, he client accepts, and a sales meeting begins.

 

Whether it is by cutting costs or increasing revenues, many professionals help their clients make more money. When selling to a client, it’s a good idea to determine how much money that will be, usually through a series of questions. Once the dollar amount is estimated, a rainmaker will sometimes go one step further, letting the client visualize what she would do with that money, if she had it. Doing so will remind the client of the urgency of getting the job done, so reducing the risk of a delay in hiring you. It will also help focus the client on the value of your services rather than on some preconceived idea of what they should cost. Here are two examples of such two-stepped series of questions.

Issue: Potential Real Estate Sale

Step One: Determine the Value

Q: How many acres did he donate to the college?
A: Ninety, but a third of that is wetlands.

Q: What is it worth per acre?
A: The developable acres have been appraised at $____________, the wetlands at $____________.

Q: How many acres would you be willing to sell?
A: We want to keep fifteen developable acres adjacent to the campus and all the wetlands. We will sell the rest.

Step Two: Letting Her Spend the Money

Q: Let’s see . . . That totals to about $ __________ and if you can acquire the old Peggoty farm, giving the site access to Dunmore Road, the value could as much as double. What would the college do with that money if you had it?

A: We badly need a new chemistry lab if we are to remain competitive in the recruitment of faculty and students.

Issue: Hiring the Right Talent

Step One: Determining the Value

Q: I can think of several reasons to get this position filled quickly. Which ones are you most concerned about?

A: I’m worried that some of the other research team members might jump ship. They all get offers from our competitors all the time, and if they sense the project is in trouble, they would be more open to accepting one.
Q: How would a loss of two or three of the researchers affect the project?

A: It could delay its completion by anywhere from four months to a year.

Q: What would a delay in the project cost the company in lost revenue for each month of delay?

A: We project sales of the A30 to build quickly to $____________ a month in the first six months.

Q: How much of a delay do you feel the recruitment and integration of three new team members in addition to the lead scientist would cause?

A: That would set us back eight months at the very least.

Step Two: Letting Her Spend the Money

Q: Ouch. If that could be reduced to a two-month delay, what would the additional funds be used for?

A: We cut dividends last year and want that money to restore them to previous levels.

From Flip to BLIP: On Tuesday we covered The Amazing Flip or how a rainmaker can sometimes flip roles with the prospective client and get the client to try to convince the rainmaker of desirability of her firm as a client. Today, we will turn to BLIPs. BLIP is an acronym for Bottom Line Impacting Project, a term which some firms use to describe the largest opportunities they pursue, the ones most important to win. To classify as a BLIP, a project usually must have a fee above a certain amount.

One international firm limited BLIPs to those projects with fees expected to run over $4,000,000. A friend of mine, whom I will call George, was the head of marketing there. A smart man who knew a lot about selling professional services, George believed in the persuasive value of good data and he analyzed the firm’s sales data carefully. Every year he would determine the win-rate on BLIPs. This was an important statistic in a business where all projects were competitively bid, with four or five firms duking it out as finalists. In its best year, George’s firm won over sixty percent, an astounding number given the competitive nature of the business.

Then George did something interesting. He looked through the firm’s old lead lists, which management used to track opportunities the different offices were pursuing, for the date that each one of the BLIPs first appeared on it. He used this data, to determine how many months the firm was actively pursuing each project. He then calculated the win rate for each one and determined win rates by the length of each pursuit to see if there was a correlation. The results were stunning: For BLIPs the firm had pursued for more than a year the win rate was a jaw-dropping eighty percent. This is like a baseball team playing 750 ball; it’s so rare it’s hard to believe when it happens. In other words, the length of time that the firm pursued a project was a major determinant of success. In essence the analysis showed that if you only learned about an opportunity when the request for proposal arrived in the mail, your chances of winning were negligible.

This will come as no surprise to anyone who has sold professional services for a long time, but I have never seen it so clearly documented. And, just as George had predicted, the data argued persuasively for learning about projects early. Why should this be so?

There are several reasons. Selling is done through an exchange of information. The buyer gives you information on his needs and you give back information on how you can address them. The more you know about the client’s needs, the more accurate the solution you can frame and the more persuasive the words you can use to describe it. This is because the firm that knows about a client’s plans to hire a professional has more time to find out about a need. The team from that firm can talk to more people about what the client wants and talk to them more often. They may even be able to help the client better understand his problem and the kinds of help the client will need to fix it. The client selects the professionals he wants to work with and justifies his choice with logic afterwards. A firm that has early information on a client’s need has more time to develop an emotional linkage.

Also, as the number of people who learn about a pending project goes up, the more formal and limiting becomes contact between the client and the firms competing to win it. This reduction in contact is required by regulation for government projects. Though less formal in the private sector, as the number of professionals want access to the client rises, it becomes harder for the client to get work done. To avoid this, many clients limit access as the decision about whom to hire gets closer.

Anyone who has sold a lot of professional services knows this. I write this for those who haven’t, for those who see an RFP from a client as a much more promising opportunity than the longer and less direct pursuit of an as yet unidentified project by going out and talking to people who have not expressed any specific need, yet. In many cases the RFP is the illusion of an opportunity. The client has already decided which two or three firms it will choose from, and those firms have been pursuing the project for over a year.