May 20, 2017 12:06PM
By Karl Schaphorst
There is a list of basic rules of truth that govern the survival of businesses everywhere. While there may be debate on which rules belong on the list, one rule that all businesses owners and managers agree on is: Nothing happens in business until somebody sells something.
Thus, the high-performance salesperson is one of the most sought-after professionals in business. However, perhaps the foundational rule listed above does not apply when consulting is the product for sale. Do consultants need to be professional salespeople or can they reside safely in their core competency and grow the business from there? This is what we will examine.
Let’s say ABC Consulting provides mechanical and electrical consulting services to architects and consumers. The owner, “Dave,” employs a couple of drafters and a couple of professional engineers. He admits there is little development and/or training in the area of business development for the people that carry the “sales” responsibility. They do get training on the area of expertise in which the company consults: Seminars, webinars, ASHRAE-sponsored trainings, P.E. exams, vendor-sponsored trainings, and lots of self-study on system application, building codes, load calculations, energy, LEED, building commissioning, and on and on would accurately summarize the annual training regimen for Dave and his team. And why not? A big reason customers hire ABC is because they are experts in their field.
Dave was reflecting on how his business remained somewhat flat the previous year despite a record number of proposals going out the door. Historically, the primary source of new business came from his referral network. The owner has a vision for growth, so, in addition to the referral business, he decided that responding to as many requests for proposals (RFPs) as possible would be the way to accomplish his vision. Reflecting back, it did the opposite. The business revenue did not go down, but all the hours his employees invested in preparing RFPs (that in the end did not turn into new business) increased overhead and cut into margins. He instead got lots of late nights away from families and overtime hours from his employees, which has slightly damaged morale. Now, Dave ponders, what will be his business development strategy going forward?
Consultants are experts in their fields, and the customers want their expertise because it brings tremendous value to the customers’ business. However, customers don’t want to pay for the consultants’ expertise. So, they simply ask to have it for free, and one form of this ask is the RFP. The problem is that once the customer owns the consultant’s expertise, the customer has the power. The information can be compared to competitors who will adopt all good ideas and do the work for less or, worse yet, the customer will take the ideas and do the work in-house. Therefore, it can be said that responding to RFPs is not selling.
I would agree that professional sales should not be the leading competency for the architect, consulting engineer, or other professional service provider. But this does not diminish the importance of having a system for selling. Here are some simple steps of a selling system that the consultant or architect can begin to implement in their business.
1. Agree Upfront
Before doing any free work for a customer, get a clear understanding from them that if you do the work they are requesting to their satisfaction, you get something in return. If they don’t give you a clear path to getting their business, the wise decision would be to decline. For RFPs, if you don’t have an upfront agreement, it is too risky to pour your work into them only to have it auctioned off.
2. Why Would This Customer Hire You?
Prepare a list of great questions that will fully examine the emotional motivations this customer would have to hire a consultant. Pain is a huge motivator in people, and if your questions uncover the pains the customer is experiencing, you will have a big advantage in winning their business. If a doctor examined me and determined that I have a sickness that could be fatal without surgery, I am not going to ask the doctor for a bid and then get two more and go with the low-cost bidder.
3. Deal With Money Upfront
Ask the customer if they have money early in your conversation. Otherwise, you may do a bunch of work for a customer that, in the end, is broke. They must prove to you they have the ability to pay and a willingness to give their money to you, or else you will respectfully end the conversation.
4. Who Makes the Decisions Around Here?
Ask the customer who is involved in the selection process how the process will be handled. If you are going to present a solution, it is important that those who see it have the capacity to buy it. It is incredibly deflating to learn, after working out the solution, that the person who received it can’t make the decision to buy it.
This column was printed in the Summer 2017 edition of B2B.