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Between 2005 and 2011, IMC published Daily Tips every weekday on consulting ethics, marketing, service delivery and practice management. You may search more than 800 tips on this website using keywords in "Search all posts" or clicking on a tag in the Top Tags list to return all tips with that specific tag. Comment on individual tips (members and registered guests) or use the Contact Us form above to contact Mark Haas CMC, FIMC, Daily Tips author/editor. Daily Tips are being compiled into several volumes and will be available through IMC USA and Mark Haas.

 

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#693: What is Your Consulting "Killer App?"

Posted By Mark Haas CMC FIMC, Wednesday, November 9, 2011
Updated: Wednesday, November 9, 2011
If many of the services a consultant provides (e.g., assessments, process reengineering, market research) are increasingly commoditized, and the pace of change in most industries renders "long experience" less valuable, what is left to the professional consultant to differentiate their services from any other consultant?

Every discipline, business and individual has something that differentiates it from its competitors. It could be the unique value proposition, the proprietary technology or the brand. Given the nature of the profession and the implied value of creative, customized service, the equivalent for a management consultant might be called the "killer app."

The definition of a killer app (applied to computer programs) is a program or element of a program that makes it indispensible to the operation of a larger program or a "must have" product that compels purchase of the platform on which it resides. Bill Gates described Internet Explorer as a killer app in that it was so useful that it would induce people to buy Microsoft products. In the same sense, consider consultants who have a similar service, database or capability that is so powerful that it compels clients to seek them out - despite the fact that most of their services are indistinguishable from those of other consultants. The platform is your suite of consulting services, among which is your killer app.

This is a similar to a strategic competitive advantage but does not have to be as grand in its scope. Since clients are selecting from your suite of (largely intangible) services, they are looking for some (marginally tangible) service they can relate to and appreciate as unique and valuable. In this sense, your whole practice does not have to be superior, just one or two compelling items.

Tip: Find (at least) one service, asset, capability, set of data or infrastructure that you have created, that few others could duplicate, and that you know is an easy sale to clients. This establishes your services as high value, making offering additional (non killer app) services easier and giving you a position of relative strength to negotiate their value.

© 2011 Institute of Management Consultants USA

Tags:  competition  consulting skills  consulting tools  innovation  intellectual property  knowledge assets  presentations  product development  prospect 

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#684: How Has Consultant Compensation Changed in the Recession?

Posted By Mark Haas CMC FIMC, Thursday, October 27, 2011
Updated: Thursday, October 27, 2011
A lot of consultant left the profession, even large firms trimmed staff, and rates took a significant hit during the recent economic downturn. What are the prospects for rates returning to former levels any time soon?

Remember that consulting lags the general market by about six months. However, this economy is not a typical recession; it is a credit crisis, with a significantly different profile. However, it does appear that consulting employment and fees are strengthening. Large consulting firms are hiring again in response to deferred work at their longer term clients. Also, many of those consultants laid off during the downturn are either being rehired or starting their own firms.

Logic might indicate that consulting fees would remain low with growing supply of consultants and still soft financial health of business in the US and Europe. Top-Consultant, in its Salary Benchmarking Report 2011/12, reports that compensation in 2011 is still lower than in 2009 for most people in most consulting specialties. However, this is in part due to hiring of many junior consultants who are more than offsetting departure of senior employees. In Australia, Europe and the US, the number of consultants receiving no pay raise in 2011 was about 45% and for those who did receive a raise, it was about 6%. (The data vary by specialty, geography, and seniority so see the report for greater insight).

Tip: We are not out of the downturn yet. Although strategy and business transformation specialties command the highest compensation, one conclusion is interesting. Compensation for the highest performers, particularly from bonuses, is strong. For those who are at the bottom of the performance scale, raises and bonuses remain either missing or small.

© 2011 Institute of Management Consultants USA

Tags:  competition  consulting  fees  trends 

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#580: We Can't See What We Don't Look For

Posted By Mark Haas CMC FIMC, Friday, June 3, 2011
Updated: Friday, June 3, 2011
My partner and I run a boutique consulting firm with essentially no competition. We are looking to expand and wonder what markets are likely to have similar low competition, sort of a "Blue Ocean" strategy.

Claims that "we have no competitors" are fairly common among small consulting firms. At first glance, this would seem to be because service quality is so exceptional and client access so robust, that no other firm could hope to break into this gravy train. What is more likely is that the market for services is so provincial that it is overlooked by any serious competitors. This is not a bad thing, but shouldn't be mistaken for noncompetition.

Service commoditization, globalization, fast cycle mimicry of new services - all are trends that may make a consultant's small parochial market in danger of being invaded. Around the world, native species of plants and animals are being overwhelmed by invasive species. Most of these invaders have been ignored by most governments, despite warnings from biologists. Finally, after commercial losses have mounted into hundreds of millions of dollars, suddenly snakehead, kudzu, lionfish and melaleuca are household words to farmers, ranchers and fishers. So much for protected "markets."

Tip: If we presume there is no competition for our services, we will never see it coming when it does. Be proactive and ask your clients if they didn't use you to provide advice and technical services, who would they use. How would they go about finding another source, including insourcing, to receive what they receive from you. Conduct a survey in your space of what consulting services are most valuable for your industry. Then, ask how users of those services would cut expenses or increase speed or breadth of service delivery. If you think hard enough, you may come up with some troubling answers on your own. But don't presume you are free from competition.

© 2011 Institute of Management Consultants USA

Tags:  competition  market research  planning  product development 

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#382 : You Can Now Buy Consulting Services From The Menu

Posted By Mark Haas CMC FIMC, Tuesday, August 31, 2010
Updated: Tuesday, August 31, 2010
It seems that increasingly I am underbid by someone offering fixed rate services at rates that I can't compete with. My consulting service is impeccable and clients seem to keep coming back, but I am afraid my competitors will continue to cut into my business. Any advice?

You are not dreaming about this phenomenon. Services are increasingly being commoditized and sold off schedules. This started in force with the federal government that, along with health care, is the largest consumer of management consulting services. Want a strategic plan? Buy it off the schedule. Need to train your staff in lean manufacturing? Again, pick from a menu of vendors, some much lower priced than others.

Some consulting services are really commoditized. They are becoming undifferentiated in the eyes of the consumer, despite our feelings of how unique they are. This has become especially true of assessments and training. Need to "check out" your people? "Hire a firm to do a DISC, Harrison, MBTI, Prevue or any other one. They're all the same so just get me the cheapest one."

To see an example of this phenomenon, go to GSA Advantage, the government's procurement schedule. Search for "strategic plan" and see if your prices and offerings can compete with the 4,000 companies who will sell you one. (Note that the federal government negotiates rates that are discounted from commercial rates.)

Tip: Create a menu of your services. How would you sell a specific outcome (e.g., marketing plan, performance measurement system, process design, more effective sales force, supply chain security) for a fixed price? Not easy, is it? Put yourself in a client's shoes. Menu pricing makes it easier to see if you are providing something of value and not based on your hourly rate - you may be over or under pricing your services. With that warning in mind, the only way to compete with commoditized services offered by your competitors is through differentiation of your services in the mind of the client - the a la carte items that can't be sold as substitutes of each other.

© 2010 Institute of Management Consultants USA

Tags:  competition  market research  marketing  product development  proposals 

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#282: Do Clients Insist on Your Brand?

Posted By Mark Haas CMC FIMC, Tuesday, April 13, 2010
Updated: Tuesday, April 13, 2010
My services (process improvement) are similar to those provided by dozens of other consultants. I don't even know how many competitors I have, but there must be a lot because I am not getting as many engagements as I should. How do I increase my win rate?

It's not clear how to respond to your statement of how much you "should" be winning. However, there is one thing you can do to make sure you win engagements from clients who pick from a basket of similar consultants or decide solely on price.

What if you could create in your prospective customer's minds an insistence for your brand, not merely brand awareness. We are all aware of a lot of brands such as sports teams, soft drinks, and automobiles. However, we are somewhat indifferent between them if we had to make a decision under duress and would find any one of the items in these categories acceptable for entertainment, thirst quenching or transportation.

You say you don't know who your competition is, but you do know that there is a reason why your clients selected you over your competitors. Ask each of your clients what it was that they saw in you that made you the most attractive choice.

Tip: Perhaps more important, ask them what would cause them to select someone in the future, and how your services, reputation, pricing, ethics, etc. align with those criteria. This is the kind of solid market research you need to solidify your brand so that prospects will insist on it.

© 2010 Institute of Management Consultants USA

Tags:  brand  brand management  client relations  competition  customer understanding  market research  marketing  reputation 

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