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#722: Customer Service and Client Behavior

Posted By Mark Haas CMC FIMC, Tuesday, December 20, 2011
Updated: Tuesday, December 20, 2011
Anecdotal information increasingly points to consulting clients abandoning larger firms in favor of smaller, boutique firms. Although lower cost is often cited as the reason, I am hearing a lot about customer service and flexibility as the reason. Are there any data to back this up?

Be careful about assuming any one reason for clients to switch consulting firms. There are at least three reasons for such changes to occur over a broad segment of the market. Readers will likely come up with more.

First is a change in what clients are buying. As the US market slows, companies are increasingly buying services to help them be more efficient and flexible, and may be cutting back, temporarily or not, on M&A and systems integration, engagements that usually go to large firms.

Second, the flexibility issue has been an issue we hear all the time. Clients appreciate the fact that large firms have a "tested and proven" approach but are unhappy that the approach does not fit their needs. Client satisfaction is a big reason firms change consultants. Accenture's Global Customer Satisfaction Survey finds more than half of respondents changed service providers because of inadequate customer service. Service is the leading reason people choose a provider and outranks price by 20 percentage points as a reason for switching. As personal and relationship oriented as consulting is, it is reasonable to assume that these data are applicable, if not understated, for consulting.

The third reason is that many larger (non-consulting) firms are beginning to shed their internal consulting units. This is a typical cycling of building and disassembling internal consulting units as the economy makes it cost effective to maintain them on staff. As companies shed internal units, they typically seek specialized skills found in smaller firms without high overhead.

Tip: Rethink your processes and attitude about providing stellar customer service and pay special attention to signals from your clients that your service is slipping. Above all, just ask them if your service meets or exceeds their needs.

© 2011 Institute of Management Consultants USA

Tags:  client relations  client service  customer understanding  reputation 

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Michael E. Cohen CMC MBA says...
Posted Thursday, December 22, 2011
I agree wiht everything said about the importance of customer service. I'd be interested in how you are defining "larger firms" and "smaller boutique firms", which you mnetion in your first paragraph. Any way you wan to define them would be useful, e.g., revenues, number of consultants, etc.

I think many consultnats perceive large, medium and small consulting firms differently. For example, I have the sense that many solos would consider a firm with a 100 or even 50 0r 30 consultants as a large firm. While mnay large consulrting firms would define s8uhc firms as "small" and not even "medium-sized." What is your take on this? And do solos fit in the category of "smaller, boutique firms", or are solos in a separate category by themselves?
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Mark Haas CMC FIMC says...
Posted Friday, December 23, 2011
Size is usually related to number of consultants. I'd call small firms those with only a single administrative office (even if they have satellite offices with consultants operating out of those offices), so up to about 200-300 consultants is generally small, and medium might go up to close to 1,000. It varies by discipline, culture and size of engagements, the latter of which has shrunk considerably in the last few years.
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