From time to time I have asked my colleagues at Harding & Company to submit posts on rainmaking.  Mimi Spangler  is now doing so regularly and has a fresh outlook which this old blog needs.  For these reasons, this will be a joint blog from now on with both of us providing content, separately and together.   Mimi brings many years of experience both making rain, herself, and helping others learn to do so.

By Ford Harding & Mimi Spangler

Over the years we have seen the leadership of many professional service firms frustrated by key account programs that don’t work.  There are, of course, many reasons that this happens, but one stands out: firms almost always start with too many key accounts.

A key account is one having such value or offering such potential to a firm that it warrants special attention.  Attention translates quickly into time devoted to the account by account team members, usually partners from a variety of practices and geographies.  The more key accounts a firm has, the more teams a partner is likely to serve on.

There’s the rub.  Partners at professionals must sell work, deliver services and administer the firm.  They are always stretched for time.  The more they are given to do, the more fractured their efforts become.  Assigned to too many accounts, they rationally devote their attentions to the one they are in charge of or the one or two where they see the greatest potential for their practices and ignore the rest.  As a result, many account teams lack the attention of key team members, so key relationships go undeveloped, opportunities to cross sell are missed and the account team falters.  Also, there is often a lot of finger pointing at those who let down a team that can cause lasting ill will, when the real problem is structural.

We believe firms fall into this trap, because management lacks the fortitude to tell a partner that his best client will not be designated a key account or to limit partners to membership on two account teams.  They pay for this weakness.

When Cortez landed on the coast of Mexico, he famously burned his ships before marching inland, focusing all attentions of his followers on the need to succeed.  Partners will always want to go after any account where they can make quick and easy sales.  Letting them do so, is akin to what Cortez would have done had he left his ships unburned, preserving retreat as an option.  If you want to focus time and attention on a client by making it a key account, you mustn’t make retreating from it too easy.

At some professional service firms, order taking is a common way to get business.  The client calls with no advanced warning and says show up tomorrow.  There is no competition and little, if any, fee negotiation.  Most litigation support firms get a significant share of their cases that way.  So do many valuation consultants.  Some kinds of legal services are also bought in this manner.  Firms that deal with emergencies, whether it be a client’s sudden, bad publicity or a need for a rapid environmental cleanup, are additional examples of those who often benefit from order taking.

It sounds like an easy way to get business.   But it isn’t.   In these cases the client feels a high sense of urgency and needs to trust the professional he hires.  This leads to a conservative approach to selecting a professional; the client is likely to go with the firm who did good work for him in the past.  That makes it hard to get new clients, including the new clients needed to replace old ones, who retire or cease to give you business for some other reason.  Firms or practices which get business this way run the risk of having too  much work with too few clients, exposing them to sudden revenue drops, if something happens to a key client.

Just as you would be unlikely to welcome a pitch from a watch repairman, if your watch was working, clients are often reluctant to spend much time with professionals who offer such services, when they don’t have an immediate need.  When they do, they are in a hurry to get help and don’t have time to expend much time researching alternatives.  The problem is compounded when the client’s need is confidential as well as being urgent, such as when a client knows his company is likely to receive some devastating publicity and doesn’t want the bad news to come out any sooner than necessary.

Effective selling of these kinds of professional services requires far more than answering the phone.  Rainmakers for these kinds of services typically select from three options:

• Public Relations:  They can seek publicity in order to increase the likelihood that prospective clients will stumble across their name when an event drives a need for their services.  This, of course, works best when the service meets two criteria:  First, it can’t be so confidential that the profession can never reveal work done and  client names and, second, it must have enough sex appeal to be worth of media attention.  For many years, I worked as a location consultant, helping companies pick locations for new factories, offices and research labs.  That service met both of these criteria, and we worked the publicity channel hard.
• Networks:  They can develop relationships with other professionals, who have early access to information about a client’s need for help.  So, for example, many turn around executives work hard to develop relationships with the workout specialists at bank and with bankruptcy attorneys.
• Developing Client Relationships: They find ways to develop relationships with clients in anticipation of the need, in effect making the sale before the need arises.  This works best when the client is likely to have intermittent need, such as a litigator’s periodic need for a jury selection consultant.  It is a hard route, given busy clients’ unwillingness to expend a lot of time learning about services they don’t have a need for now.  In such cases, the professional must link relationship-building to a client’s more immediate needs, for example, by providing training that will meet a client’s need for continuing education credits or providing friendship on the golf course.

When the phone rings and a professional selling such a service gets an order from a new client, it usually results from a lot of hard work.  Order taking isn’t so easy.

By Ford Harding and Mimi Spangler

Schmoozing is to networking what carbonation is to beer; you can do without it, but it’s bound to be flat if you do.  The definitions we have seen of the term are unsatisfactory.  It clearly is a way of conversing, though hardly casual, as one dictionary describes it, even if it may seem so.  It does have a purpose, though not solely to gain advantage, as another dictionary says, because often there is a give element, too.

We define it as low-key conversing on business and personal issues to give and gain advantage.  It is the conversational part of networking.  Done right, it is engaging, light, personal, caring, helpful and purposeful.  And it has undoubtedly been around since the dawn of commerce.  They schmoozed in the Hanseatic League, they schmoozed along the Silk Road, and they schmoozed before that in the prehistoric and early historic towns of the Fertile Crescent.

Schmoozing has had to adapt to technological change in the past. Today, much schmoozing is done by phone, though at some time in the past doing so must have seemed an oddity.  Tele-schmoozing became more frequent as the technology improved, phones became more common, and as telephone costs came down.

The rise of the internet has brought a new technological challenge to schmoozers.  To schmooze, you must converse, and conversing over what has in its early days been a largely asynchronous medium is hard.  And if you can’t schmooze over the internet, can you network over it?  Not effectively, we would argue.

The lack of easy synchronous communication still limits schmoozing on some social networking platforms, like LinkedIn, points out Elizabeth Sosnow, Managing Director and Social Media Lead at BlissPR.  But the ease of synchronous communications is developing rapidly.  Sosnow finds Twitter the preferred vehicle.  Starting from scratch eighteen months ago, she now has 4,500 followers on Twitter.  And she is generating leads from that source.

With advances in the technology, like Twitter and texting, that remove barriers to conversing, e-schmooze has arrived.  This is how it is done today:

• Information easily found on the internet serves as an enabler for e-schmooze.  Schmoozing is purposeful and it is easier to develop a purpose when you have greater access to information about your contacts.  For example, knowing in advance through Linked-In that Persons A, B and C are linked to Person D makes it easier and more efficient to have a conversation about D.
• Tweeting or texting contacts with bits of helpful news, congratulations and requests for information or advice provide starters for electronic conversations, just as they do when schmoozing face-to-face or by phone.  The advantage of the e-schmooze is the potential to start this conversation with many people at once, far more than can be done with the traditional schmooze, which requires calling contacts one at a time, or, at best, meeting with a small group.   This allows to e-schmoozer to out-network competitors.
• E-schmoozers then follow up with groups or individuals, depending on responses to a conversation-starter.
• As the e-schmoozer gets to know individual contacts through such exchanges, his conversations can become more personal and focused.
• E-schmoozing sometimes involves rapid exchanges that cover both personal and business issues.  These exchanges are more effective, if they sometimes meander between business and personal issues, just as voice conversations do, and if they involve humor and sincere interest in the other person.
• E-schmoozing works best if it is but a part of a wider range of communications, including voice and faces-to-face conversations.  Tweets and other electronic communications may first put you in touch with a contact and help you advance the relationship; the relationship will be stronger if you also eventually meet and talk by phone.

This is not rocket science, but are you doing it?  If not, the muscle the internet provides will allow others, more youthful and technologically sophisticated, to out-schmooze you.

Twice in recent weeks I have been told that no one makes phone calls anymore.  One person, who I will call Lenore, put it this way:

No one uses the phone just to stay in touch with old clients and maintain relationships anymore.  The phone is too intrusive, and clients prefer emails, which are more convenient for them.  They’re too busy to take calls.  Today, the phone is just for when you have something specific and important to talk about.

Is Lenore right in saying that the phone shall nevermore be used for staying in touch, schmoozing and developing relationships when selling professional services?  Or is this  just the latest in an endless list of excuses to mask call avoidance?

Professionals seldom debate sales ethics.  This is especially true during the hot pursuit of an opportunity, when there is pressure to make quick judgments about what claims to make. 

A prospective client asks how well a professional firm knows banks.  One of the firm’s professionals answers, “Quite well.  Over a quarter of our revenues came from the banking industry last year.”  If she had been given  the chance to speak first, his colleague would have felt compelled to say, “We have only worked for one bank, but it was our largest client last year.”  Both statements are accurate, but they leave a prospective client with quite different impressions.  The professionals make different choices in the tradeoff between accuracy and precision, a subject which I have discussed elsewhere.  

Here I address the problem of discussing what is an ethical answer.  The two professionals didn’t debate the subject in advance, because they didn’t know the question would be asked.  And they will probably also avoid the discussion later, because the answer by then is a fait accompli.  If Professional One knows that Professional Two would reject his answer, he will probably think her prudish, while Professional Two feels that Professional One’s choice of words is unprincipled.  Recognizing that accusations, whether spoken of implied, about a colleague’s prudishness or lack of principles is likely to turn ugly, they simply don’t talk about it.  The more senior person gets his way.  Or the one who speaks first sets the standard.  That isn’t the way to resolve ethical concerns.
 
I am not arguing for either answer here.  Professional One may realize that his, though true, is potentially misleading, but believe that a little finessing is as acceptable in selling as bluffing is in poker.  Professional Two may feel that anything short of the barest truth is dishonest.  Both are defensible positions and do not necessarily reflect a lack of integrity by either professional. 

Note that different clients might respond differently to the two answers, were they to know the whole truth.  One might be a bluffer, herself, and appreciate good bluffing in selling, as much as she does when playing poker or buying something at an oriental bizarre.  She may feel that the first answer proves the savviness of the professional, a trait she may value.  Another buyer might feel he has been betrayed if told anything short of the starkest truth. 

My concern is that if the issue is not discussed, it leads to permanent misunderstanding about what management considers acceptable sales behavior and what is not.  In the absence of that discussion, the bluffs may get bigger to the point that they become bald lies.  (The professional claims that his firm worked for fourteen banks when it has actually only worked for one.)  And the true statements can become more and more detailed, to the point that they never put the firm in a good light.  (The professional not only states that the firm has only worked for one bank, but then adds four reasons why that case is not relevant to the one at hand.)  I have seen both occur during my career and both are destructive to a firm’s reputation and its ability to get business.  They inhibit the firm’s ability to develop a unified sales culture.

To avoid this, I suggest the following:

• Openly discuss appropriate sales behavior from time to time, but focus the discussion on developing appropriate standards for the firm, rather than on accusations about personal morals, sophistication or attitudes.  Talking about standards helps depersonalize the conversation.
• Welcome discussions of sales standards when someone else brings up the subject, regardless of how cautiously.
• Recognize that, while we can all agree that there are standards that are unacceptable, it is legitimate and probably good for the firm for people to believe in different standards, because firm standards should be challenged from time to time.
• Make it clear that the firm has standards that it will hold to, even if doing so requires reprimanding a senior person.  Make those standards clear. 

If you are uncomfortable discussing sales ethics or clearly stating firm standards, that, by itself, should be cause for reflection.

At any networking event we risk getting stuck talking to one individual who would keep us there all night, if we allow it.  I will call this person Lizzie Boredom.  If you spend too much time with her, you lose the benefits of having come to event in the first place.  We need to move away from her as quickly as can be done politely.  At all costs, we must get away before we are trapped into sitting next to her through the entire dinner that follows.   Here are some ways to escape her:

The Old Standby

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, Lizzie.  I need to refresh my drink.

The Socially Connected

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, Lizzie.  I see someone who I have been trying to reach for a week and I must go talk to her.

The Desperate

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, Lizzie.  Before dinner starts, I simply must find a restroom.

The Devious

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Oh, John, come over here for a second.  You should meet Lizzie Boredom.  Lizzie, this is John.

John:   It’s nice to meet you, Lizzie.

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Excuse me, you two.  I see someone I must talk to.

The Deceptive

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You (after subtly punching the speed-dial number for your own cell-phone):  Excuse me, Lizzie, but that’s a call I simply must take.

The Direct

Lizzie Boredom:  Blah, blah, blah, blah, blah . . .

You:  Well, Lizzie, I’ve enjoyed talking with you, but must circulate to see some other people before the evening is out.  I look forward to seeing you again at the next of these gatherings.

We have all had to deal with anti-sponsors, people in a client organization who don’t want you to get work at their companies.  Dealing with them tests a professional’s rainmaking prowess.

One rainmaker I know advises his people to “nuke’em,” by going to their bosses and pointing out that they are obstructing progress.  I have no doubt that this man does just that and does it successfully.  It’s not an approach for all professionals in all situations.

My colleague, Gary Pines, a proven rainmaker, took a different approach with an anti-sponsor, whom I will call Marie, who was blocking our chance to work at an old client.  For some reason, she took a dislike to Gary and Harding & Company.  We are not sure why, but perhaps it was because on our original assignment we were brought in by the Managing Partner of her firm, without Marie’s knowledge or approval.

Whatever the reason, she was trying every tactic she could to make sure we got no more work.  She said that the members of the committee she was working with didn’t want us, though we knew from moles on the committee that this wasn’t true.  She said that we were more suited for a small piece of work, awarding the larger share to a competitor.  Even when the competitor failed to produce results, she continued to resist hiring us.  She threw up barrier after barrier.

Gary, a cheerful, likeable, gentlemanly person, might have been able to nuke this anti-sponsor, because of his relationship with the Managing Partner and several key committee members assigned to selecting consultants.  Instead, he chose to win her over.  Over the next eight months he wore away her resistance.

He remained irrepressibly sunny and helpful to her.  He included her in most of his communications with the firm, demonstrating that he wasn’t trying to go around her.  He was helpful above and beyond what was required, in spite of her sour responses.  During one meeting with her at which she was raising objection after objection, he leveled with her, saying, “Marie, somewhere along the way we got off on the wrong foot with each other.  I don’t know why or how and I don’t care.  From today, as far as I’m concerned, we’re starting fresh.  I want to work with you, I want to help you and I want you to be a success.”

She absorbed the message without comment, but from then on things began to change.  In communications with others at the firm, Gary made a point of mentioning Marie positively, if she provided him even the remotest excuse for doing so.  He stayed in touch with her and continued to be positive, polite and helpful.  And he wore her down.  Today, she is a strong sponsor for Gary and our firm.

Turning around an anti-sponsor is one of the toughest challenges a professional can face.  It takes emotional intelligence and maturity to resist taking personal affront at someone like Marie and to do what Gary did.  It also takes a lot of hard work.  But the return on the effort can be huge.

A reader has ask for help with pricing work for friends.  He writes:

I am finding that I will probably be doing an increasing amount of business with long-time friends whom I have known long before we entered a potential client-consultant relationship. I have found it difficult to pursue value-based pricing in these circumstances. Some of these people work for larger public companies, while others work for private ones.

I don’t let friends walk all over me, but I am not sure if I am in a minority when it comes to both my discomfort and (perceived weaker ability) to charge more premium fees. I have often internally used a concept of “fair” pricing or “customer means-based” pricing (what customer can afford), but I have not seen this widely discussed.

How should I be pricing work sold to friends?

Last month in behalf of a reader I posted a Rainmaker Problem, requesting suggestions about how to make a referral.  A couple of readers responded with good ideas, but not many, probably because you were busy with pre-holiday activities.

The subject is an important one, so here are a few suggestions for requesting referrals:

• Pick the right moment.  There are times when you are much more likely to get the help you want than others.  This was the subject of an earlier post, so I will not repeat that discussion here.
• Make it easy for the client to help you.  Broad requests, like Would you consider referring us to others who might need our services?, may get yes for an answer, but they place a large burden on the client to figure you who might be a good contact for you and how to bring up your services.  That’s why they so often produce no result.  You can make it easier for the client by:

1. Being specific:  A request for a referral to the CFO or head of the Consumer Products Division or someone in a senior position at Trigestis Pharmaceuticals is much easier for the client to focus on than a broad plea for help.  Alternatively, you can ask for an introduction to someone with a specific issue with words like Can you think of anyone you know who might also be facing executive succession problems? or Do you know anyone else who handles insurance recovery problems for his company?
2. Make it clear that you aren’t asking too much.  The open ended request for introductions can, and often is, perceived as asking for access to all of a client’s contacts.  That can be off-putting.  Be clear that you aren’t asking for too much.  One rainmaker I know would ask if a client would be willing to make introductions for him and when the client agreed, would follow up with these words:  Could I make a suggestion?  Would you be willing to scan through your contact list and note down ten or a dozen people you know who might benefit from our services? After you do that, we could sit down and talk about them and, together, pick out one or two to target.  If you are uncomfortable with that language, try these words:  Thanks.  That’s awfully kind of you.  Even one or two introductions would be a big help.
3. Provide some language that the client might use when making the introduction.  This saves the client time coming up with the right approach and makes him more effective at getting you in the door.  You can use words like these:  We find that people dealing with international litigation often respond well when someone says, “If you even need a rock-solid, expert witness on transfer pricing issues, you might want to talk with Brenda Smith.  She helped us on . . .” Or you can help your client filter out good introductions form bad ones with words like We find that if you ask someone if they are interested in green design and that they say they are, it is easy to get them to agree to a meeting with us.

• Don’t put the client on the spot.  Show that you recognize that the client many choose to back away from an introduction with words like Timing is everything, so if you bring up the subject and feel that this isn’t the time to introduce us, don’t even try.  I trust your judgment on this completely.  This is especially important if the client shows even the slightest hesitation about making a specific introduction.  Asking for advice rather than an introduction is another way to reduce pressure:  I want to meet Joe Smith.  Do you have any suggestions for the best way to do that?
• Keep the client informed about what happens.  Always notify the client about how the introduction went, whether or not it was a success.  If the introduction turns into new business for you a year later, it is still important to let the client know what happened, because it shows you acknowledge the help he provided, and so reinforces the behavior.
• Be thankful.  This should be done whether or not the introduction is successful.

Do any of you have additional ideas?