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| Listen |
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When researchers asked prospective buyers about their biggest problem with service providers who are trying to sell to them, the answer came back that the seller "did not listen to me."
Yes, you read that right.
According to a recent RainToday report (see more below), prospective buyers say professional service providers aren't listening to them.
I can see two plausible explanations for this finding. First, some people really aren't listening to their clients. And second, others are listening, but the clients can't tell. I'm going to skip the people in the first group. If they're not listening to their clients, it's pretty unlikely that they're reading this.
For those in the second group, here are some quick thoughts. If clients doubt you are listening, it should be easy to fix that. Maybe you're not active or responsive enough in your client interviews. It's not uncommon for people to think they're not being heard, even when they are.
Think about how you acknowledged what someone just said to you. You don't have to be a head-bobber to confirm your understanding with clients as they talk. Summarize what you know. Ask clarifying questions. Take notes on significant points. Any of these techniques will signal that you're keeping up.
It's also possible that a client feels unheard because your sales proposal or report doesn't reflect the issues the way the client wanted. In that case, the client could conclude that you didn't listen.
For some sellers, lack of appropriate detail can result from ineffective tools for gathering data during the sales process. If you don't have a systematic way to capture clients' information as they talk, it's easy to lose track of the details. You may want to consider how you prepare for client interviews so you do retain those details in the future.
There are lots of reasons why you might lose a sale. But to be called out for not listening is inexcusable.
Enjoy this month's issue.
And send me an email if you have comments.
Mike
McLaughlin
Editor
Management Consulting News is a publication of MindShare
Consulting.
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| MCNews 12 Index of Professional Services |
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US Economic News |
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McNews 12 Index |
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Let's get 2008 into the history books.
Even an optimist sees the glass half empty these days, as the bad economic news just keeps rolling in. The US Consumer Confidence Index, which rose slightly in November, fell to an all-time low in December. Retail sales during the all-important holiday season declined from last year, and the Index of US Manufacturing activity sank to its lowest point in twenty-eight years.
US auto makers continue to press the government to finalize the massive loans they need to fund their working capital requirements, and the financial services sector cannot seem to find its footing. And, other industry chiefs are now making noises about needing their own bailouts too.
The S+P 500 shed 39 percent in 2008, while the MCNews Index lost 24 percent to end the year at 681. Only Watson Wyatt came through the year with an increase in its share price, wrapping up with a gain of 1 percent. Accenture was a close second, losing less than 1 percent of its share value. For most others in the Index, it was a year of double-digit share price declines.
From an optimist's point of view, it can only get better from here.
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MCNews 12 Index |
YTD
Change |
S+P 500 YTD Change |
| Dec 2008 |
681 |
-24.0% |
-39.0% |
| Nov 2008 |
652 |
-27.0% |
-33.0% |
| Oct 2008 |
692 |
-22.5% |
-27.6% |
The MCNews 12 Index reflects general investor sentiment about the state of the global professional services industry.
The twelve publicly-traded companies included in the MCNews 12 Index account for roughly $80 billion in combined annual revenue, and serve clients around the world.
Learn more about the MCNews 12 Index 
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| Interview:
Andy Wood |
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 "Trust cannot occur when the buyer concludes that the seller has no deliberate interest in the buyer's interests."
Andy Wood is a professor of marketing at West Virginia University, and a former sales executive. Since returning to academia, Wood has studied personal selling, sales management, and the influence of non-verbal communication on buyer trust and sales performance.
Wood recently wrapped up "Buyers' Trust of the Salesperson," a multi-year study on the role of trust in selling. We talked to him about how we build trust, and its importance in productive sales conversations.
Read
our interview with Andy Wood
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| The Myth of Merit-Based Pay |
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 At some time or another, you've probably been through a performance review at work. Hopefully, you got a well-deserved salary bump based on that assessment. For decades, employers have sorted employees into various segments to recognize different levels of performance and to hand out "merit" pay increases.
If they're honest about it, most managers will admit that they would rather clean the office refrigerator than conduct another performance review. And that aversion isn't always because they dislike the task, but because the process is broken in most companies.
Some academicians are now suggesting that merit-based pay programs don't improve employee or organizational performance. My reaction to this finding can be summed up in one word: Duh! You'd have to be living in a cave not to know that the paltry merit increases many organizations mete out won't sustain a person's motivation to go all out for any job. Plus, in organizations that rely on pure merit increases, some people inevitably exhibit behavior that's beneficial to them, but detrimental to the team.
What is interesting, though, are the ideas floating around to deal with the issue.
Jeffrey Pfeffer, a professor of organizational behavior at Stanford's Graduate School of Business, suggests that group bonuses, profit sharing plans, and other gain-sharing arrangements are more effective than the traditional merit pay strategy.
The stakes in how organizations handle merit pay are huge. Human resources executives help manage the $4.5 trillion that US companies spent on wages and salaries in 2008. And, they'll also have a say in how to divide up the $200 billion increase in wage and salary spending for 2009.
Look for more enlightened approaches to salary and bonus programs over the next few years. Employers will quickly realize that they can improve the performance of their organizations with innovative compensation options.
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| Memo to IT Consultants |
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 McKinsey & Company just released the results of its third annual survey on information technology strategy and spending. More than 500 executives across the globe offered their opinions on the state of IT now and in the future.
It's not surprising that most respondents expect IT budgets to fall from 2008 levels. You don't have to look any further than the squeeze many organizations are putting on budgets in this tumultuous economic environment: Only 23 percent of executives expect to increase their operating budgets in 2009, while 43 percent expect to reduce them. In 2008, half of the survey respondents expected operating expenses to increase.
When asked about threats, nearly two-thirds of respondents say their "organizations are at risk from information- and technology-based disruption."
Topping the list of those disruptions are potential shifts in customer expectations for better products or differentiated services enabled by information- and technology-based capabilities.
In an era when IT executives will have to do more with less, IT consultants have an opportunity to help clients balance the seemingly conflicting objectives of reducing costs while keeping the spirit and practice of IT innovation alive.
Read IT's Unmet Potential: McKinsey Global Survey Results.
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RainToday Report: How Clients Buy |
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Our friends at RainToday just released their latest report on the buying behavior of professional services clients, How Clients Buy: 2009 Benchmark Report on Professional Services Marketing and Selling from the Client Perspective. RainToday analysts studied the 200 survey responses and came up with some insightful, fact-based conclusions about how buyers of professional services choose one firm over another.
The report offers a view into the problems clients face as they work with service providers, and points to ways to build trust with your potential client.
Among the study's key findings are:
Where are buyers looking? The most common ways decision makers initially identify and learn about service providers include: Referral from colleagues (79%); referrals from other service providers (75%); personal recognition or awareness (73%); in-person seminar (66%); and presentation at a conference or event (62%).
Stop talking and start listening. "Service provider did not listen to me" is the most widely experienced problem faced by 38% of professional services buyers. Additionally, 55% of buyers said they would be "much more likely" to consider hiring the provider if the person listened better. Other major problems buyers cited include: Service provider did not respond to my requests in a timely manner (30%); did not understand my needs (30%); talked too much (25%); and had no personal chemistry with me (25%).
You're hired: Value and experience reign. Buyers rated the factors most important in their decision to choose a service provider, and nearly all (90%) said the overall value the provider can deliver is "extremely" and/or "very" important in their hiring decision. Other top factors include: Experience in specific area where I have needs (88%); overall costs or fees (86%); experience in my industry/business (83%); and reputation of individual consultants (80%).
This benchmarking report can be an essential tool for anyone trying to boost effectiveness in the market. Learn more about How Clients Buy: 2009 Benchmark Report on Professional Services Marketing and Selling from the Client Perspective.
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| Top 10 Articles of 2008 |
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As the New Year kicks off, this seems like an appropriate time to take a look back at the ten most often-viewed articles in our archives from 2008:
- Common Sense Web Design with Steve Krug
- How to Write a Compelling Marketing Letter: The All Important First Sentence, by Mark Satterfield
- Flawless Consulting with Peter Block
- Nick Morgan on the Secrets of Powerful Speaking
- Get Unstuck with Keith Yamashita
- A Conversation with Philip Kotler
- Marcus Buckingham's One Thing You Need to Know
- Robert Sutton on "The No Asshole Rule" for the Workplace
- W. Chan Kim and Renée Mauborgne on Blue Ocean Strategy
- Michael Gerber Unravels the Myth of the Entrepreneur
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| Coming
Attractions |
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 "For managers, many of the qualities we aspire to emulate, or feel guilty for not having, turn out to be ones we're better off without."
Next month, our guest will be Sydney Finkelstein, a professor at Dartmouth's Tuck School of Business, and the author of Why Smart Executives Fail. His areas of research include strategy, leadership, warning signs for corporate disasters, and learnings from mergers and acquisitions.
His new book is Think Again: Why Good Leaders Make Bad Decisions and How to Keep It from Happening to You.
We will ask Finkelstein why smart people don't always get it right, and how to make sure we're making the right choices--without the benefit of a crystal ball.
Look for the next issue of Management Consulting News on February 3, 2009.
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