Squashing the myths about winning new business
by: Peter Bartram
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Summary:
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How do consultants win new business? By word of mouth. At the golf club. Off the street...
...It's a question that until now has been a lot easier to ask than to answer, mostly because information about winning business was based on random anecdotes rather than systematic analysis. Until now that is...
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How do consultants win new business? By word of mouth. At the golf club. Off the street...
...It's a question that until now has been a lot easier to ask than to answer, mostly because information about winning business was based on random anecdotes rather than systematic analysis. And partly because consultants have traditionally been shy of talking about the grubby task of touting for business.
But that's all changing fast. Over the past decade, management consultants have taken a more professional approach to selling their services.
Yet despite this quiet revolution, most consultants still have only the haziest of notions about what works when it comes to selling their services -- and what is simply a waste of time and money. But that's all changing, too, thanks to what is probably the largest ever research project into how consultants and other professionals set about selling their services.
The project is headed by Professor Colin Coulson-Thomas of the University of Lincoln. Coulson-Thomas's team surveyed 511 firms of professionals in seven major categories -- accountancy practices, advertising agencies, engineering consultants, IT/telecommunications consultants, management consultancies, marketing/PR consultants, and firms of solicitors.
In each case, the firm's performance at winning new business was assessed against 120 issues and activities -- from the firm's existing sources of new business through to how it conducts the final negotiations with a potential new client. The results of this survey have been fed into a database that contains more than 60,000 pieces of data.
One output from the research is a report called Winning New Business in Management Consultancy...the Critical Success Factors, published by Policy Publications in association with the Institute of Management Consultancy. (There are also separate reports covering the other six professions.)
Of the 511 companies in the survey, 57.7% win less than half their pitches for new business, while 42.3% win more than half. Yet there are some striking differences between the professions. Accountancy practices are most successful with 62% of the firms winning more than half their pitches. They are followed by management consultants (58%) and IT/telecoms consultants (57%). By far the least successful are consulting engineers where only 21% of firms win more than half their pitches.
Researchers have used the database to pinpoint what appear to be the critical success factors -- those issues which make the real difference -- when it comes to winning new business. Across many of the 120 issues which researchers examined there was not much difference between the most and least successful companies. But there were substantial variations in certain key areas.
For example, while 67% of most successful consultancies win new business "frequently" from existing clients, this falls to 42% among the least successful. The disparity is equally striking with previous clients (33% to 16%) and even wider with referrals from clients (33% to 7%).
The most successful consultancies also score over the least successful in a whole range of other business winning activities including gaining contacts through professional organisations, cross-referrals from other business units within their firms, references from associated companies and referrals from former employees and former client employees.
Coulson-Thomas says: "The winners pay much more attention to developing their network of contacts. They are much more effective at exploiting a wider range of sources of new business."
This, as Coulson-Thomas notes, is a key reason why the most successful consultancies win more business. "As the gap between the most and least successful narrows as they get deeper into the bid process, so the ability of the most successful firms to start from a wider pool of prospects significantly increases their chance of success."
The research found many other differences between the most and least successful consultancies. For example, the most successful are more concerned about positioning themselves so that they attract invitations to pitch. Some 77% of the most successful consultancies regard their firm's "image and reputation" as important in helping to attract invitations compared with only 58% among the least successful.
Similarly, the most outscore the least successful on a whole range of other "attractors" such as track record in similar projects (67% to 52%), relationships with existing clients (77% to 68%) and reputation for reliable delivery (70% to 61%). Although some of the differences are not enormous, the cumulative effect across the board is to make the most successful firms appear much more attractive to potential clients.
Not surprisingly, the most successful consultancies outscore the least successful when it comes to communicating with potential clients during the bidding process. Among the most successful, 36% are "very satisfied" with their ability to develop person-to-person relationships with key individuals in the potential client. This falls to just 19% among the least successful.
Again, the picture is similar with other communication-related activities including communicating the distinctive nature of their expertise, addressing specific concerns of the potential client and providing access to previous clients or reference sites. While the differential in these activities is not large, the cumulative impact across all of them is significant.
When they fail to win a bid, it is striking that the most successful are keener than the least successful to know why they lost. Forty per cent of the most successful always review the factors leading to an unsuccessful pitch compared with only 19% among the least successful.
Coulson-Thomas says: "The big picture that emerges is that the most successful focus on those critical success factors that are really important to them, and then put in the extra effort to perform those activities to world-class performance. This is perhaps the key learning point -- to concentrate on what you know is important and raise standards."
Winning New Business in Management Consultancy and the other six reports are offered to Top-Consultant readers at a special price. Each report costs £58.75 and they are available from Policy Publications at
http://www.ntwkfirm.com/policy-publications/special-discount/ |
Author Details:
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Peter Bartram
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