Management Consulting News

Meet the MasterMinds: Al Ries on The Immutable Laws of Branding a Consultancy

This issue marks the first birthday of MCNews. To celebrate, we asked two marketing superstars for their perspectives on the consulting industry.

Best-selling author and marketing consultant, Jeffrey Fox, explains why avoiding the term consultant and talking less about yourself will lead to more sales.

From the author of some of the most influential marketing books, Al Ries, we learn why consultants are lousy at the all-important task of branding and what they can do about it. Ries also has advice for naming or re-naming your practice.

Finally, if you're in the hiring market for consultants, we have some market intelligence on what potential consultants look for in an employer and how much consultants are being paid.

As you dash through the airport, finish a client meeting or sell that next project, don't forget that Mother's Day in the United States is Sunday, May 11.

"If Columbus had an Advisory Committee, he would probably still be at the dock"
- Justice Arthur Goldberg

Winner of Sales & Marketing Management magazine's Outstanding Marketer Award, Fox has worked for twenty years with clients in more than sixty industries to help promote new products, raise marketing productivity and speed the pace of innovation.

MCNews talked to Fox about his views on how consultants can become sales and marketing super stars.

MCNews: How would you characterize the state of selling in professional services? Are consultants getting better at selling, staying about the same or losing ground?

Fox: I would say that it has not improved. One reason is that there has not been and is not enough formal training of consultants and other professional service people on how to go about building their practices. There are also a million socially acceptable excuses such as, I don't have time to sell because you want me to bill X number of hours, or selling is the partners' job or the boss' job.

Here's the other problem: most consultants are very educated, bright and experienced, and they sell on that. They sell based on their degrees and their experience and not by diagnostic listening, which is what they should be doing.

You still have the natural sellers out there, but in the big firms a lot of people would prefer to do the work and not have to go through the process of rejection to get the work. By contrast, advertising agencies have for a long time had a much more aggressive selling approach--a selling culture; they embrace it more maybe because that's part of their end game.

The reason some consulting firms get business is because of their brand names. The big brand names like McKinsey get a lot of client calls. It's a fact that twenty-five percent of all sales are made by the client unilaterally, sometimes despite the salesperson.

When clients call you, they have done their due diligence as far as I am concerned. If the client says tell me a little something about yourself and your response takes two hours, something is wrong. We worked with a very fine company and they did a proposal for a client that was twenty-three pages, twenty of which were on the consulting firm.

MCNews: Do you think that's because consultants default to what they are comfortable with, which is talking about themselves?

Fox: Totally. That's why they have pages and pages about the partners, their curriculum vitae and pictures. Every brochure for a law firm or a consulting firm has one obligatory picture around the conference table where they are all thinking of the next great thing. Or there's the picture of the guy walking down a busy sidewalk in the city with his tie over one shoulder and his blazer hooked over his finger. It's all about us, and nothing about client issues.

MCNews: Have client perceptions or behavior toward consultants changed over the last few years? If so, how have the best sales people, the Rainmakers, adapted their own sales strategies to deal with that?

Fox: Well, some changes in the perception of consultants have occurred, especially for those in the big firms that were coupled with accounting firms. Because of the negative press in the last couple of years, I think there is a little bit of a smell.

To begin with, the Rainmaker does not use the word consultant. There are a lot of companies that say they don't use consultants. Then you ask do you do your own accounting, your own legal work or pension management? They all use consultants and, frankly, they should because they don't want to be in those businesses. I think consultant can be a bad word. For that reason you are much better off being an expert in something, rather than a consultant.

Industry consultants are another problem. For example, the senior guy in a bank will be loath to hire someone who is a bank industry consultant. That can lead to cookie-cutter, or at least perceived cookie-cutter, recommendations. And you also have the problem of conflict of interest. So I think when you are an industry specialist that's not so good either.

However, being an expert is good, and you render that expertise with your questions. You ask questions that demonstrate to the client that you know what you are asking about. The Rainmaker always asks questions from which both people learn--the client learns from articulating the answer, and the seller learns by listening and taking notes.

MCNews: Are there common attributes shared by Rainmakers? If so, what are they?

Fox: Well, the first common denominator of Rainmakers, the great salespeople, is that they sell more--they produce. That's the wise guy answer, but that is in fact how you recognize Rainmakers.

Now, what do they do that's different? Well Rainmakers never wing it on sales calls; they always do pre-call planning, and they plan painstakingly. They don't depend on their experience, twenty years in the business or a close relationship with the client. They pre-call plan, and they do it in writing.

Rainmakers go on a call knowing the client has a problem and that is why they have been invited in, so they don't go in there ready to talk about themselves. The word "I" never comes out of their mouths. What they do is ask lots of penetrating questions and listen carefully to the answers. Then the Rainmaker proposes, either then or later, a solution that "dollarizes" the consequence of not going ahead with the project.

So you find out the client's problem and attach economic consequences to that problem. What would it cost the client not to go ahead with the proposed solution that your consulting firm can offer? When the client asks for a ballpark fee, you say the problem is costing you a million dollars, or whatever, and here's our fee. That puts the fee in perspective because the client will get a return on that fee that is much greater than the fee itself.

Finally, the Rainmaker always asks for the business, and that's rare. Our studies show that about ninety percent of salespeople never ask for the order.

Fox: Yeah--we will send you a proposal, or get back to me, or nice talking to you. They don't say would you like us to get going on this? Or, why don't you give us a try? That's the difference; the Rainmaker asks. And the Rainmaker's proposal is really just a denouement. The business has already been won and the Rainmaker's proposal is just a summary of the diagnostic need analysis.

MCNews: What do you think is the most common area in selling consulting services that needs improvement?

Fox: The excuse syndrome called "we sell intangibles"--the notion that you really can't put a value on intangible services. Consultants will say the guy selling ball bearings has something concrete and tangible to sell, while we do not. That is a myth. People don't buy products or services; they buy what they get from those products or services. A guy doesn't buy a gasket; he buys a leak free engine.

Benefits are always tangible, and they can be dollarized in one form or another. Let's say your consulting practice sells computer installations. You have to figure out first why the client even needs a computer installation. Then, what are the economic consequences of not having one, or not having one in a timely manner or not having one with the right application software? You begin to build a value proposition that's quantified, even if it's ballparked. For example, you might be able to say to the client, every day that goes by without you having this computer installation costs you $3,000 in lost sales. So if we can get it installed and running twenty days earlier, you would save $60,000.

MCNews: Using that computer installation example, do most people who are selling in that situation sell computer installation skills rather than the benefits?

Fox: That's right. They never sell the benefits, but they could because they are the experts on it.
That's just an excuse to lose. The reason consultants use the intangible excuse is because they don't have the dig, dig, dig mentality to isolate benefits and points of difference and to quantify them. But it can always be done.

MCNews: Before you make a call on a prospective client, what's on your to-do list?

Fox: First we analyze, discuss, articulate and write down what we already know about the client. That helps formulate some of the questions we will ask. We call competitors and look at industry information.

I'll give you an example. We were approached and we ultimately did a project for a major producer of chewing gum. We knew from our pre-call homework and pre-call research that the president was from Latin America--an internationalist. We also knew that the company was global, with brands all over the world. One of the questions from them invariably had to be what is your international experience selling gum? Well, since we had never sold a stick of gum before, we needed an answer to that.

Based on our research, we knew that chewing gum was illegal in Singapore, so we said we do know for sure that you can't sell gum in Singapore. That was enough to convince or at least satisfy this particular client that at least we knew something. We did that in pre-call planning.

So we look at product literature, at the client's advertising and at annual reports. We also talk to the client's customers because then we can say we have talked to five or six of your customers, are you interested in what they are saying about you? Every manager has to say yes to that.

MCNews: So are you saying it doesn't really matter what your experience is and what you know before you go to the sales call, it's how you prepare for it that makes the difference?

Fox: That's right. Everybody is afraid of getting the question what do you know about the utility industry? Or, what do you know about the bio-pharmaceutical industry? The answer is--nothing. We are never going to know as much as our clients know about their businesses. But we do know how to isolate the benefits as perceived by the clients, so who cares about the technology? People don't buy technology. They buy what they get out of the technology.

I would say that ninety percent of our success with clients comes from translating their jargon into language that is understandable for the end customers. Sales and marketing people hide behind jargon and techno-speak. Unless the client is perfectly confident and says what are you talking about, most of them just nod their heads and don't understand and don't buy.

Let's say you sell sophisticated locking instruments for dormitories and hospitals. The first question I would want the salespeople to ask is why do you want a lock? But they won't ask because they are afraid that would make them look technically inferior. On the other hand, it's perfectly all right for me to ask somebody what do you mean by marketing?

What they are trying to do is avoid looking incompetent. In fact, they should dare to ask the obvious questions.

MCNews: Any thoughts on how selling of services might evolve over the next few years, and how might somebody prepare for those changes?

Fox: I think there are three or maybe four changes afoot. First, more companies will out-source more functions. There is out-sourcing going on now, of course, but for non-core things--the easy ones. Additional out-sourcing will create opportunities for experts in what have been in-house areas. For example, some companies do their own in-house advertising, but that's silly unless you are an advertising agency.

More companies are also specializing. Even if it's just in divisions in a company, those divisions are themselves becoming more specialized. Huge companies have lots of little businesses within them that sometimes compete with each other. And those specialized businesses can't usually afford to have in-house experts in all areas, like how to sell internationally, how to develop brand names and trade mark protection.

Another trend that I see is more recognition by business to business companies of the importance of intellectual assets like brands and brand names. Consumer product companies have known about this since the early 1900's. But now all kinds of companies use the word brand all of the time. They don't know what they are talking about yet but at least it's on their lips, whereas marketing wasn't on their lips twenty years ago.

The fourth change, of course, is the way the world has shrunk via jet airplanes, emails and all of that. It seems to me that companies are going to need people who know how to break into China, who know how to set up shipping routes from Japan to Seattle. There will be lots of areas where global and European market expertise will be important, such as the common market, the Middle East, where we are going to be a major presence for the next fifty years, and Cuba, which will soon be opened. I think these are the areas where people who can give specialized advice are going to make out well.

MCNews: If you were to give one piece of advice to a consultant about selling, what would it be?

Fox: Don't talk about yourself and don't talk about your other clients; ask questions, listen to the answers, and ask for the order.

Clients will invite you to talk about yourself because they don't know how to interview consultants. It's like asking what's the temperature? The great consultant says I will get to that, but do you mind if I ask you a few questions first? Then two hours later when you are walking out with the contract, the client might say, hey the next time you are here, tell me a little something about yourself.

Fox: For one, I'm reading my new book, How To Become A Marketing Super Star. It's not academic or about the classic things in marketing, but has all kinds of stuff about the common mistakes that marketers big and small are making everyday.

I am also re-reading How The Irish Saved Civilization, by Thomas Cahill. That's one of my favorite books, I suppose because I' m Irish. Another book I'm reading is Under the Black Flag, by David Cordingly, which is a very interesting historical analysis of pirates.

What's a Consultant Worth?

A recent study by Abbott, Langer & Associates, Inc. will help answer that question. Now in its eighth year, Compensation in Consulting Firms reports on national median total cash compensation for a host of positions within consulting firms.

Position	Median Income
President/Owner/Partner	$150,000 (some make over $1,000,000)
Senior or Executive Vice Presidents	$144,200
Vice Presidents	$136,965
Branch Managers	$129,700
Principal Consultants	$98,000
Chief Financial Executives	$83,500
Senior Consultants	$80,000
Chief Marketing/Sales Executives	$71,692
Consultants	$58,817
Junior Consultants	$48,248

For consultants, the highest compensation is earned in executive search, systems development and integration, financial strategy, management and mergers/acquisitions consulting firms. Compensation is lowest in government, marketing, employee compensation/benefits and health care consulting firms.

The 157-page report can be purchased from Abbott, Langer & Associates, Inc.

* * * *

Meet the MasterMinds: Al Ries on The Immutable Laws of Branding a Consultancy

Al Ries is a consultant, best-selling author and chairman of Ries & Ries, a marketing firm that specializes in branding strategy. Along with his partner, Laura Ries, Al Ries has consulted with hundreds of companies around the world on key branding issues. His client list includes AT&T, IBM, Intel, Merck, Silicon Graphics, Green Giant and self-help guru Tony Robbins.

He is the author or co-author of nine books, including The Fall of Advertising and the Rise of PR, The 22 Immutable Laws of Branding, Positioning: The Battle for Your Mind, Focus: The Future of Your Company Depends on It and The 22 Immutable Laws of Marketing.

MCNews asked Ries how consultants could brand their practices in today's crowded marketplace.

MCNews: What is your view of the state of marketing and branding among professional service providers, particularly consultants?

Ries: I think that most professional service providers are good at selling, but not at branding. In other words, they do a very good job of rounding up prospects and making presentations to sell their services. On the other hand, they do a lousy job of branding.

To build a brand, you have to stand for something in the mind. BMW stands for "driving," Volvo stands for "safety," Mercedes-Benz stands for "prestige."

But what does the average professional service firm stand for? Nothing. Take the accounting firms: what's the difference between PricewaterhouseCoopers, KPMG, Ernst & Young and Deloitte & Touche? I don't know, and I'll bet most of their prospects have no idea either. They just hire the accounting firm that puts the best team on their accounts.

MCNews: Many consulting firms use advertising to build their brands. Is advertising an effective tool for this? If not, what other branding strategies should consultants consider?

Ries: It can be effective, but not unless it says something that "positions" the firm. PR is generally a more effective branding strategy to establish a position in the mind. After that position is established, then you can switch to advertising to maintain the position.

Safety advertising is effective for Volvo because everybody perceives Volvo to be the safe car. Advertising doesn't have the credibility to put a new idea into the mind. If your advertising says that you are a "terrific consulting firm," who is going to believe it? Everybody says that.

MCNews: What are the two or three keys to success in using public relations to build a brand?

Reis: You need an idea to start with. You need a unique position that you can use to try to get into a prospect's mind. You might, for example, pick out a segment of the market that you are the leader in and then position yourself as the leader in that category.

If you are not the leader in any category, you can try to establish yourself as the "alternative," or the No. 2 brand in the category--as Pepsi-Cola is to Coca-Cola. How do you do that? You ask yourself "what is the leader's position?" and then you become the opposite. Coca-Cola is "the real thing." It's the original cola as a result of its introduction more than a hundred years ago. So Pepsi became the opposite with its strategy to go after teenagers. "The Pepsi Generation."

You need a spokesperson. The best spokesperson is almost always the chief executive. We recommend that the chief executive of any major corporation spend at least half or more of his or her time on outside public relations activities.

MCNews: Some people suggest that publicity is free. Do you agree? If not, what are the major cost categories of a successful public relations program?

Ries: Nothing in life is free. Good publicity requires a lot of time on the part of internal people and sometimes the hiring of expensive PR firms.

The major cost of PR, both internally and externally, is the cost of the people involved. Most of the other expenses are relatively minor.

MCNews: Any tips on how a consultant can get started with a public relations program?

Ries: You need to decide first the scope of the program. There are probably four levels of activity. The smaller firm needs to do it themselves. When the firm gets larger, it can probably afford to hire a freelance PR person on a part-time basis. When the firm gets even larger, it can probably afford to hire a full-time PR person. The next step up the PR ladder is to hire an outside PR firm.

In all cases, a lot of time needs to be spent internally on PR activities. Unlike advertising, you can't delegate all of these activities to an outside agent. The media wants to talk to the source, not the outside mouthpiece.

MCNews: Some consultants struggle with naming their consulting practices. Have you got any advice on what to consider when naming or renaming a consulting business?

Ries: It's a people business, so the first names to consider are those of the people themselves, especially if they are still alive. Even dead, a people name is probably better than any other name. Ernst & Young is a better name than KPMG.

If you are the CEO and your name is lousy, change it. Ralph Lifshitz was a designer who wanted to become a famous designer, so he changed his name to Ralph Lauren.

There are many, many consultants out there with names as bad as Lifshitz, but in my experience they almost never change their names. Tragic.

Faith Plotkin wanted to get famous, so she changed her name to Faith Popcorn and her books and consulting practice have made her famous. [http://www.faithpopcorn.com/faith/popcorn.htm]

Avoid the bombast name. There are a lot of one-person consultancies out there with names like "Worldwide Global Marketing, Advertising & Sales Consultants." In names, bigger is not necessarily better. Bigger often sounds foolish.

MCNews: If you could give a consultant one piece of marketing advice, what would it be?

Ries: Focus. Whatever you are doing today, your business would be stronger and more profitable in the long run if you concentrated your activities on one industry, one region, one function, or one problem. When you try to be all things to all people, you end up being nothing.

What's a Chevrolet? It's a large, small, cheap, expensive, car or truck. It's also a brand that used to be the leader, but has lost its leadership to Ford.

MCNews: Thanks for your time.

Visit www.ries.com to find out more about Ries & Ries, their books and consulting services.

* * * *

Last year, Top-Consultant.com and Prism Executive Recruitment conducted an intriguing survey on what consultants and aspirants are looking for in their ideal employer. The survey attracted 7,100 respondents, seventy-one percent of whom were consultants. You might find the results helpful as you plan recruiting strategies.

The most important factor for consultants was quality of work/clients. The report went on to note that most job seekers were not well informed about the quality of work and clients at competing firms, suggesting that more emphasis could be placed on this important topic during the hiring process.

Salary was rated next in importance, but the importance of benefits fell almost to the bottom of the list.

Respondents rated partnership potential and job security dead last in importance. In today's market, it's possible that many consultants view a long-term career in consulting as unachievable or undesirable.

Top-Consultant.com is a website devoted to the global consulting sector.
To fast track your career and get immediate access to the latest news, views, appointments and trends in the world of consulting click on their link http://www.top-consultant.com/UK/career/appointments.asp

On May 1, 1981, American Airlines began the first frequent flyer program. Most airlines now offer such programs, but American's program was the first and has the most members--forty-five million. Ironically, these days, forty percent of award miles are earned on the ground rather than for flying.

World Turtle Day is May 23. Turtles have been on the earth for 200 million years. This day brings attention to the protection of these reptiles, which have been around a lot longer than we have. http://www.hsus.org/ace/14162

"The world is full of boring stuff…that quickly becomes invisible." -Seth Godin

Seth Godin changed the language and business of marketing with his best-selling books, Permission Marketing and Unleashing the IdeaVirus. Godin joins us next month to talk about how consultants can transform their practices by understanding the lessons of the Purple Cow.

Have you ever had a difficult conversation with a client? Doug Stone, consultant and co-author of Difficult Conversations: How to Discuss What Matters Most, joins us to shed light on strategies for handling any difficult conversation. Stone is a partner at Triad Consulting Group and teaches at Harvard Law School. His articles on negotiation and conflict resolution have appeared in the New York Times, the Los Angeles Times and the Boston Globe.

"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

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