Recent surveys on the problems facing consultants have tended to concentrate on the supply side. Demand for work, whether from local issues such as Y2K and EMU or simply the rapidly gathering pace of change facing clients has created something of a sellers’ market, and attention has focused on such issues as the retention and development of staff.
Winning, keeping and profiting from new business has taken a bit of a backseat, but it is high time that these issues came back into the spotlight.
First, no boom lasts for ever, and consultants will soon have to compete more aggressively in the marketplace. Second, changes in the world economy are whipping up the competitive mix: convergence and globalisation mean many firms are crossing both borders and industry boundaries in the search for new markets. Third, this is a concern even for firms which are successful on their own terms: pitching for business is expensive both in terms of cash laid out and the opportunity cost of valuable staff, and wasting time on unsuccessful pitches eats into margins. Finally, even while demand remains strong, many firms are “maxed out” in their existing customer base and need to break into new markets to grow and develop.
Last summer, Policy Publications conducted a survey of best practice in over 3,500 firms in the professional services arena. A high level of response enabled us to look at each profession separately, and using a simple, but we believe unique, methodology, we were able to separate the replies on the basis of how successful they were at winning new business.
Thus we were able to compare and contrast the attitudes and behaviours of those at opposite ends of the spectrum.
We found some striking differences: it was almost as if the survey provided us with personality tests of two very different kinds of consultancy practice: one outgoing, eager, keen to differentiate itself and to learn, the other reactive, slow and taking what came along.
The results, unfortunately, confirmed some long-standing cliches about management consultants – experts in consulting and their technical specialisms, but relative ingenues when it comes to the management and promotion of their own businesses. Consultancy are, particularly, relative newcomers to marketing techniques: they are still, in the main, uncomfortable with “sales” in all its forms. However, some firms have actively embraced the disciplines of marketing with dramatic results on their performance in pitches.
These differences became clearer as we tracked the research results through the various stages of the bid process. We found that the differences between the more successful and less successful firms narrowed as we looked at later and later stages of the bid. It seemed that most consultants were relatively happy once they got down to a shortlist of two or three, and could perform well in this context. However, they were left for dead when it came to the number of opportunities they received to bid.
This gives the first key lesson of the report: most successful consultants get it right from the start, making sure that they are as attractive as possible to clients and that they understand and communicate well with potential clients.
Our more successful group gained this head start in a number of ways: they were better at getting new projects from existing or previous clients, and in particular they were three times as successful at getting business via referrals than the other group.
Although (we would hope) everyone in the business is aware of the importance of networking, more successful firms place more emphasis on active networking.
They are more likely to actively seek projects from clients and to identify contact building as a specific business building activity. They also produce more marketing materials to send to clients and to research what potential clients are up to in the marketplace. Moreover, they are twice as likely to indulge in the hated activity of cold-calling – although it has to be said that this wasn’t a popular activity with many consultants.
One respondent commented: “I’m not surprised people don’t like cold calling: it’s hard work! We follow the industry press, see who’s been promoted, badger him, call his secretary. That’s how you get new business – you can’t just sit around waiting for it to come to you.”
The importance of keeping in touch is demonstrated in our case study of how French Thornton won an assignment to help a large government department work with its IT suppliers. The partner concerned, Tim O’Leary, had maintained his contacts with this department in his two previous jobs, which gained his firm the initial invitation to bid. But from then on the firm were committed to a nine-month public sector tendering process. “People sometimes don’t take them seriously,” says O’Leary. “They just put out a boiler plate document.”
Opportunities to bid are rare, and should be seized upon: “When you’ve got a half open door, hurl yourself at it.”
French Thornton’s success here illustrates another key finding: the need to differentiate and show commitment at every stage of the process, right from the initial invitation to bid.
Too many firms, it appears, trundle through the opening stages of a project, making little effort to distinguish themselves from the herd and therefore standing rather less than a statistical chance of getting the business.
As opportunities to communicate with clients are limited during the bidding process, understanding the clients and communicating well with them is another key factor. The most successful clients are especially adept at putting the client at the centre of the universe, making the client’s problems the focal point of any discussion rather than spending valuable contact time extolling the virtues of their own firm.
This point comes into sharper focus when it comes to the infamous “beauty parades”, where teams from the shortlisted rivals line up for a day of presentations. More successful firms put far more emphasis on adding value to the pitch with specialist knowledge: of the subject in hand, from previous pitches, and, crucially, of the client itself. In the survey, more successful firms were more than twice as likely to include a consultant on the pitch team who had specialist client knowledge.
Another key factor that emerges is including team members who will work on the project in the pitch team. That consultants frequently don’t do this has been such a classic client gripe for so long that one would have thought the message would have got through. Yet only 40 percent of our less successful group considered this “very important” to a pitch, compared to over 60 percent of the successful group. Even this last figure is worryingly low.
The ability to field specialist knowledge with team members who can honestly respond to questions beginning “what will you do…”, is a solid foundation for an aspect of pitching all respondents agree is important: allowing enough time for questions. A good pitch is a conversation, not a lecture, and good pitchers are able to react flexibly to clients: “If I’m not interrupted during the pitch I feel dead,” said one respondent. Surprisingly, however, few consultants placed much emphasis on rehearsing their pitch beforehand, even though presentation experts agree that this is a surefire weapon against nervousness and can actually help with responses to spontaneous questions. It is not uncommon for consultancy pitches to include “virtual” members. One of the case studies in the report shows how Felard Barnato Ingle, using the resources of the Richmond Group, put together a virtual team that helped a client win a market-testing bid.
Rehearsal was key to making sure that each team member was clear about their responsibilities. “At the presentation we made sure that each of us highlighted what our skills were,” says Mike Barnato. “We played to our strengths.”
As important as rehearsal is review, which brings us to the final point to highlight from the research: the importance of learning. More successful consultants were far more likely to review all aspects of a bid once it was over, whether it was successful or not. Consultancies showed a slight preference for reviewing unsuccessful bids, though as one firm pointed out, you can often learn more from a successful bid, as you have better and more open access to the client. And it is important that reviews of unsuccessful bids are not exercises in excuse-seeking or mutual recrimination.
The benefits of honest reviews are patent: one firm got its hit rate up to 65 percent within three years of instituting a formal review process.
In summary, our research has shown that not only are there startling differences in performance in winning new business, but that all consultancies have something to learn in this area. In its ongoing research into this topic, Policy Publications will be offering firms the opportunity to benchmark their performance against the research database, and create an action plan of learning points for the future.
Mick James is a freelance business writer.
Winning New Business in Management Consultancy: the Critical Success Factors is available from Policy Publications, price #195. Tel no: 01234 328 448,
Fax 01234 357231, email: firstname.lastname@example.org.
Barclays has partnered with accounting software company Xero to provide businesses with access to transaction data through its direct feed.
Government's estimate of a £400m admin saving from Making Tax Digital is way off - and is instead a huge cost burden, warns Lamont Pridmore chief executive Graham Lamont
Xero unveiled its expanded global partner programme at Xerocon South, the accounting technology conference in Australasia
Accountancy software firm Sage has been hit by a data breach which may have compromised the personal details and bank account details of as many as 300 UK businesses