Want to Succeed in Consulting? 3 Ways to Get Paid for Your Wisdom
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By Tom Searcy | September 13, 2011
Through writing this blog I recently made a friend all the way over in Jakarta, Indonesia. Ben Whitaker is a U.S. expat and reader who is running a company focused on selling high-end IT services to the mining industry.
Here’s what Ben wrote to me:
One topic I’m concerned about is my current strategy of doing analysis and recommendations as a proposal, then seeing that 4-page document get sent out the door by the prospective client as more or less an RFP to my competition.
Have you written a piece about that? Or transitioning from selling implementations to selling analysis and recommendations only?
OK, how many of us have had to deal with the problem of free consulting that Ben’s describing? Judging from the comments I get from my reader base… it looks like just about everybody.
In the world of selling expertise, you must show your expertise first in order to prove that someone should pay you for it.
Ben is describing a really thorny, but frequent challenge. Here are my basic thoughts:
1) Create a custom, self-branded assessment process. For example, we built one for a client in the advertising industry services business called, “The 6 Facets of Brand Exposure.” Under each of the facets were 3-5 best practice clusters, which covered about 25 categories of evaluation. This process produces a final report that evaluates the company’s brand exposure process, (substitute your area of expertise) by category and ranks the company in top quartile, bottom quartile or the other two quartiles of performance against their competitors. Based upon the wealth of my client’s experience, he set the standards of what the quartiles are, what they mean, what is considered best practice for the industry. It’s somewhat arbitrary, but these rankings typically go unchallenged.
2) The assessment is valuable and therefore carries a fee. We develop the evaluation and offer three types of recommendations:
Strategies that the company receiving the report can implement themselves without assistance.
Strategies that will require an outside technology or resource to implement, but not one provided by my client.
Strategies requiring the hiring of my client to implement.
This creates the strong sense that the recommendations have stand-alone value.
3) The assessment tool usually requires a broad base of interviews, observations, and data transfer. This gives my client access to people, opinions, and relationship-building time, all of which increase the potential of getting hired for implementation later.
I always insist that the assessment come with a fee proposition. As my client explains to his/her clients, “If you don’t pay for the ideas, you won’t value them or implement the ones that you can implement yourselves.”
One of the real tragedies of consulting is that your clients hire you for your wisdom, but they pay you for your transaction. For this reason, even if you are in the wisdom business of providing your assessments and ideas, the real money is in the implementation. That does not mean, however, that you shouldn’t be paid for both.
In my subsequent exchanges with Ben we mapped out some additional guidelines for delivering this. They include:
Give your prospect a sneak peek of copy of a finished assessment from a non-competitive engagement, but never leave it.
Give the prospect a sneak peak of the information capture tools, (questionnaires, punch lists, assessment tools), but never leave them.
Leave a copy of the assessment requirements with them. This includes a list of the people you will need to meet, the materials to which you will require access, the basic schedule for the assessment process.
Establish the date of delivery of the assessment, (in person, by presentation with supporting documentation).
Never send completed documents of the assessment without the ability to provide an executive summary face-to-face in a presentation format.
Ben’s going to do very well with this — he’s already gained traction on a few very large accounts to add to his current customer base. The difference now is that if they won’t step up with the fee for the value-providing assessment, he knows that they are not serious in their consideration of what his expertise can bring and they are milking him for free consulting.
MY THOUGHTS
Unfortunately, some companies do make 'milking cows' of work at home entrepreneurs who provide consultancy services. They request for proposals without the serious intention of getting into a project with the consultant. They just want a 'free meal', getting ideas as to the recipe and then do the cooking themselves. Frustrating, to say the least. If you're a work at home entreprenuer who provides consultancy services, better get cracking with those assessments.
