This is the worst market we've faced in our lifetimes, says Bob Potter, managing principal of RA Potter Advisors, a sales strategy advisory practice that helps consulting professionals acquire and retain clients and accelerate business relationships. In the last downturn, consulting services became hyper competitive as providers chased fewer and fewer projects, he says. Many firms went out of business while others cut staff by half. Few service providers survived unscathed. But this time around, Potter says firms smart firms will turn this crisis into an opportunity. He will present "Five Keys to Surviving—and Thriving—in the Downturn" at the Consulting Summit in Chicago on Wednesday, May 6. For more information on the summit or Potter's presentation, click here. [Link]
Consulting: What lessons can consulting firms learn from previous economic downturns to sharpen our survival strategies for this hostile market?
Potter: Based upon the last downturn, we can make a few predictions as to which service providers are most likely to be road pizza in a hyper competitive market. The biggest losers will be service providers who don't have extremely loyal clients, don't dominate their market niche, don't have a clear differentiated and provable value proposition, don't know how to win in competition, and don't know how to or are unwilling to return to proactive selling.
Consulting: Let's start there. What do you mean by being pro-active in selling?
Potter: I mean create business don't wait for it. During the last downturn so many people were busy cooking they forgot how to hunt. In hot markets you can afford to sit back and let the business come to you. When you don't need to hunt, you can focus on cooking. In hyper competitive markets if your first contact with the client is when you receive the request for proposal, you have already lost. It's time to relearn how to hunt. Sharpen your sales skills and get back into the market. In competitive markets you need to get to the client first even before they have decided to use the services that you and your competitors offer, and then escort that decision to become the preferred or sole provider. The idea is to engage clients earlier in their decision process and win the business before it becomes competitive. The best way to win in competition is to avoid competition.
Consulting: But isn't winning new business right now more difficult than it's been in a long time?
Potter: It is. That's why firms need to redefine their value proposition to position their services against the competition. In competition, your perspective client has one question: "Why should I choose you over your best competitors?" If you do not have a clear and compelling answer to that question, you are going to lose or be forced to compete on price. Most firms use almost identical language to answer that question. Most of the words that are used to sell their services are very similar to words their competitors use.
Consulting: So, how can a firm differentiate itself?
Potter: Craft a compelling positioning statement that clearly and concisely communicates how you achieve a better outcome with less risk, less client effort, less disruption and fewer surprises—and faster than your best competitor. Most importantly, prove it with relevant stories, benchmarks and client testimonials. That is no easy task. But if it is hard for you to communicate how you are different and better, how does the client choose you? Once clients narrow their options to a short list of the most qualified, small differences in capabilities no longer build preference. At that point, clients want to work with someone they know and trust, someone who knows their industry, their market, their company, their situation, their project, their preferences and their process better. In other words, instead of wanting to know more about you, they want you to know more about them. They don't want to work with a vendor. They want to work with a strategic partner. If you do this and then deliver, you'll have a client for life.
Consulting: I know you're a big believer in client loyalty… are clients still loyal in this environment?
Potter: Client loyalty has never been more difficult to attain. Traditional service satisfaction attributes like experience, capability, timeliness, thoroughness and responsiveness have become minimum requirements and are no longer differentiators. They are table stakes in a more competitive world. Client satisfaction is not enough. Our research shows that highly satisfied clients are twice as likely to be loyal as satisfied clients. Highly satisfied clients arise from deeper personal and strategic partnerships.
Consulting: I think most firms would tell you they have satisfied clients…
Potter: But many do little or no client satisfaction tracking. If they don't do it now, I strongly recommend that they start now before their only client satisfaction indicator is their competition doing the next project. And if your goal is a satisfied client, you are setting your sights far too low. Satisfied clients invite you to compete again. But highly satisfied clients not only give you follow on business (frequently sole sourced); they also refer you to others. They become in effect a surrogate sales force.
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