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Stop Consulting for Free

April 21st, 2008 @ 4:00 am

14 Comments

Categories: General, Management, Negotiations, Sales Skills, Sales Tips

Tags: Consulting, Selling B2B, Sales Strategy, Sales Force Management, Sales, Geoffrey James

Evil Corporate BureaucratSelling B2B is “consultative,” but there’s a point where you need to turn the meter on.

The concept of “consultative” selling is that the sales professional should be adding value from the very start of the customer relationship. However, if that concept is taken too literally, you can end up providing free services to a prospect that never intends to buy.

This is particularly true when small companies are selling to large companies. People inside large companies often have only the vaguest notion of how businesses work. They think that budget dollars fall magically down the management chain and that everybody gets paid, whether work gets done or not.

When sales professionals from small companies sell to such behemoths, they’re often asked to spend an enormous amount of time and effort to develop the customer relationship. In the worst cases, they’re asked to provide entirely free services, even when the behemoth has no real intention of buying.

In fact, cynical corporate bureaucrats actually consider free labor from hopeful sales professionals as a viable cost-savings measure. I saw one example where a small software vendor developed detailed rollout and change management plans for a prospect, only to find out that the prospect planned from the start to buy from another vendor, but didn’t want to pay that vendor for (guess what?) a detailed rollout and change management plan.

For sales professionals working in smaller firms, sales expert Bob Beck of Sales Builders recommends taking a “Quid Pro Quo” attitude and refuse to do ANYTHING — even provide a brochure — without insisting that the client do something in return (like getting a commitment for a face-to-face meeting with a decision-maker.)

Beyond that, if your actually selling your services, and your participation is important part of what you’re selling, there’s a point — and it’s not all that deep into the sales cycle — where you’ve got to start getting the customer to pay for your services.

Let me put it this way. If you are truly capable of acting as a consultant and truly capable of adding value from the get-go, all the prospect should really need is a taste of what you have to offer. Keep up the free consulting past that point and there’s good chance that you’re just being taken for a ride.

UPDATE (4/23): An example of how to avoid “consulting for free” is provided at How Quid Pro Quo Selling Works.”

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  •  
    1

    dave.stein@...

    04/21/08 | Report as spam

    Consulting for Free

    Bob is correct about his Quid Pro Quo approach. It is especially difficult for sellers who work for smaller firms. Often enough, either through use of the carrot (the prospect intimates that a big, big, big, big contract is just waiting for the right vendor) or with the stick (do this or else you're out of the evaluation), the seller is manipulated into giving time, resources or knowledge away for free.

    Prospects have a responsibility to evaluate vendors as part of their buying cycle. Important: Sellers have a responsibility to qualify prospects as part of their selling cycle. (Think of the broad definition of qualification here, which includes interviews with recommenders, decision makers, approvers, etc.)

    Think Newton's third law of motion--for every action there is an opposite and equal reaction. In our world, for every evaluation, there should be an opposite and equal qualification. They get to evaluate us--we get to qualify them. (Qualify has the same root as quality. Qualifying is determining the quality of the sales opportunity.)

    When prospects take the position that it's one-way--they get to evaluate you, but you don't get to do your job--it's time to seriously reconsider pursuing the opportunity. You probably wouldn't have won the opportunity anyway.

  •  
    2

    Geoffrey James, Sales Machine

    04/21/08 | Report as spam

    Know when to bail

    This goes back to my post about knowing when to bail. If you can't get some kind of concession from the prospect, then you're not going to get the business. For example, if you make writing a proposal contingent on being allowed to present it to top management and the prospect balks, then you're probably being jerked around. If there were a chance that you'd get the business, you'd get access.

  •  
    3

    trinilisa

    04/22/08 | Report as spam

    RE: Stop Consulting for Free

    This is so absolutely true and relates to all types of businesses as well. Some company representatives really do not know what they are asking for and may intentionally or unintentionally demand much more of your time than you could or should afford. The use of carrots on a string, offering smaller jobs with the promise of a bigger contract is also one to watch out for.

  •  
    4

    chris_blackman@...

    04/22/08 | Report as spam

    RE: Stop Consulting for Free

    I've seen cases where large companies got a couple of small firms to provide them with a fully costed project proposal including detailed scope, KPIs, milestones and schedule of deliverables, then combined the two, and used the information to drive their own internal project instead.

    So now I package quotes so they don't provide an effective "how-to" methodology.

    Often, the bulk of consultant IP is knowing where to begin, so a detailed proposal can be the most valuable part of the work. And yet it's the part the client usually expects to get for free.

  •  
    5

    ConsultantYYZ

    04/22/08 | Report as spam

    The bain of my business

    Very often I am called in when a client has a problem, they assume it is in my area of expertise (brand), but they don't actually know what it is. In order to do a proposal I have to determine what their problem really is. After the so-called "Background" section of the proposal deck, we discuss alternative ways of addressing the issues. But, fact is, by defining the problem we have given away, for free, 50% of the value of the project.

    And then, in all too many cases, the large company uses our definition of the problem as the basis for and RFP that is sent out to our larger, more process based competitors who can easily determine a cheaper way of going about solving it (although, I insist, not a better or more effective way).

    This has happened at least three times this year and I really don't know how to deal with it.

  •  
    6

    denis.lorinet@...

    04/23/08 | Report as spam

    Stop consulting for free

    When applicable, I send a standard diagnostic questionnaire or I propose to deliver for free a 3 hours interactive training session. In both cases I do that only after the customer commitment for a one hour debriefing meeting. Two benefits :
    - You know better the hidden face of the customer's problem and she has learned that she can learn from you. Which makes things easier (but never easy. but you don't have delivered a plan for action
    - There is a clear distinction between free advices and a real project in both minds and before starting your investment, you can ask for a moral commitment "if you get ... from me then dear customer, you'll do ... for me"

  •  
    7

    Geoffrey James, Sales Machine

    04/23/08 | Report as spam

    Perfect!

    Note the quid quo pro in the demand for a debriefing meeting.

    This is how it's done. Thanks for a great real-life example!

  •  
    8

    dpitts@...

    04/22/08 | Report as spam

    RE: Stop Consulting for Free

    Great article and I am so appreciative for it and the timing of receiving it. Without any doubt, it will change the way I conduct business as early as in the next minute of completing the reading. Kudos Geoffrey

    Skipper

  •  
    9

    aletheia

    04/23/08 | Report as spam

    This is the sales training I'm looking for

    We prospected on of our clients for new business area - outsourced personnel administration. They were qualified and we believed we have all the sponsors, decision makers and influencer persons at our side. Problems were diagnosed,future challenges were identified...we did a lot of business analysis and market analysis for free in order to identify the right software solution that will support the outsourcing process. Not mention the implementation plan, the risk analysis, the internal transition and change management process watch outs and hints ...
    To cut it short, the potential client decided to buy the software and keep the function in-sourced.
    We still have other business lines active with this company but no satisfaction to work for them after all.
    I would use some practical advise. Now I know the problem, but I still have no clue how to avoid in the future a similar 'outcome"
    Ibi

  •  
    10

    Geoffrey James, Sales Machine

    04/23/08 | Report as spam

    Quid Quo Pro

    Essentially you get the customer to put some skin in the game so that they're more inclined to work with YOU because they've invested time and money in the relationship, too. Here's an example:

    http://blogs.bnet.com/salesmachine/?p=298

  •  
    11

    JacquesWerth

    04/23/08 | Report as spam

    RE: Stop Consulting for Free

    Excellent article Mr. James!

    One of the main detriments of consultative and solution selling is that they start the sales cycle much too early - in what should be the marketing phase. They are only one step beyond missionary selling.

    In High Probability Selling, time and resources are not wasted on low probability prospects. That time is used to find prospects that are ready, willing and able to buy - now. Since therr are an abundance of them, we don't need to accomodate demanding propsects.

    We do not make any commitments, not even to draw up a proposal, without suitable commitments by the prospect. And, we don't count nebulous promises, such as "we will give your proposal serious consideration" to be suitable.

    We only do business with prospects with whom we have a profound relatiionship of mutual trust and respect. Therefore, a vary high percentage of them honor their commitments.

    That is how the top one percent of salespeople do business.

  •  
    12

    diaskurian

    04/23/08 | Report as spam

    RE: Stop Consulting for Free

    yes! yes! yes! I just gave an appropriate bill to my smart-ass client. I don't care if they pay or not. I am not going to work for freeeeee!

  •  
    13

    STNPR

    08/04/08 | Report as spam

    RE: Stop Consulting for Free

    We have offered a FREE PR Consultation to my prospective clients for over 10 years now. And it has always worked amazingly well.
    Not only does it help the prospective client see the benefit of what we provide -- it also helps us to determine if this prospect is an ideal client for our PR/media exposure services, or if we should refer them on to some other PR firm in our network who may specialize in their market.

    Even though we don't make revenue immediately from a consult, I look at it as time well spent. Well over 70% the prospects we've consulted with over the years have turned into contracted clients very shortly after the consult.

    Todd Brabender
    Spread The News PR, Inc.
    Generating media exposure for
    innovative products, services and experts.
    785.842.8909
    todd@spreadthenewspr.com
    www.spreadthenewspr.com
    Check out Spread The News PR's recent front-page feature in the Wall Street Journal:
    http://online.wsj.com/article/SB119800161598537205.html

  •  
    14

    vwalker90

    08/05/08 | Report as spam

    RE: Stop Consulting for Free

    Great insight on business judgement and wisdom applied.

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