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#954: Order Before Midnight! - The Place for Incentives in Professional Services

Posted By Mark Haas CMC FIMC, Wednesday, December 31, 2008
In tough economic times, many businesses provide incentives for buyers of their products and services. As unseemly as it might be for professional services providers to offer such inducements, does doing so make any sense?

Never say never. A decade or two ago, no lawyer or doctor would dream of advertising their services. Now it is commonplace, and, in some cases, rather dog eat dog. Management consulting firms never used to advertise but now magazines (mostly business), television (usually public channels) and sporting events (of course, mostly the more "refined" sports like golf and tennis) are home to ads of big name firms.

As for incentives, they come in all forms. An incentive is any tactic, financial or otherwise, used to make a buyer select your product over another. In a sense, we all use incentives already. Although maybe not a rebate or discount on fees, it might be a modest free consultation, white paper, access to our research, or inclusion in a semi exclusive special group. These range in impact from economic (free) to social (being a member of a group). When economic conditions create pressure on substitutable services (i.e., your services are not unique and may be pressed into becoming a commodity), many consultants should consider some form of differentiation, even if it means an incentive of some kind.

Tip: Consider what drives buyer behavior in your market. For many in tough economic times, it is not so much sticker price but the aversion to making a mistake and wasting money or time. Any incentive you can provide that reduces perceived risk and begins to contribute some value to a prospective or current client will be appreciated. Be creative without diminishing the perceived value of your core services (i.e., don't cut your fees). For example, think about a loyalty program for your best clients (maybe invite them as your guest to an IMC program) or participation in a industry executives roundtable (invite a dozen executives to meet one another at a hosted dinner to discuss a specific topic in your industry, which you would facilitate). Well-designed incentives can really work for consultants.

© 2008 Institute of Management Consultants USA

Tags:  fees  marketing  prospect 

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