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#41: The Coming Online Auction for Professional Services

Posted By Mark Haas CMC FIMC, Monday, May 04, 2009
Updated: Monday, May 04, 2009
As more and more services are being sold by schedule, I am wondering if the market for consulting services is going to evolve (or devolve) into a bidding war. What do you hear?

It has been an interesting evolution for selling professional services over the past three decades. Before 1977, when the Bates v. State Bar of Arizona case ended the prohibition on attorney advertising, professional advertising was sold practically only by "person to person." Fast forward to the last decade when the federal government started to purchase services off of a schedule. Then these services extended to professional services, like management consulting. Now, management consulting firms are listed with services to purchase. Need a consultant? Now you can buy Accenture, the Hay Group, Booz Allen or any consultant global to solo off the rack.

This is the great leveler. Although reputation and capabilities still matter, the previously automatic advantage of cachet is quickly disappearing. If clients want a three person engagement team, they may well buy from a small or large firm. What is more interesting is talk of buying professional services at online auctions. It is only a short leap from services schedules to auctions. Hard to believe? No one thought lawyers would advertise thirty years ago, and no one thought consultants would be picked off a shelf ten years ago.

Tip: Listen to Jim Jorasch, head of R&D for the company that launched Priceline for a (short) video on where his company thinks this market will go. And start thinking how your marketing will have to change as the ground shifts again.

© 2009 Institute of Management Consultants USA

Tags:  marketing  sales  trends 

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Mary Adams CMC says...
Posted Monday, May 04, 2009
In working on our book on intangible capital, I have developed a better understanding of the range of value of knowledge products. Most knowledge is free. Knowledge products like books are relatively cheap. Knowledge services are more expensive but they are still quite generic. The greatest value of knowledge comes when you can help people solve their problems themselves through a software or solution.

I see more consultants trying to "productize" their knowledge. This is not easy to do but there are good reasons to try. This trend will continue. In fact, I think that packaged solutions will disrupt the largest consulting firms' business models. The story of the knowledge economy is the power of the masses--that means that the expertise of your people must be tapped rather than relying on a team of junior consultants from a big consulting firm. Management consultants will move more and more into a role of facilitators, helping companies accomplish their goals rather than just handing down "the answer" (which, arguably, was never the true role of a consultant).

Alan Weiss would tell you to set yourself apart so the value of your thinking comes at a very high premium. This is also a valid strategy--and one that you should pursue whether you develop a product or not. But it may not be enough.

These trends will lead to a need for clearer definitions of competencies by consultants. Just as companies put together virtual teams internally in order to balance competencies, so will they want to put together teams of consultants. This means that consultant competencies must be defined and, yes, certified.

That's why the CMC designation will be increasingly important to distinguish individual areas of expertise from general competence to help managers improve organizational performance.
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