By Tom Rodenhauser, Managing Director, Advisory Services
Because of the power advisors wield, clients often feel beholden to their consultants. As a result, consultants have what I call a Don Corleone relationship with their clients: "Someday," says the Godfather/Consultant, "and that day may never come, I will call upon you to do a service for me."
The "service" consultants may someday require? Why more business, of course.
Like doctors, consultants' services are predicated on sickness. Doctors who cure patients earn their trust, but after providing the cure, they might never see a particular patient again. Consultants who forge life-long service relationships with clients, on the other hand, create a paradox.
Consultants don't walk away from a client due to some variation of the Hippocratic Oath. The reality is that after solving a client's problem, a consulting firm's business model—particularly at the large global firms—requires diagnosing new problems at those same companies.
The practical implication is that companies find themselves using the same consulting providers time and again, to the point where there's little rationale for the preference that drives using preferred providers. In fact, from research we've conducted, clients' love for their preferred providers is manifested in ways that actually drive down real affection (i.e. price-value ratio).
Think about it. How many times has a client offered a provider an increased amount of guaranteed work in exchange for discounts? The implicit message: the more valued the provider, the cheaper the service. It's like buying your spouse a happy meal for your Diamond Jubilee.
Doing a good job is a prerequisite to getting your next job. Securing new business rests on properly satisfying the client's needs the first time around. Then, it's the client's move to re-engage. I've witnessed many sales pitches by consulting providers that ignore that reality.
Worse, such aggressive sales tactics have often supplanted traditional relationship marketing efforts that informed clients of consulting providers' capabilities and differentiation. The problem is even more acute today as several global consulting firms have scaled back, and even gutted, their marketing and communications budgets and staff.
We've done considerable research concerning where consultants spend their money. Consultancies allocate, on average, about 5 percent of total revenues to marketing and communications. Those activities run the gamut from publishing collateral and updating websites, to securing press coverage and participating in client-oriented forums. Effective thought leadership and similar marketing efforts soften the industry's reputation. Postulating on corporate problems and identifying cresting business trends elevates consultants as folks who care about their clients and think about their future.
If the big firms see marketing as an expense rather than a necessity, and suffocate marketing as a result, consultants move further into the realm of "predatory solution provider." The clients, meanwhile, become increasingly suspect of their consultants' motivations. Granted, we're all in this business to make money. But professional services have historically stressed professionalism first and foremost.
Scouting for new engagements before the ink dries on the initial SOW is like asking the Godfather for a favor before establishing respect. And we know what happens to those people who disrespect the Don.
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