Selling in a Bull Market
By Michael W. McLaughlin
As 2007 wraps up, many consulting firms chalked up another year of double-digit revenue growth and strong profit performance. And the demand for consulting services appears bullish as we head into 2008.
You might think that selling services in times of high demand is the easiest of the market conditions we face. Some firms will find that a "rising tide" lifts their boat. But for most consultants, the strategy for succeeding in a bull market is to make subtle changes in how you position your services.
Are You Ready to Run with the Bulls?
Like other industries, the professional services business experiences pronounced cycles. Spikes in client demand for services follow events such as changes in the regulatory environment, innovations in the application of new technologies, and evolving consumer needs—to name just a few.
Of course, it's tough to know which industries, or even which parts of your client's business, will be the source of new demand. But as that demand grows, consultants can ride the wave by paying close attention and adjusting their approaches to marketing and selling.
As you'd expect, when the demand for services grows, new competitors rush to market to take advantage of emerging opportunities. You can get trampled as new firms and individual practitioners stampede into the market.
In the 1990s, for instance, which was an era of historic growth for the consulting industry, entrepreneurs launched dozens of new consulting firms to help clients migrate parts of their businesses to the Web. Many of those new firms have since vaporized or morphed into different entities. But they took a large share of a new market that was created by innovations in information technology.
New firms aren't the only threat. Existing firms rarely stand still during an industry growth spurt. Instead, they expand their capabilities by recruiting new people, retooling existing services, and creating new lines of business. For example, early this year, global consulting firm Accenture announced plans to double its management consulting practice to 26,000 people in the next three years. That would mean hiring more than 700 people every month.
The bull market calls for a response akin to the "hurry up offense" in football. Everything must move more quickly, with precision, and no wasted movements (or words). Small mistakes can cost you big, but the reward for flawless execution can mean victory.
Sharpen Your Focus
In most sales situations, but especially in a high-demand market, a client's perception of your value drives the decision to make contact with you. Unless you have a prior working relationship with the client, that initial perception is based on your marketing materials.
Too many consultants fail to recognize that their value messages to clients need attention. What worked well in the past may not be potent enough to compete in a bull market. Why? As new competitors enter the market, the best ones will strive to separate themselves from competitors who represent the status quo. Other firms will resort to the copy-cat approach by mimicking the marketing communication strategies of others. That dilutes the power of all the messages.
A bull market magnifies this problem by a factor of how many new competitors you have. If you are saddled with an out-of-date value proposition, you can lose whatever edge your firm had in the past.
Revisit your value proposition and sharpen your focus. Instead of relying on tired offers to "help organizations achieve results," or "leverage all internal and external opportunities," or "tailor solutions" for every strategic change initiative, get real about the essential elements in the client buying process—solving specific problems, mitigating client risk, and proving your experience, delivery capability, and track record.
Stress the few areas where your firm is exceptional. And express that in terms the prospective client will understand. What, exactly, do you do to help clients? Discussing the macro trends and business issues the client faces is fine, but emphasize and clearly demonstrate your depth of capability.
Call Now
You can be certain that, in an up market, your clients are being bombarded—on a regular basis—by your competitors. Fiona Czerniawska, one of the industry's leading observers, notes that there are almost 3,500 articles and other forms of thought leadership material on the Web sites of the world's top forty consulting firms. And that doesn't include the thousands of case studies and other materials that support marketing, but don't rate the thought leadership designation.
Add to that the thought leadership material smaller firms are generating, and you've got a virtual mountain of stuff to discuss with prospective clients. And that's precisely what competing firms are doing. Whether it's through direct mail, cold calling, or other marketing campaigns, your clients are the target.
In a fast-moving market, doors open quickly but close just as fast. It's easy to completely miss a golden opportunity simply because you were out of sight, and out of mind. The remedy to this problem is simple—get to your clients soon.
Many consultants are reluctant to keep in touch with former clients. And others get frustrated with unreturned calls from clients and give up trying. Ford Harding, the well-known author and business development consultant, still fights the urge to stop calling past clients. Harding says, "After all these years, the little voice inside me says to give up, that it is not worth the effort, that the person doesn't like me and doesn't want to talk with me. It is by learning to override that voice that I have become successful."
Harding's experience is especially relevant in a bull market. Whatever your preferred approach to connecting with past clients, you're likely to benefit from accelerating the frequency of that contact in a high-demand market. When your former clients have new projects, help them think of you, not your competitors.
Never Stand Pat
Demand for services always heats up for a reason. In the 1990s, for instance, Michael Hammer and James Champy's concept of business process reengineering gave rise to scores of firms offering services to support an organization's transformation to a new business model. When the US Congress passed the Sarbanes-Oxley bill in 2002, a multi-billion dollar industry emerged to help organizations cope with the implications.
As powerful new ideas take hold, winning firms make rapid changes to their service offerings to stay one step ahead of the competition. Recently, for example, one firm has been integrating environmentally-friendly manufacturing processes to help clients align their businesses with their customers' wishes and the perceived direction of environmental legislation.
For each of your markets, ask yourself if your offerings match current demand. With some adjustments to your offerings, you should find it possible to disrupt your competitors' momentum and earn a larger share of new work.
Winning firms never stand pat with a service offer, but remain highly attuned to the market and react quickly to changes in demand. Sadly, some consultants hold onto history and watch the market pass them by. There are dozens of firms still peddling business process reengineering as a core offering when most firms moved on many years ago.
Grab the Bull by the Horns
In a bull market, a successful consultant can get buried with a strong backlog of profitable work. And, it is also easier than ever to let your ongoing market activities take a back seat to that client work. When faced with a growth market, it's wise to ratchet up your marketing efforts, not them dial back.
Never forget that what goes up, will come down. A bull market will eventually lead to an oversupply of service providers, who will be scrambling for work when the cycle turns.
In a strong market, you have the opportunity to add new, high-value clients to your practice. But you have to help them find you. Sequestering yourself in client engagements causes you to miss the potential upside of a bull market.
To reap the long-term rewards, you must grab the bull by the horns. After all, as clients' businesses change, your practice must also adapt by offering new services, boosting market visibility, and sharpening market focus. It's in a bull market that we should take the advice we often give to our clients: Be bold, take measured risks, and innovate as if your life depended on it.