I have been reading Shawn Callahan’s blog ever since he commented on one of my early posts, Sadder but Wiser, about the use of an anecdote to show you had really learned something. The Anecdote is a well-known blog, one seen as successful. Among blogs it has a Google page rank of five, something for the rest of us to aspire to. So, I thought it might be useful to see if he has turned up any business through it.

Shawn’s firm, Anecdote, consults on the use of business narrative and collaboration techniques “to redesign and improve the way people learn, share information, retain knowledge and build resolve to make changes in the workplace.” Asked what that means, he gave this example:

One of our clients is a leading financial institution and they have just completed an organizational culture inventory. These survey instruments can be a little dry and difficult to understand so we are helping them collect stories that illustrate the culture and then working with people in the company to design and implement initiatives that will shape their organizational culture.

The firm has served many large corporations and departments of the Australian government.

Shawn has been blogging since 2002, the Pleistocene by blog standards, and The Anecdote blog is his third, so he had two earlier ones to shake the ticks out of his approach. That accounts, in part, for its professional look and content. The Anecdote dates back to November 2004.

Callahan reports that he gets lots of leads traceable to the blog. Because I have not found many blogs that generate a significant number of leads for a professional firm, this becomes an important case. Here are the reasons that I think he has been more successful than so many others.

First, he had the insight to get in early and the persistence to keep at it. Yes, I mean that the blog’s high productivity probably results, in part, from its age, a factor of much importance in a network, as described by Albert-Lázlo Barabási in Linked: The New Science of Networks [Perseus Publishing 2002].

Second, it is also, in Barabási‘s terms fitter, because it has masses of content and lots of links. Type in “knowledge strategy,” “business narrative” or “storytelling training” into Google and you will find Anecdote on the first page.

More importantly type these terms in with a geographic location such as Melbourne, Canberra or Australia and it’s number one. That this may be a more significant differentiator in Australia than it would be in the US or Europe, because the nearest alternative, outside resources are likely to be a ten-hour plane ride away, does not diminish what Shawn and his colleagues have done. We all must adapt what we do to our local conditions for better or for worse. I mention it because each of us must determine what will make our blogs fit in our market places, meaning we cannot expect to succeed in exactly the way he did, using his approach as a recipe. Remember that Callahan had two blogs prior to this one. That experience undoubtedly helped him make this one fitter from the start. We, too, will have to do some experimenting.

The third reason his blog is so successful has to do not so much with the blog, itself, as it does how Shawn takes inquiries he receives on it and turns them into consulting assignments. Turning an inquiry from someone who has first heard about you on the web into new business costing the client a large sum is a big aspiration for a professional and a bigger increase in commitment than most people buying services are willing to make.

Callahan and his colleagues have addressed this problem by inserting a step between the client making a query on the basis of something read on the blog and asking him to sign for a full-blown consulting engagement.

In my book, Cross-Selling Success, I call this a portal service. In Anecdote’s case, it takes the form of courses that the representative of an organization can attend for a modest fee. During the course, the consultants get to show what they can do and what they would be like to work with. They also learn a lot about the client and its issues. After the client and the consultants take this small step together, both have learned a lot about each other and the client is more likely to sign up The Anecdote team to help them run their own business narrative projects.

It took between two and three years for the blog to evolve into an effective lead generator. It proved valuable in other ways earlier. Shawn praises the discipline it creates to get ideas down on paper and finds it a useful place to store and access ideas and information, a consultant’s stock in trade. Says Callaghan, “I often send links to specific blog posts to clients and prospects to keep in contact and show we care about them and their business.”

It’s not all fun. Like other bloggers, he feels the stress of perpetual demand for content (I can identify with Shawn’s concern: I feel that my blog sits at my feet all day, moaning, “Feed me. Feed me.”)

To address this problem, he has developed a set of posting categories: the quick link and short comment; the mini idea (a couple of paragraphs); the foundational idea (4-10 paragraphs). Assigning ideas he has for posting gives him a sense of how much time he must devote to producing the postings. Keeping his posts short, he can distribute ideas over more days When there is nothing substantial to say, he links to other people’s blogs which not only provides content for his readers, it also increases his social network.

In spite of the demands, Shawn is clearly hooked on blogging. He says, “I really love blogging because the more I think about how things connect, the more connections I make. The blog posts become conversation topics and you are rarely lost for something interesting to say while at the same time you become attentive and mindful for new ideas and perspectives.”

Here are some valuable takeaways from Shawn:

1. A blog is a major commitment, in which a professional will have to invest up to two years before you start seeing a return in the form of new business. I hope that some of my readers can prove me wrong on this, but I doubt it.
2. In addition to time, your blog’s success as a lead generator will depend on its fitness. What constitutes fitness will vary from market to market, but at the very least it means good content frequently posted—and probably the right links to other blogs and sites, as well.
3. Rather than trying to convert a lead generated by the blog into a full-blown client, it is probably better to have a small sample of what you do that clients can try first. A blog, like any other marketing technique, can’t just be glued onto the side of your practice. To be successful, it must be integrated with other things you do.
4. Blogs have many small uses as places to store information and to refer clients and prospective clients who are looking for a bit of information.
5. Blogging is fun and can be addictive.

And, now that I’ve had my jag for the day, I can stop writing. 

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Order your copy of Ford Harding’s new and revised edition of Rain Making, called ”…an essential guide for anyone responsible for business development in the professional services industry…” - Mark Mactas, Chairman and CEO Towers Perrin

How well do professional service firm marketing/sales groups work with other functions such as legal, IT, HR, and finance? Does having a formal relationship make a difference?

That’s what Suzanne Lowe wanted to know. The results of her recent survey, along with her analysis, are posted here.

I recently attended the Southeast Regional meeting of the Society for Marketing Professional Services. (SMPS is an association for marketing professionals working at architecture, engineering and construction firms.  I believe all marketers at such firms could benefit from joining).  The participants generally agreed that there was precious little evidence of a downturn.  Most firms had more work than they could handle. 

I believe, however, that a downturn may be more imminent and more severe than most would suspect.  Here’s my reasoning:

First, the performance of professions that make their living off of the design and development of buildings is a lagging indicator.  New building projects don’t get started until a recovery is well underway and excess capacity either absorbed or removed from the market.  Also, there is so much momentum to these projects and the financial and emotional termination costs are so high, that they keep chugging along even as the economy dips. 

But when the top management of organizations are really convinced that they are about to take a financial bloodletting, out comes a large, stainless-steel cleaver and chops off any planned projects.  About a week later, out it comes again and lops off all projects that are underway, except for those nearest to completion.  In a period of two to three months, the professional firms go from working flat out while desperately trying to find more people to recruit to famine, with many of their people sitting around in the office dazed and unbilled, trying to figure out what happened.

Anyone who hasn’t been through a downturn will find this hard to believe.  Let me show you what happens.  You’re revenue (R) is the product of three numbers

1. the number of people you talk to about your services (N)
2. the percent of them you persuade to buy your services (B)
3. the average fee charged per client (F)

So, N x B x F = R

Or, if N = 100, B = 10% and F = $100, your revenue can be calculated as

100 x 10% x $100 = $1,000

When the downturn comes, the percentage of people in your network who buy shrinks and those who remain have smaller budgets.  In other words B and F decline.  If we assume this decline is ten percent, the revenue calculation looks like this:

100 x 9% x $90 = $810

Whoa!  What happened?  The percent buyers and the fees per client each declined ten percent, but revenues dropped nineteen percent!  That’s because the variables are multiplied against each other resulting in a geometric fall.  This shows how relatively modest declines in the buying power of our market can result in a devastating reductions in revenue.

This is an indirect path to reveal the importance of N, network size. You can’t control B or F (the percent of your contacts who buy from you and the average fee of earned from each).  But you can control N, the size of your network.  N is a function of the number of people in the market that you stay in touch with.  That number is largely within your control.

But today, you are awash with work.  You are so far behind that you don’t have time to maintain your network.  In fact, you are afraid to call people for fear that they will want you to do some work which you don’t have time for.  So, you don’t call and over the months your network begins to slide, too.   In other words N declines by, let’s say, ten percent, too. Our equation now looks like this:

90 x 9% x $90 = $729

This is a decline of twenty-seven percent.  That’s eight percentage points less than we would have to deal with, if only people had kept up their calls and meetings.  How many jobs saved does that translate into? 

So, keep up your calls and meetings, even when you are fully loaded with client work.  When a downturn comes, it won’t be as steep, nor last as long if you do.

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Order your copy of Ford Harding’s new and revised edition of Rain Making, called ”…an essential guide for anyone responsible for business development in the professional services industry…” - Mark Mactas, Chairman and CEO Towers Perrin

Before reading this you may be interested to read my previous posting No Time to Rehearse? You’re Fired!

At many professional firms, preparing for a sales meeting means many hours spent preparing a PowerPoint presentation deck that will double as a leave-behind. This document and maybe a proposal, too, have been through several iterations, proofed and reproofed, adjusted, adapted and then admired by the sales team who may or may not remember to thank the graphics specialist who stayed up all night incorporating last minute changes.

With document in hand and confidence buoyed, the sales team grabs a cab to take them to the client’s office.  During the fifteen minute ride they decide what they will say and who will say it.

This is insane.

Long ago I was put in charge of a struggling office that was losing pitch after pitch. To turn the situation around, I did post mortem interviews with as many people who had hired other firms as I could.  I used a process for the interview that avoided biasing the clients’ responses (see Chapter 24 in the second edition of my book, Rain Making: How to Attract New Clients No Matter What Your Field for a detailed description of the process.).  I must have done twenty such interviews over several months, sometimes with separate members of the client’s selection committee.

I first asked the client why she had chosen the other firm, letting her prioritize her reasons without any suggestions from me.  I then asked what our competitor had done well, what we had done well and not so well, again without offering any suggestions.

Once I had her view of the decision, I asked her to compare what we did with what the competitor did, starting from first contact.  One issue at a time I asked how each firm handled the initial phone inquiry from the client, how each handled the fact finding meeting, the proposal, the pitch meeting, the leave-behind document, and follow up.

Not once was the proposal or leave-behind mentioned by any of the clients until I brought it up.  Not once!  When I did bring them up, it was clear the clients didn’t remember them very well, if at all.  I suspect that many of them never so much as glanced at the leave-behind.  The deck or pitch book were mentioned by two or three clients, all referring to one image, a particularly compelling diagram our competitor had concocted.

What they did remember and what all of them volunteered without prompting was how our people and our competitors had handled themselves in face-to-face interactions with their people.  This they could talk about in detail and with emotion. This is what they cared about!

Like so many other firms we had been putting all our energies into things that mattered little and treating cavalierly that which really counted.  It was insane!
And when we fixed it by taking rehearsals seriously—putting in time and effort where it mattered—we began to win again.
 

For more advice like this, please see Ford Hardings’ new book: Rain Making, Attract New Clients No Matter What Your Field, 2nd Edition

“Rain Making, in its new edition demonstrates its position as the single most sensible, accessible guide to building a professional practice…”
David Maister, author of Strategy and the Fat Smoker and co-author of The Trusted Advisor (with Charles Green and Robert Galford)

A previous posting showed how a professional who questions his own value can determine what value his clients get from his services.

To get her price, however, a professional must not just know what her help is worth, she must feel it and act like it. Of course it feels uppish the first time you quote a $500,000 or $1,000,000 fee (or whatever is a large number for your firm). This is especially so if you are used to quoting much smaller numbers (see Why Peter Couldn’t Bag an Elephant for more on that subject). But you had better not let your doubts show.

Here are some things you can do to make it easier:

First, practice saying these words, I can help you. Practice them in front of someone you trust, and, if possible, have her videotape you, so you can see what you look like. Say them with calm self-assurance. You are simply stating a fact. You aren’t arguing with anyone or trying to convince anyone; you are just stating a fact. Have your friend tell you whether or not you sound believable and self-assured. Practice it again and again until you can turn it on at will as you do a faucet. You probably won’t say these words when you get in front of a client, but you will think them and the tone will carry over into what you do say.

Now, say them again, adding these words at the end, This work will run you between $750,000 and $1,000,000. And again, and say, Well, those are our rates. And again, this time adding, Well, how much of a deduction are you looking for? We might be able to shave a little off, but if we are too far apart I don’t want to waste more of your time. Remember your tone. You aren’t arguing. You are calmly stating facts.

Practice this until you have it down, and then try it on a client.

For more advice like this, please see Ford Hardings’ new book: Rain Making, Attract New Clients No Matter What Your Field, 2nd Edition

“Rain Making, in its new edition demonstrates its position as the single most sensible, accessible guide to building a professional practice…”
David Maister, author of Strategy and the Fat Smoker and co-author of The Trusted Advisor (with Charles Green and Robert Galford)

Any athlete, no matter how talented, who doesn’t practice with the team falls short of being a true professional. Any actor, musician or dancer who doesn’t rehearse, is unlikely to make it as a professional. Professionals who don’t practice quickly find themselves without a position, part or seat with the team, cast or ensemble.

Accountants, actuaries, architects, engineers, executive recruiters, lawyers, management consultants, publicists have to prove themselves as presenters to make partner. That is because partners are professional presenters. They present to their clients, to judges and juries, to arbitrators, to zoning boards, to industry groups and to each other. And, of course, they present to prospective clients.

“When a group of our engineers stands up in front of a selection committee, they are being judged not so much on their abilities as engineers as on their presentation skills,” George Friedel said when, as head of sales for Parsons Brinckerhoff, he was helping stack up one of the most impressive win rates I know of.

“By the time the client gets to the short list, they know that each of the firms they are considering is technically qualified. They choose on the basis of which team will work with them best. At that final meeting, then, your ability to communicate effectively using entertainment techniques, is more important that your ability to engineer,” he added.

Spend enough years participating in the bake-off competitions for huge infrastructure projects that a firm like Parsons Brinckerhoff pursues and you will know this is true. It is equally true, though less obviously so, of most sales meetings that professionals have. The infrastructure engineering firms know what’s at stake and they do rehearse, sometimes well and sometimes not, but they do it.

There are many professional firms that prepare for an hour-long sales meeting in the ten minute cab ride to the client’s office. Or they will spend 30 hours of firm time preparing slides or a leave-behind document and not five minutes on rehearsing. They have all kinds of excuses:

• I don’t have time.
• There’s no time when we can all get together.
• I don’t learn anything from rehearsals.
• I don’t do well in rehearsals, but I’m great in front of the client.
• What’s to rehearse?
• I never rehearsed before and have done okay.

I have a response for all of these excuses. Say: “Okay, you don’t have to rehearse, but if you don’t win the business, you’re fired. You’re fired because you have been unprofessional and wasted firm time and money and were unwilling to do what it takes to minimize the chances of losing. You will have set a bad example for the others in the firm, and I must make it clear to all that what you did was unacceptable.” And if they don’t rehearse, and they lose, fire them.

Whew!! I feel so much better having gotten that rant out of my system! Could you visualize me letting him have it? How I whipped that office into shape! Oh, that felt good.

I can now focus on something more helpful to you. In next week’s posting on being prepared, I will describe what preparing for a sales meeting means.

(Sims Wyeth also discusses presenations in his post The Show in Business

Laura has met with more than her share of prospective clients, but been much less successful at getting them to hire her. There are several reasons for this, but the one that most urgently needs fixing is her discomfort in quoting a fee, which, of course, the clients pick up on. Her discomfort results from her doubts about being worth the rates her firm charges.

Laura is one of many professionals who have this problem. If a low-end competitor sometimes takes work away, justifying your fees to yourself gets even harder. And if you have no confidence in the value of what you do, it is hard to see why your client should. If you have this problem, it hurts you in two ways: it results in lost sales and reduces the size of your fee, when you win. This is the first of two postings on the subject

Because the problem is as much based in emotion as in logic, logic alone is insufficient to deal with it. But logic is a good place to start. We will come back to emotion in the second posting.

Step One is to keep your focus on the part of the economy you operate in. That others who do more worthy things than you earn much less than you do may at some higher level be unfair, but it is no reason to accept below-market rates for the work you do. After all, the more you earn, the more you can give to worthy causes.

Second, see if you can determine the value clients receive from your work, keeping in mind that there is no necessary correlation between the difficulty or originality of your work and the value received. Earlier in my career a colleague charged a client for a day’s billing at a rate that would probably be equivalent to $7,500 today, for which he reduced the costs of a client’s new facility by what would be more than $3,000,000 today. The client was exceedingly grateful, but so was the next one we provided the same service to, but at a much higher rate.

Anecdotal evidence that my partner and I collected from our clients ten years ago suggested we were under pricing our work. A few trusted friends with whom we shared our logic agreed, and we put through a twenty percent price increase at the bottom of a recession. A few prospective clients lost interest in working with us, but we still sold out every hour we had available.

And it is not, after all, our perception of the value of our services that ultimately determines the upper limit to what we can charge. It is our clients’ view. As an important step to determining what we should charge and getting our clients to accept it, we need to learn the value the clients expect to get from our work. Use questions to draw out estimates of savings or gains a prospective client expects to realize from your services. Often, this requires a series of questions to create a clear picture for both the client and you.

Questions to ask when value-pricing your services:

• What is this problem costing you this year?
• How much more is that likely to be next year?
• Do these costs include the opportunity cost of the time that your department spends on this issue?
• What would you be spending your time on, if you didn’t have to deal with the issues anymore?
• What would that be worth to the company?

Once you understand the value of a solution, use additional questions to determine why the client needs you to obtain it:

• You must have tried to fix this before. What happened when you did?
• You have a capable team, so why bring in outside help for this issue?

When you are done with the questioning, both the client and you should understand why you are worth so much. That will make it easier to ask for his money.

For more advice like this, please see Ford Hardings’ new book: Rain Making, Attract New Clients No Matter What Your Field, 2nd Edition

“Rain Making, in its new edition demonstrates its position as the single most sensible, accessible guide to building a professional practice…”
David Maister, author of Strategy and the Fat Smoker and co-author of The Trusted Advisor (with Charles Green and Robert Galford)

Larry Bodine as a good post on the Law Marketing Blog called Law Firm Requires New Associates to Have Sales Background.

My reaction is that there are many potential advantages to hiring sales attorneys. The history of this approach in other professions, suggests that there are a number of hurdles to overcome to make it successful. These include:

1) Making sure that the new position is designed into the fabric of the firm and not just glued onto the side. This means that everybody’s job is affected in some way by this new approach to business getting. A firm that doesn’t note this and educate its other attorneys is likely to suffer from at least two outcomes:a) Some attorneys will think that because someone else has responsibility for sales they can abandon most of their own efforts, b) Other attorneys will freeze the new sales force out in the belief that they own certain accounts.

2) Making sure the new position and the people in it are respected members of the firm. There is a tendency for professionals to feel that anyone who doesn’t practice the profession in the traditional way is an ineffectual, contentless dweeb. The best sales attorneys will not stand for this and leave. There needs to be a career path for these people that includes partnership and practice leadership.

Also, the more movement there is between the traditional career path in the firm and the new sales career path, the better, because it reduces the them-versus-us mentality that plagues dedicated sellers in professional firms.

Suzanne Lowe is conducting another one-minute survey for her upcoming book. The title of this survey is “Are Marketing and Business Development Functions Stuck in a Rut?”

The professional services marketplace is rapidly changing, but many professional service firms (PSFs) have yet to keep pace by evolving the functional scope of their non-revenue generating Marketers and Business Developers.

We’re told many Marketers feel they’re treated like ‘cruise directors,’ stuck continuously putting out non-strategic fires. Their Business Development counterparts feel stuck, too, in an incessant ’shut-up-and-get-me-a-meeting’ mode.

Take this survey if you would like to find out how your professional firm compares to other PSFs at working to evolve the functional scope of their Marketing and Business Development positions.

If you’re interested in the results of her first one-minute survey, see her blog post: Hiring fee-earners who WANT to Market and Sell.

With the publication of his first book, Managing the Professional Service Firm, David Maister established himself as the dean of the study of the business side of professional firms.

His later books (True Professionalism, The Trusted Advisor (with Charles Green and Robert Galford), and Practice What You Preach) have titles that reflect his increasing conviction that the solution to a firm’s business problems lies in focusing on clients and values. Pay attention to your professional calling and the business issues will take care of themselves, he argues.

His recently published book, Strategy and the Fat Smoker, continues and expands upon this argument. I think this book important enough that I have sent it to some forty leaders of professional firms. But your appreciation of it will depend on your frame of mind when you read it. It is a strange combination of how-to and polemic that the cynics, who make up a significant share of the world’s professionals, may have a hard time with. In his view of the professions Maister fights cynicism.

That is largely a good thing. The title summarizes the weakness in most firms’ efforts to become more professional; the managers are like fat smokers who know that they should eat less and stop smoking, but haven’t the will to do so. This is an apt comparison that applies, in part, to me and to many others. In making this point and suggesting how to address it, he provides many statements that deserve to become standard aphorisms:

The necessary outcome of strategic planning is not analytical insight, but resolve.

An expert’s job is to be right; the advisor’s job is to be helpful.

People will never live up to a higher standard than their manager exhibits.

There are many such jewels.

This quest for greater professionalism as a solution to a firm’s problems sounds idealistic. That may put off readers with a practical bent. If that includes you, I urge you to take another look. There are at least two good reasons for doing so.

First, the concept of professionalism is under threat. It has now become standard for product and service companies to operate professional firms. (Tom Peters recently blogged about this.) While some, like IBM, have succeeded, many others have failed, often because they didn’t understand the implications of running a professional firm.

Also, more and more professional firms are going public. This can force them to think more about shareholder value than professional standards. Some firms are getting so large that they must be managed in ways that put little stress on being truly professional. To avoid the fate of Arthur Andersen it is good for all of us to reflect from time to time on what “being a professional” means. Maister’s research shows that focusing on clients and values isn’t just good practice. It’s also good business.

The second reason why Maister’s idealistic promotion of a truly professional firm warrants attention will surprise the cynics: What Maister extols is achievable, if you adjust for his frequent hyperbole. I have worked in the professions for over thirty years and have had the opportunity to study many firms. At any given time in each profession there are a handful of firms that are doing everything right and growing by topsy. I have the pleasure of having one such firm as a client now.

These firms come as close to Camelot as one can get in the business world. They do interesting and important work for their clients. Growing rapidly, they offer ample opportunity for their professionals to advance. And the money that flows in allows them to treat their people generously. The professionals at these firms have the joy of doing cutting-edge client work, while building the institution of the firm and getting rewarded handsomely. The leadership seeks to build an institution that is more important than any individual partner because of what it does for the profession, for society and for the partners as a whole. These firms are wonderful places to spend at least part of one’s career. Maister shows how to transform your firm into such an institution. It is a worthy goal.

That Maister overdoes his argument is unfortunate, because some readers will reject his overall case as a result. His argument that simply acting professionally will resolve all problems is naïve, if he does, in fact, believe it. It is hard to argue otherwise, when he says things like:

Firms do not need to teach their people how to sell. They need to find out, person by person, what kind of work turns each partner on and what kinds of clients each person could actually get interested in. [Emphasis in the original.]

In other words, put them in front of the right clients for the right kinds of work and their enthusiasm will carry the day. Hogwash! Enthusiasm does increase a professional’s chances of making a sale, but I have seen many enthusiastic professionals lose sales, because they talked too much, moved to solutions too quickly, sold past the close or made any one of a dozen other common sales mistakes that a little training would have cured them of.

Extending Maister’s logic to its obvious conclusion, if you just give your people the right kinds of thing to work on, you don’t have to teach them anything. Enthusiasm is all they need.

This anti-sales attitude is probably a reflection of a long-standing bias that many academics (Maister is a former Harvard Business School professor) and some professionals hold against the subject of selling. As I have noted elsewhere, very few business schools, and none of the leading ones, teach anything about selling. Marketing, finance, and operations are all taught, but not sales. This is all the more bizarre, because it is a sale that defines the existence of a business. Studying business without studying sales makes as much sense as studying biological procreation while ignoring sex. Maister should know this. Professional firms are commercial enterprises. Selling is essential for their success.

Skim past the occasional lapse of this kind and you will find Strategy and the Fat Smoker a worthwhile read.