|
This
Month's Featured MasterMind: Andrew Sobel on the Secrets
of Making Rain
 Andrew
Sobel is a leading authority on client relationships
and what it takes to earn long-term client loyalty.
His latest book is Making
Rain: The Secrets of Building Lifelong Client Loyalty.
He is also co-author of the bestseller Clients
for Life: How Great Professionals Develop Breakthrough
Relationships.
He has been featured in a variety of national media,
including USA Today, Investors
Business Daily and Consultants News,
and he has appeared on a number of national radio and
TV programs, such as ABC's World News this Morning
and CNN-fn's For Entrepreneurs Only.
Sobel was a senior vice president and managing director
for one of the world's largest management consulting
firms. He has spent twenty-two years advising senior
executives in thirty countries.
MCNews: In today's market, some people say that
client loyalty is a myth. Do you agree?
Sobel: I don't think client loyalty is a myth,
even in this tough market. The reality is that many
clients are working with consultants to whom they are
extremely loyal. In fact, I believe there is a client
loyalty formula, which my new book describes in
detail.
To understand what drives client loyalty, you have
to look at why some clients, even in a very competitive
market, continue to be loyal to their best consultants.
In my research, I interviewed corporate executives and
CEO's to find out what characterizes the consultants
they stick with through thick and thin, and why.
What I learned is that client loyalty boils down
to three basic factors: first of all clients in
this market are loyal to people who continue to add
tangible value; second, they are loyal to the people
with whom they have built trust; and, finally, they
are loyal to the consultants who go the extra mile for
them, who really care about them as clients.
These ideas may sound simple, but each has subtlety
and complexity.
MCNews: How would you define tangible value?
Sobel: In terms of adding value, you have to
go beyond the core value of the contract, beyond what
the client contracts with you, the consultant, to deliver.
That core value could be cost reduction, a new marketing
strategy or re-engineering the supply chain, for example.
But, there is something more that I call surprise value.
Client loyalty increases when you add value in ways
that clients don't expect, when you make them aware
of problems and issues that perhaps they didn't even
know they had. So maybe you are hired to do a cost reduction
project, but you end up making some insightful recommendations
about organizational structure. You see the big picture
and keep your eyes and ears open. You bring clients
surprise value and they say, wow, that was really helpful.
MCNews: Do you think consultants put enough emphasis
on surprise value?
Sobel: Some consultants don't deliver much surprise
value because they are content to do what Tom Peters
calls a thoroughly professional job, but no more. To
me that shows a lack of creativity--the client has hired
us to do X, and we are going to do it. I also think
that a lot of consultants don't provide surprise value
because they are, in my terminology, the classic expert
for hire, rather than a client advisor; they hew too
narrowly to their specialist expertise.
Clearly, you've got to stick to what the client hired
you to do. You don't go in there and say well I am here
to do everything. But there's a value mindset: I am
hired to help my client reorganize and I am going to
do a great job at that, but my overall outlook is, how
can I help this client in whatever way possible?
MCNews: Are there other kinds of value that a consultant
can add?
Sobel: Yes. Consultants should add personal
value. Every client who works with a consultant has
a personal agenda. I don't mean that in a Machiavellian
sense, but clients have hopes, goals and fears, and
we need to understand their agenda.
For example, a client may want to learn some specific
methodology from your firm, or have you come in for
a day and showcase some best practices. Another client
may have a relative who is interested in going to your
alma mater, so you agree to lunch and do some college
counseling.
Some clients like to feel important. When they call
your office, they want to be recognized by your support
staff. This might seem trivial to you, but it might
be important to a client. I think we always have to
look at the personal goals, ambitions and hopes of our
individual clients because we may be able to provide
them with that personal value.
The total package of value goes way beyond whatever
contract you sign with clients. When clients look
back at consultants they have worked with, they won't
necessarily be able to articulate it terms of added
surprise value. But they might say, not only did you
do a great job at cost reduction you also really helped
us think though implementation.
We glibly talk about value added and exceeding expectations,
but to drive client loyalty, you need to break down
and understand the specific value that clients derive
from working with you.
MCNews: What role does trust play in improving client
loyalty?
Sobel: In interviews I did for the book, I noticed
a shift in tone compared to three or four years earlier
when I was working on Clients for Life.
Many corporate executives I interviewed said trust
is paramount, and that they felt let down, disappointed
by the false promises and claims about products and
services in the late 1990's.
People feel uneasy about all the corporate scandals,
which involved not just corporations but service providers,
accounting and consulting firms. They are concerned
that professionals may not be representing themselves
properly.
Executives have been telling me they only want to deal
with outside professionals, including management consultants,
who adhere to the highest ethical standards, who have
the highest level of integrity.
So clients want to work with professionals who represent
their capabilities honestly. They also want you to care
about their work and their organizations. Trust has
always been incredibly important, but I think it's even
more important in the current climate of uncertainty.
MCNews: One thing that can increase clients' trust
is to reduce their risk in working with you. Any advice
for how consultants can reduce a client's risk without
sacrificing profitability?
Sobel: Think creatively about reducing a client's
uncertainty about working with you. One simple thing
is over-investing upfront in face time with a client.
Instead of the usual--they call you and ask for a proposal,
you go to a meeting, write the proposal and send it
to them--invest in more meetings and more face time,
because familiarity breeds trust.
Secondly, use flexibility in structuring projects and
pricing. I don't recommend discounting as a strategy,
but be flexible. For example, take a large project and
break it down into pieces with checkpoints for each
piece.
Another way of reducing a client's risk is through
references and testimonials. Sophisticated clients often
do a good job of checking references, but the more references
and testimonials you can give a client the better.
I frequently ask clients for testimonial letters, just
a couple of sentences talking about the work I did with
them, whether it was a workshop, a speech or a consulting
assignment. I'll ask if they mind if I share these with
a perspective client, and they say sure. Sometimes I'll
get an inquiry from a company and maybe they're not
sure about taking the next step. I'll email them scanned
copies of a couple of letters and say here are some
testimonials from clients in your industry that I worked
with in the last year.
MCNews: You said that client loyalty improves when
the consultant goes the extra mile. Can you give some
examples?
Sobel: For one client, going the extra mile
could be the fact that you returned from your vacation
a day early to attend a critical meeting; or the client
might know that you and your team worked all weekend
to get something out for a board meeting; it could mean
that they know you put in some extra work and you didn't
come back to them with the usual change order. The
extra mile is the client's perception that when the
chips are down, when I really need these people, they
will be there for me.
We can teach people how to add value and about the
mechanics of building trust, but no one can teach us
to really care about clients, to be willing to go the
extra mile for them. That's a mindset, almost an emotion,
and it's really important to clients. Going back again
to the late 1990's, there was so much demand for professional
services that people were turning down clients left
and right. I know consulting firms, PR firms and law
firms that were starting to treat clients very offhandedly.
That attitude is coming back to haunt us. We aren't
sitting at the fax machine waiting for the orders to
come in these days.
MCNews: Changing to another subject, do you think
consulting relationships pass through stages?
Sobel: Yes, I think they do. In the book, I
talk about four stages for consultants to assess where
they are with clients. I call stage one breaking through
with a client: The client has a problem and views you
as an expert who can fix it; you have anywhere from
three weeks to six months to prove yourself. You have
to ask yourself what you need to accomplish in that
proving period for clients to pull you into their trusted
inner circle of advisors. Obviously, the core of breaking
through is that you've got to do great quality work
on the specific task they have asked you to address.
But, to me, that just gets you in the game.
MCNews: Any tips for how a consultant can break
through with a client?
Sobel: Sure. A classic way is to reframe their
issues. The client says I've got an organizational problem
and, after analyzing the situation, you say no, you've
got a strategy problem, or the way you have defined
the issue isn't the most productive way to think about
it.
Speed is another way you can break through, speed and
responsiveness. Move faster, get it done faster than
the client had imagined was possible.
Creating an emotional bond with the client is also
important to break through. Instead of having that
arms-length-expert-for-hire relationship, really connect
with the client using your powers of empathy. I
have had consultants tell me that a relationship with
a client didn't really start until they had their first
big argument. You've got to make an emotional connection
with the client. Otherwise, you are just a vendor.
Providing unique information is another way of breaking
through. That could be information about the market
that the client hasn't seen before, or it could be information
from your proprietary database. You might know some
key players in the industry and are able to provide
intelligence to your client.
So in the early stages of a relationship, you demonstrate
that you will do more than just perform on the deliverables
and add the core value.
MCNews: Are there new objectives after breaking
through?
Sobel: You want to move from being a steady
supplier--doing one project at a time--to become part
of the inner circle. Just because clients give you projects
doesn't mean they actually care that much about you
or that you are privy to their innermost thoughts and
issues. You can go along for years in a steady supplier
relationship. The margins might be good and it keeps
people employed, but there isn't a lot of soul to it
because you're not really connecting at a high level
with clients.
To grow a relationship from being just a steady
supplier to something more, you need to get smart about
networking with buyers in the organization, as opposed
to just investing time on the project itself. Once you
are working with a client, you have a great opportunity
to get to know those other buyers.
You have to look for ways to help your clients with
additional, broader issues. So the goal is to grow relationships,
as opposed to being complacent and just being fed projects,
which many consultants seem happy to do.
MCNews: Once you've established strong client connections,
what's the next challenge?
Sobel: The next challenge is to keep relationships
alive over multiple years. There is a complex stage
of a relationship that I call sustaining, and it applies
equally to past and current clients.
A famous Jesuit priest in the 1600's named Baltasar
Gracian used the phrase brand-new mediocrities,
which fits the situation some consultants face. Gracian
said that it's human nature to crave variety. Sometimes
when people get to know you too well, they get tired
of you and become open to brand-new mediocrities--others
who aren't as good as you, but seem newer.
I have a simple rule to head off the problem of brand-new
mediocrities: you have to treat every old client
like a brand new client; you must go to even the
100th meeting with a client with the same enthusiasm,
the same freshness and creativity that you had for the
first meeting. When you were wooing the client, you
were at your best. If the client senses 100 meetings
later that you are getting complacent, that you're not
coming up with many new ideas, that client may be more
open to replacing you with someone else.
MCNews: Many consultants struggle to keep up with
former clients because they're so busy serving current
ones. How can consultants stay on their former clients'
radar screens?
Sobel: Consultants tell me that staying on the
radar is one of the hardest things for them to do because
the day-to-day pressure of delivering on current work
is so high now that to make time for the letters, calls
and visits is very difficult.
McKinsey & Company consultants understood this
issue decades ago. They were among the first consultants
to really focus on sustaining relationships, getting
out there every three to six months, having dinner with
past clients and staying on the radar screen.
A client might have worked with you five years ago
and really liked what you did. But when a new problem
arises, if he hasn't talked to you in five years, it's
human nature for him to pick up the phone and call the
guy he had lunch with three months ago.
I recommend that you make a core list of the relationships
you want to sustain over time. The number will be
different for each consultant, but maybe it's ten, twenty
or fifty core people that you talk to, visit or send
articles and books to once or twice a year.
Then you have your non-core group, which might be 100
or even 1000 people, and maybe you send a Christmas
card or your newsletter to those people. All that is
part of sustaining relationships.
MCNews: What's the fourth stage in client relationships?
Sobel: The fourth, or final, phase is what I
call multiplying, which is about how you get your best
clients to help you grow your business and to expand
your ideas and influence. Multiplying involves some
simple things like asking for referrals and introductions,
being proactive. A lot of us are very shy about doing
that.
I think we are afraid that we are going to ask a client
and they are going to look at us and say what are you
crazy? As an example, I worked with one consulting firm
that decided to initiate my suggestion to call past
clients. I said if all fifty of you each call five past
clients that's 250 phone calls, and who knows what might
come of it. They said, yeah, that's a good idea. When
I checked back six weeks later, nobody had made one
call!
So we had another workshop and I said let's pour our
hearts out--why hasn't anyone made a call? We wrote
up all the reasons on a flip chart: I don't know what
to say; people are going to hang up me; people will
think I'm trying to sell them something; it's going
to be awkward; why would they want to talk to me?
After some role-playing, people realized it wasn't
so bad and they starting making those calls. And, they
brought in a bunch of new business. You may get a brush-off
from ninety-nine people you call, but all you need is
one person who says yeah we could use your help for
the effort to pay off.
MCNews: Last question--are you reading anything
interesting these days?
Sobel: I'm usually reading about five books
at once. One is Aligning
the Stars by Jay Lorsch and Tom Tierney.
It's about how you motivate people in professional services.
Another interesting book I've been reading is a biography
of Leonardo
Da Vinci.
MCNews: It was great talking to you. Thanks for
your time.
Visit Andrew Sobel at www.AndrewSobel.com
to learn more about his books and check out his free
newsletter, Client Loyalty, and other
services.
top
of page ^
TechWatch:
Emerging Technologies That Will Change the World
New technologies seem to burst from the
lab into the marketplace so quickly these days that
it's easier than ever to get caught off guard by innovations
that impact your clients and your practice. To stay
a step ahead, the best consultants keep one eye on the
present and the other on the future.
So, when people at MIT talk about what's on the horizon,
my ears perk up. In the February 2003 issue
of MIT's Technology Review, editors
highlight ten emerging technologies, and the
people behind them, that will fundamentally
change the world in a few short years. It's
no surprise, but there are some exhilarating
new possibilities just around the corner. Have
a look
.
Meet
the MasterMinds: Harry
Beckwith and What Clients Love
 Harry
Beckwith is recognized for his marketing expertise and
as a speaker and teacher on marketing and customer relationships.
Author of the Business Week bestseller
Selling
the Invisible and The
Invisible Touch, Beckwith is the founder
and director of Beckwith Partners, a positioning and
branding firm whose clients include Microsoft, Merck
and Hewlett Packard.
top
of page ^
Test Yourself: Are
You a Trusted Leader?
A MCNews subscriber alerted me to an intriguing
new book, The
Trusted Leader, by Rob Galford and Anne
Seibold Drapeau. The book zeros in on what leaders can
do to build, maintain and repair trust among people
across their organizations. If you pick up the February
2003 issue of the Harvard
Business Review, you'll find the authors'
article, "The Enemies of Trust,"
which is adapted from the book.
The web site for the book includes a clever self-assessment
tool you can use to become (or remain) a Trusted Leader.
Some of the questions may seem, at first blush, to have
a "right" answer, but don't be fooled. Many
of the questions are intended to make you reflect, or
to encourage you to hear the views of others who can
provide an objective response.
The test, which takes only a few minutes to complete,
has twenty multiple-choice questions grouped into four
sections. Take the test by clicking here.
top
of page ^
This
Month in History
Chinese New Year is celebrated from February 1 until
the Lantern Festival on the 15th. In the
ancient Chinese calendar, this is the year 4701,
designated as the Year of the Ram, seeker of
peace and tranquility.
The 127th annual Westminster Kennel Club Dog Show
is February 10-11 in New York. This Super Bowl of
the dog world has 2500 dogs entered. That's a lot of
kibble! Check out the details at www.westminsterkennelclub.org.
February 14 is Ferris Wheel Day in honor of George
Washington Gale Ferris, who was born on this day
in 1859. Ferris was an American engineer, best remembered
for inventing the Ferris Wheel, which he developed for
the World's Columbian Exposition in 1893 in Chicago.
It was America's answer to the Eiffel Tower of the Paris
International Exposition of 1889.
top
of page ^
Coming Attractions
In the March 2003 edition of MCNews, we'll bring you
an interview with Ford Harding, author of Rain
Making and Creating
Rain Makers. Harding's newest book, Cross-Selling
Success, has just hit the bookstores, and
it's another classic in the making. We will talk to
Harding about the strategies and challenges of growing
a practice by cross-selling services to your clients.
top
of page ^
The End Page
"Now this is not the end. It is not even the beginning
of the end. But it is, perhaps, the end of the beginning."
- Winston
Churchill
Thanks for your subscription
to MCNews. You have been subscribed as: $subst('Recip.EmailAddr')
MCNews is published on the first Tuesday of each month.
If you received this issue from someone else and wish
to subscribe, please visit www.ManagementConsultingNews.com.
You can look at our privacy policy at www.ManagementConsultingNews.com.
We welcome your comments on the Newsletter, the site or about what you'd like
to see on either one in the future. So, please don't
be shy. Send your comments along to us.
You may forward this Newsletter in its entirety
to anyone you wish. If you wish to use any individual
part(s) of the Newsletter or the web site, you must
request permission in advance from the editor. For details,
please see our Terms
of Use.
Michael McLaughlin
Publisher
Management Consulting News ISSN 1539-2481,
Washington, DC, USA
Copyright © 2003 Management Consulting News
All rights reserved
top
of page ^
|
