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The merger and acquisition market is way down from its peak a few years ago, but there are still significant consulting opportunities for well-positioned firms. To better understand the upside to the down M&A market, Consulting’s One-on-One sat down with Frank Bernhard, OMNI Consulting Group’s managing principal for its telecommunications, media and technology practice. His 20 year-old M&A firm grew by 7.8 percent in 2009, far outpacing the sluggish market.
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»Consultants on Consulting
Consultants on Consulting gives management consultants the chance to share their views, expertise
and insights into topics they feel passionate about. Each consultant's piece outlines ideas and
strategies for change, and further enhances the author's role as a thought leader in the profession.
1
30
2009
»Consulting Recession Plan: Spend Less, Sell More
By Tom Waite
We’ve seen this picture before. Clients are anxious, balking at your fees or delaying and even cancelling engagements. Prospects are postponing decisions or not returning phone calls. And consulting firms are instituting hiring freezes, closing unprofitable offices and even laying off staff. Now they are poised to make deep cuts in their marketing and business development expenses.
Every marketing and business development executive will tell you that a recession is precisely the right time to increase your expenditures and grab market share from your competition. And then they will tell you to trust them because the ROI is both a long time in coming and difficult to measure.
They are wrong.
While there are opportunities to gain market share in this environment, throwing more money at this financial problem is definitely not the answer. The fact is that now is a great time to take a hard look at your firm’s strategy and your marketing and business development activities and take action.
Here are five key things for smart executives to consider during these turbulent times. Let’s call it your recession action plan:
 Clean Out Your Dead Wood
You know what I am talking about. For months, maybe years, you’ve been wondering whether that high-paid CMO or head of business development and their staffs are really worth the money. And you’ve thought about whether some of your consulting partners are pulling their weight when it comes to developing new business and expanding client work.
As terrible as this might sound, you now have the perfect reason to put these people under a microscope and take a good long hard look. Are they producing revenues exponentially higher than what you are paying them? Do they maintain a laser-like focus on the most important priorities? Are they highly respected in your firm?
If the answer isn’t a resounding yes, you deserve better. Bite the bullet and let your underperformers go, and find the very best talent you can that is best suited to your firm, your culture and your strategic objectives.
 Consider Non-Cyclical Industries
Obviously certain sectors, such as financial services and retail, are cutting back sharply on their consulting expenditures right now. Firms weighted heavily toward these and other sectors are now paying the price. The smart consulting firms realized years ago that they needed a balanced portfolio of industry sectors to carry them through the inevitable economic cycles.
What are some of these “non-cyclical” industry sectors? Two at the top of the list are public sector (particularly the Department of Homeland Security and the Department of Defense) and healthcare. A consulting firm I know had this realization about five years ago when times were good and built practices in both of these sectors. Today, they are reaping the rewards, and the leaders of that particular firm are certainly glad that they did.
If your portfolio of industry sectors isn’t balanced, you have options. Naturally you could acquire a firm that is strong in non-cyclical industries, though that of course presents a host of other problems.
Perhaps a better idea would be to build an adjacent practice to an existing one (e.g., if you have a life sciences practice you should consider expanding it to a healthcare practice that would include healthcare payers and providers). Or you could aggressively recruit a senior consultant with deep experience (and a deep Rolodex) in one of the sectors.
Oh yes, and don’t buy into the “public sector work doesn’t pay well” consulting myth. It’s just not true. I actually know plenty of consulting firms who have prospered doing work for the public sector.
 Re-Examine Your Marketing and Business Development Activities
You also need to take a hard look at the marketing and business development activities you are doing. I know of one consulting firm that spends an enormous amount of time (consultants and staff alike) on a marketing activity that garners them a wonderful piece every year in one of the most prominent business publications in the U.S. The problem is that the subject that this annual work covers isn’t directly linked to the core business of the firm—and thus results in virtually no business.
If you are a small firm that generates most of its business through network-based activities, then make sure that your marketing and business development activities are working hand-in-hand to maximize your investments in programs that make the most sense—like intimate gatherings with active follow-up vs. broadcast marketing activities.
If you are a larger firm with multiple practices and global reach, continuing to develop great intellectual capital, disseminate it smartly and ensure that you continue to build brand recognition remains key. Reallocate your marketing and business development activities to match both the industry sectors that are doing the best during this recession and craft the right messages given the economic backdrop each industry sector is operating within.
You should also insist on more measurement (Internet-based marketing makes this much easier, as does technology for tracking sales success). And if some of your consultants are only marginally producing, consider sales training programs. They work.
 Focus on Existing Clients—and Past Clients
The best opportunity to sell consulting work is to existing and past clients. We all know the enormous cost difference between maintaining existing clients and finding new ones. But it is amazing how poor some firms are at doing this.
So systematically “walk the halls” of your clients (at no charge) to meet new people and uncover new opportunities. Identify your most desired current clients, past clients and prospects (say 50 or 100) and orchestrate a deliberate, high-quality and value-added marketing and sales campaign. Consider hosting high-quality, value-added events for these folks that will keep your relationships active and fresh. And by all means call or e-mail them—or better yet, see them in person.
Try mixing up your senior consultants in new ways—such as teaming the one who “owns” the client relationship with another senior consultant who has deep knowledge in a different area. An unfortunate fact is that many consultants only sell what they know. Teaming that person with someone different may well help you to cross-sell or up-sell to a client to dramatically increase and extend your revenues.
Finally, make sure that when your consultants do get a meeting they have a very tailored and powerful point of view to share with the client or prospect, and by all means “give away” some consulting up front.
 Communicate, Communicate, Communicate!
In a sluggish economy, companies still need consulting services—and naturally some areas are in even greater demand. Besides calls and visits, conduct digital marketing via branded e-mail alerts and even banner advertising on industry or association Web sites that your clients frequent.
The next time you travel, be sure to contact as many clients and prospects as possible and line up meetings, lunches, dinners, etc. They will appreciate your checking in, and you just might uncover a great possibility.
The point is that your clients and prospects should be hearing from you on a regular basis and you should be prepared to say something that will capture their interest and result in an invitation to meet. After all, out of sight is truly out of mind—and in this environment you definitely don’t want to be out of mind.
Thomas J. Waite is the president and CEO of Waite Associates, which advises the leadership teams of consulting firms to create breakthroughs in their markets, dramatic increases in their revenues and substantial returns for their stakeholders. E-mail him at tom@thomaswaite.com.
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