Is This a Good Time for Consulting?

Saturday, July 5th, 2014

A logical question which leads consultants to other questions like these:

  • Are we in a continuing recovery or are we still just limping along, having pulled ourselves out of the worst economic decline in modern times?
  • Are the new jobs being created the kinds of jobs that a real recovery should produce?
  • What impact does this really have on opportunities for consulting?
Right time for consulting

Which way is the economy heading?

 

Consulting realities in a down economy

In a down economy, businesses tend to cut back. Managements are hesitant to add expensive staff for the long term. Instead, they turn to contract employees to meet immediate needs.

This short-term perspective  opens opportunities for people with specialized skills and problem-solving capabilities. Established consultants – especially those serving the small business (under 500 employees) and mid-sized companies are likely to find many opportunities.

Consulting realities in an up economy

Conversely, in a booming economy, companies are pressed by competition and scarcity of available candidates to fill specialized employment needs. This also creates opportunities for consulting.

Are there any bad times for consulting?

Probably, and certainly when viewed from an international perspective. But at any given time, your opportunities will be determined by the specialized skills and experience you have to offer, who needs them and where are they located.

But there’s one other factor that will decide how effectively you are able to take advantage of these opportunities.

Opportunities depend on marketing skills

For the most part, there are always likely to be opportunities for the qualified consultant who does a professional job of marketing for his or her services.

Next to your skill set, your marketing skills are the major factor in determining your success in identifying, locating and attracting clients. We continue to explore various strategies, tactics and marketing scenarios that can produce consulting client opportunities.

By way of a “preview,” here are some of the critical marketing activities we recommend for beginning and seasoned consultants alike . . .

Website – Your website is the central focus of your communication in the world of business. It must answer all the questions a prospective client needs answered (including, “Can I trust this person?”) – and help that client contact you. Just as all roads lead to Rome, all paths from your various activities should lead to your website. We’ve pulled together an entire workbook on setting up an effective website for the professional. Check it out here.

Professional Image – From a business card to appropriate stationery and a multi-function business telephone system, your interactions with people should convey the image you wish to project. Contrary to popular belief, a “brochure” may or may not be beneficial.

Writings – White papers, (i.e. position papers), articles in industry publications that can be reprinted and distributed in response to inquiries, published on your website, etc. are among the most valuable forms of “marketing collateral.” Depending on your writing skill, you may need to engage the services of one or more writers.

A Published Book – Establishing yourself as an authority by producing a book on the subject of your expertise can have an enormous impact on your marketing success.

Professional Networking – Possibly the single most effective way to reach the “hidden job market” (yes, the very same companies that have unpublished job openings) is through strategic networking. Unfortunately, too many people with otherwise excellent people skills make a number of mistakes in their networking activities that shut them out from receiving the true referral benefits of this activity. Are you making any of these mistakes? Our training guide and its workbook review these mistakes but more to the point, aim you in the right direction for getting those true referral benefits. Find out more about Professional Networking here.

Social Media – Among the most interesting ways to get yourself in front of potential buyers is to participate selectively in appropriate social media. LinkedIn, for example, is almost certainly an appropriate medium for you; both your profile and your activity in targeted groups can add real fuel to your efforts. Twitter may also a likely candidate. Facebook or Instagram may or may not fit your plans.

Public Speaking – In front of the right audience, presenting is a superior way to generate inquiries about and for your services. But don’t be fooled. Just getting in front of an audience is only the beginning. Knowing how to present yourself and your subject as well as how to strategically withhold information (to provoke inquiries), etc. are techniques you must learn to use properly. Otherwise, the speech is a waste of time at best and can even harm your image. At The Marketing Machine® Group you’ll also find a course on giving powerful presentations.

Are there other ways to market your services? Absolutely there are, including operational tools and practice management activities such as the proposal, pricing, method of reporting results, etc. We cover these and other aspects of Marketing Your Consulting Services in our articles and training materials. You’ll see more on items from this list because we think they must be given priority.

(Have a marketing topic you’re particularly interested in? Let us know and we’ll add it to our list and share what we know!)

Joseph Krueger
The Marketing Machine®

Interested in getting started right now? Ready to pick and choose from proven training materials? Take a look at TheMarketingMachineGroup.com. There you’ll find a collection of courses in three categories: Marketing Toolkit, Professional Skills and Start-up.

 

Referral Regrets

Wednesday, June 11th, 2014

“Gee, I never realized you do that!”

How many times have you heard that? If you have EVER heard it, I trust you flinched – and recognized immediately that you haven’t been doing a very good job of marketing!

Regret If you stop to think a bit more, you’ll also realize that whoever said this has been unable, all this time, to make a good referral on your behalf. OK, if it was your mother-in-law, maybe it’s not so serious.

But if a client or business associate says it, then you have really missed out!

Time to revisit your referral strategy to avoid any (more) referral regrets.

We’ve said it before. People like to do business with people they like and trust. The same holds true for referrals.

People like to make referrals for people they like and who they know will appreciate it.

How does a potential referrer know you will appreciate the referral? Only if he’s confident it’s a good fit. This means the potential referrer needs to know a lot about you.

The referrer needs to know you WANT referrals.

Do you make it clear to your network when you are looking for referrals? It can be something as simple as saying, “I’ve got room for two more clients and I’m looking for the right ones.” This should lead to the follow-up question, “Oh, what kind of clients are you looking for?” and then the conversation can continue.

The referrer needs to know exactly what kind of referral you want.

You may be looking for clients, as described above. But maybe you’re looking for a new attorney who specializes in intellectual property. Maybe you need a referral to a real estate professional who specializes in leased office space. Maybe you are looking for the right person to plan and facilitate your upcoming company retreat. The more detail you can provide, the easier it will be for your referrer to help.

The referrer needs to know exactly HOW to make the referral.

Your being handed a business card with name and phone number is not really a referral. An effective referral is a personal introduction, where the referrer uses his or her own authority and relationship to pave the way for you.

If your referrer doesn’t have a personal relationship with the prospect – again, this may not be a real referral. Before you promise to “follow up,” make sure that your referrer has the appropriate status and commitment in the midst of the transaction.

Not a fit?

If, for any reason, the referral doesn’t really fit your needs, you can decline to use it. Make sure your referrer understands why – timing not right, different focus, potential conflict with other clients, etc. In that conversation, you’ll have the opportunity to give your referrer even more information about what you do, so he’ll continue to be a potential source.

For sure, you’ll never hear again from that person, “Gee, I didn’t know you did that!”

Virginia Nicols
The Marketing Machine®

 

Any of this hit home? If so, you may want to check out  this post:

http://consultantsmarketingmachine.com/hate-networking

And if you’re interested in a full-on review of referral strategies, check out this material at The Marketing Machine Group:

http://themarketingmachinegroup.com/downloads/dynamic-referral-system/

 

Marketing Classics: Two Years Old is Too Old

Monday, January 6th, 2014

I just came across this statement in the preface of a book published in 1986:

“Generally speaking, any book more than two years old is of questionable value. Books more than four or five years old are a menace.”

Marketing ClassicsNaturally, this caught my eye!

To be fair, the book in question was published by Nolo Press. Since Nolo specializes in taxes and legal issues, the warning is probably a good one.

(I published a book myself in 1991 on financial and tax planning. Five years later I got a request from the publisher, John Wiley & Sons, to reprint the book IN CHINESE. Well, for sure those Chinese readers were in for a treat of questionable value! But I digress . . .)

To get back to the book in question, however. It was on the topic of marketing, mostly direct marketing. In fact, it was on how to market without advertising (the name of the book, surprise! is Marketing Without Advertising, by Michael Phillips and Salli Rasberry) and it is filled with excellent observations, some great cartoons, and an easy-to-read discussion of building and implementing a marketing plan.

Yes, the references to “rolodex parties” are out-dated, but not the idea of getting friends or colleagues to share their contacts with you!

Marketing classics are just that: Classic!

The point of all this is that if you have access to some of the classic resources, whether in your own collection, at your local library or online, it is likely worth your while to track them down.

Yes, read them with an eye to what may no longer be applicable. But if they ARE business and marketing classics, the majority of the material is likely to be just as valuable as anything being written today. (And at the risk of sounding critical, I bet the majority of the material will be better written than what you’re finding today, too!)

Three of my favorite marketing resources.

The photo show three of the classics that I have used for years as resources. If you click on the links below you’ll go directly to an Amazon page where you can get full details. (Disclosure, we are Amazon affiliates and may receive a commission if you purchase through our link. It doesn’t impact the price you pay — but helps keep our website active!)

* Getting Business To Come to You, Edwards & Douglas. This is a 685 page reference manual of step-by-step processes, examples, checklists, action steps, charts and diagrams. Our copy is filled with bookmarks!

*  Shenson on Consulting: Success Strategies from the “Consultant’s Consultant.” Read and savor anything you can find from Howard L. Shenson. He’s one of our favorite masters.

* The Consultant’s Guide to Hidden Profits, Herman Holtz. Holtz is our second favorite master of consulting. This book has 101 boxed “insights” that are terrific; look for them. We have bookmarks in this book, too! (Holtz’s most well-known book: How to Succeed as an Independent Consultant.)

Good stuff is good. Use it, share it. Produce it yourself. Good stuff retains its value for years — and the very best gets even better!

The Marketing Machine®
Virginia Nicols

 

 

 

 

Consultants Helping Consultants

Friday, September 6th, 2013
Consultants meeting consultants

Getting to know other consultants

If You’re New to Consulting, You Don’t Have to Go it Alone.

The world of consulting to small and medium-size businesses can be a very lonely existence, especially if you’re working out of your home and have no full-time staff.

Your marketing activities no doubt include networking in the trade associations that serve your target market. But are you meeting and networking with other consultants, especially those whose fields complement yours?

Consultants helping consultants has multiple benefits.

Build Liaisons With Other Consultants and Refer Each Other.

To begin with, your credibility can be greatly enhanced when a client asks you about a consulting assignment that is out of your area of specialty and you can refer someone with that specific discipline.

In many cases where multiple disciplines are required, knowing other consultants allows you to put together a joint venture.  Of course, this presents a different opportunity as well as some challenges. You don’t want to expose your client to someone you barely know and whose work product you’ve never seen, so approach such a joint venture with caution.

Make Sure Your Marketing Plan Includes Building Relationships with Other Consultants.

Your marketing plan should contain strategies and tactics for including other consultants in the section on developing referral sources. Take the time to research non-competing but closely aligned fields, and build a plan to reach out to professionals in those fields.

Building credibility within the consulting community is not something that will take place overnight. It’s a long-term process, so give yourself the time! If you’ve exhausted the first round of possibilities, you may want to take a more in-depth look at where you might find referral sources, and how best to approach — and nurture — them. The Marketing Machine’s Dynamic Referral System — Building Solid Relationships covers the topic in significant detail.

Join or Form a Consulting Network Group.

By joining with other consultants in your area and offering a regular series of seminars, you all get a chance to display your case histories, your skills and accomplishments to each other as well as to businesses in the community. The Institute of Management Consultants (IMC) is a national organization composed of largely small business consulting firms. Members meet regularly and non-members are welcome. This group of consultants helping other consultants can be especially useful for people new to the consulting field.

Network on Purpose.

Getting back to solitude, what may well be your biggest obstacle to maintaining a consistent and positive attitude so necessary to succeed as an entrepreneur.

You need a network and regularly-scheduled ways to stay in contact. Not just in actual meetings, but on line and by phone. Consider joining appropriate LinkedIn groups and becoming an active contributor. In fact, you may wish to start your OWN LinkedIn group.

When it comes time to speak one-on-one with some of your new contacts, VoiP (voice over internet protocol) and services like Skype, FaceTime  and WhatsApp on the iPhone and IPad offer ways of getting to know one another that are much more powerful than mail or a simple phone call. And the costs are minimal. Get to know these technologies and use them.

The more you build and nurture your network, the more your phone will ring.

Joe Krueger
The Marketing Machine®

P.S. If you plan to use any of the excellent video conferencing tools, be sure that you are set up to present a professional background for the call! You may be centered on the screen, but bad lighting can make you look tired or even scary. If behind you, what your contact sees is a bookcase with half-fallen books, or an open door, or a pile of laundry — you are doing yourself a disservice. Set up your “stage” and use it! Otherwise, stick to the phone.

 

Marketing Budgets – A Big Business Fantasy

Tuesday, September 3rd, 2013

It happened a few years ago . . .

The inspiration for this article comes from what happened to me a number of years ago when I was consulting to a major financial institution.

My assignment was to help a new division assemble a marketing team and materials. Naturally, one of my first questions was, “What is your marketing budget?” They responded with a six-digit figure; I believe it was $163,000. I then asked the next logical question, “How did you arrive at this figure, and what does it include?”

I received what I discovered later to be a common answer. It went something like this:

“Well, we looked at our major competitor (also a bank) and they have allocated $215,000 for marketing basically the same service. Since they’re 35% bigger than we are, we multiplied their budget by 65% and came up with $139,750. Since we knew we’d have some start-up costs, we added $27,950 to cover those. That’s it.”

The Budget Process, repeated many, many times, with variations!

Yes, this “system” became familiar to me as I saw it put into place over and over again. Some of the more ambitious (or should I say aggressive) rising stars in the corporate world sometimes took off an extra ten percent because “we’re better sales people.” (They wanted to look good for management.)

“What were they smoking?” you ask. I have no explanation except perhaps they were rolling their own banana peels (that’s for Beatles fans everywhere).

Now before you declare this situation ludicrous (which it is) and the people behind the budget calculation hallucinatory (which might have some truth to it), be aware that this kind of logic is employed in big companies all over the world.

Budgets are allocated on an annual basis and the department heads have to come up with some figure. If they under-estimate their needs, having to go back to the well is distasteful. If they over-estimate, well, they may turn to folks like us and ask us to pre-bill projects to keep that department from losing that budgeted money.

This kind of thinking can really confuse the situation, but it’s a reality in the world of corporate America. Be aware of it so you don’t let your amazement show!

Marketing budgets should really be developed this way:

  • Determine (or estimate) the Lifetime Customer Value (annual revenue x number of months or years for the average relationship)
  • Determine how much the client is willing to pay to acquire a new customer (the Allowable Cost of Acquisition)
  • Determine how much the client is willing to pay to retain a customer

Then, with these numbers in hand, determine how many customers the client wants to book (or can “handle” on a weekly or monthly basis), understanding that there is always an investment associated with booking and maintaining business and that overbooking is not desirable.

This is a realistic way to budget. Unfortunately, very few businesses operate this way.

What stories about budgeting can you share?  We’d love to hear ’em.

Joseph Krueger
The Marketing Machine®

 

Consultant’s Fee Schedule

Tuesday, April 16th, 2013

Setting your fees is one of the single most important business decisions you will make.

Hourly rates are misleading and easily disputed.

CalclulatorIf you are new to consulting you may be tempted to peg your fees on an hourly basis to the equivalent hourly rate of your previous salary. But is that all you are worth? Remember, business must turn a profit to be viable and whatever your previous employer was paying you was at best a third of what “they” thought you were worth to them!

In addition, in our experience, most middle level managers who have taken early retirement or who were “downsized” very likely were underutilized and underpaid to start with.

Just as you may be worried about a potential client expressing dismay at paying, say $250/hr., in our experience they are just as likely to question the value of retaining you if your fees are too low.

So, the reality is that hourly rates are an arbitrary number that is impacted by your overhead and other business expenses. Particularly if you’re dealing with small business owners, they are going to be suspicious of hours, no matter how low or high the rate.

Is there an alternative? Yes . . . several.

First is hourly.  Then there are retainers. Next is payment by project. Then there’s a combination of hourly and retainer or hourly and project. It can be confusing. Rather than make any recommendation at this point, let us tell you how we charge.

We like a flat fee with per diem expenses for travel & meals and reimbursement for any out-of-pocket expenses.

What’s the size of the problem?

Before establishing a flat fee, it’s important to know the value of the project and the scope of the solution that is expected, including all deliverables. If the problem is costing the company, say, $1.6 million per month, you should be able to charge $100,000 or more, assuming you can solve the problem.

If, however, the problem is only costing $20,000, you may want to walk away from it, telling the client that you don’t feel it would be cost effective for you to spend the amount of time and resources required. Offer to help them find a less expensive solution. (Don’t be surprised if they come back and insist you take it on . . . but, that gets us into another subject, sales and posturing for another day.)

Where the problem and/or scope of work are not clear, we offer to approach the challenge in three phases.

  1. The first phase, developing the Program Plan, might cost $5,000. This results in a report with a complete analysis of the problem and specific recommendations for the solution including budget projections. That might total something like $78,400. Also included in the Program Plan is a projection for the Third Phase, the Follow-up Report.
  2. The second phase is Execution, following the Program Plan as developed.
  3. The third phase is a Summary Report and Recommended Follow-Up Action Plan.

The client signs on to the program in phases, one phase at a time. If, for example, the result of Phase One is a report that outlines the execution phase, with a budget attached, the client is able to take the outline and decline any further involvement . . . or, if they so choose, take the outline of the report’s recommendations and execute themselves or contract with someone else to execute.

As for payment, it is important to get some money up front before beginning on Phase One. We typically get 50% of the agreed-upon fee at that time, and collect the rest when the Program Plan is delivered. If the client agrees to proceed with Phases Two and Three, which are likely to be a much larger sum, you may want to schedule payment based on certain milestones in the process.

I might point out that in over three decades using this approach, we have only had two occasions where the client failed to proceed after having received the Program Plan. Obviously, the way it is presented to clients is a key factor in the “Sales Process.”

I welcome your comments on fee setting.  It’s a big subject! In fact, if you have a burning question, let’s talk on the phone.  You can reach me via the Contact Us page.

Joseph Krueger