Consulting Midterm Topic 5

Front 1

Sourcing Engagements (Initiating Contact)

Back 1

Account Manager (Partner/Director) Developed
Referrals/Client Initiates Contact
Responding to Requests for Proposals (“RFP”)

Front 2

Account Manager (Partner/Director) Developed

Back 2

Long-Term Relationships
Target Marketing
Cold Calling (Rarely creates immediate project work – but if done well can help create recognition)

Front 3

Referrals/Client Initiates Contact

Back 3

Qualifying the opportunity
Understanding the motivation and project status

Front 4

Responding to Requests for Proposals (“RFP”)

Back 4

Proposal Investment is typically at risk although RFP requirements may be
significant (often a low probability of acceptance)
Success rates here will be typically low (without some pre-existing relationship)

Front 5

The Life Time Value of a Client

Back 5

Front 6

Selling Consulting Services

Back 6

For the Most Part Consultants are Delivering an Intangible Product (Notable Exception: Consultants who are Selling IT Hardware or Application Software Solution)
The Deal is Shaped and Won Through Personal Selling Techniques
Critically Important are:
TRUST (The Client MUST BELIEVE that YOU and the FIRM YOU Represent are the Answer to Their Problem)
Existing Relationships (between the Clients organization and YOU and/or the FIRM)
Brand (if existing relationships do not already exist)
For Government and Price Sensitive Clients the “value” is different – low cost often becomes the deciding factor
It’s everyone’s responsibility to sell (at the junior level its about professionalism, demonstrating competence, and being alert to opportunities to turn over to more senior people)

Front 7

Who is the Real Client -- Organizational Influence Map

Back 7

Front 8

Developing Business

Back 8

Starting point for client engagements

Critical to identify the right client
issues and optimal working
relationship

Client/consultant behaviors during this phase will model those behaviors that will demonstrated during the engagement phase

That said .. to the maximum extent making make the proposal process
Collaborative - don’t sell the client, instead solution the client

Front 9

Developing business is about..

Back 9

About gathering facts, analyzing the client’s situation, and crafting a theory of the problem

Front 10

Formality depends on:

Back 10

How well the consultant and client know each other.
Expectations from the project.
Level of resources committed to the project by the client.
Investment by the consultant in making the formal proposal.
Need to communicate within the client business.
Need to inform third parties

Front 11

Important to reach a consensus about key project ...

Back 11

parameters and establishing nature of working relationship

Front 12

Initial Contact
Begin a Professional Relationship
Develop an Understanding of the “Request”
What are the two aspects?

Back 12

1)Course of Action that
Requires an Understanding
Of a Situation or Problem
Being Experienced by the
Client
2)Simple/Obvious
Course of Action
(That May Require Some
Clarification)

Front 13

The Needs Assessment

Back 13

The purpose of conducting a needs assessment in the developing business phase to frame and define the client's problem. Typically a needs assessment also includes understanding the gap or difference (functional, technological, financial, market, human resources, etc.) between the current state and a future desired state

Front 14

A Needs Assessment Addresses the Following

Back 14

Current situation and how they got there
Dimensions and dynamics of the current situation
What a future state is needed (the objective)
Practical features or specifications of the future state
Internal and external factors causing the gap and any causal factors.
Factors driving and hindering closing the gap (force field analysis)
Other project related expectations
How does the client want us to work with the organization (roles)
What is the client's personal exposure (career or power concerns)
What do we need to do to exceed the client’s expectations

Front 15

Gathering Facts -- Interviews

Back 15

The needs assessment typically involves interview(s)
as the primary form of data collection

Front 16

Closed Questions

Back 16

Lead to yes or no answers (or a selection among alternatives). Pins the client down.
Usually asked about preferences or specific requirements. Also use when you have
a limited amount of time. Can be used to interrupt a long-winded answer.

Front 17

Open Questions

Back 17

Requires the client to open up, explain, describe, elaborate, expand, with the intent to provide a lot of information. Example: The 5 whys. Or questions that begin with describe, or explain, etc.) Key to gaining an understanding or rationale. The downside is that a client can go off on a long unproductive tangent.

Front 18

Leading Questions

Back 18

Leads to an answer that the consultant wants. Example: “Don’t you think its time to eliminate that data entry function?” Can be useful but use with caution. They may be perceived as pushy, arrogant (especially in the early stages of a relationship). Consider softening by saying “ if you don’t mind me saying ….”.

Front 19

Loaded Questions

Back 19

Don’t use – clear sign of inexperience. Loaded questions are leading questions questions that usually convey a negative judgment. “Wouldn't it be smarter if we just eliminated this function”. Better approach “What would be the implications if this function were eliminated?”. Then drive down with the 5 whys if necessary. Loaded questions make the client uncomfortable.

Front 20

A Framework For Asking Questions

Back 20

Situation Questions
Problem Questions
Implication Questions
Need-Payoff Questions

Front 21

Situation Questions

Back 21

these questions are directed towards understanding the size, scale, and scope of the situation to be dealt with. Examples: What is your
current profitability by product line (total gross margin, gross margin %)?What is your targeted level of profitability by product line?

Front 22

Problem Questions

Back 22

– these questions focus on the precise nature of the problem including key business/technical/political issues. Examples: To what extent have profit margins eroded over the last three years and would the erosion be attributed to 1) rising manufacturing costs 2) pricing decisions, and/or 3) changes in market

Front 23

Implication Questions

Back 23

these questions are intended to have the client think about the problem from a different perspective. Example: If the company decided to eliminate the unprofitable Eco Skis line of products, how would that impact your
co-marketing relationship with Patagonia

Front 24

Need-Payoff Questions

Back 24

these questions examine potential solutions and the clients reaction to those solutions. Example: How would it help if you implemented an automated customer scoring system.

Front 25

Before You Get Carried Away with Problem Definition Remember ...

Back 25

The request may be for a simple provision of a service
(e.g. facilitating an off site meeting, or developing a
comparative analysis (benchmark) of some product or
capability relative to the competition, or to provide
a resource to fill a gap); or

The purpose of the project may be to better identify the
problem and then develop recommendation for a more
specific analysis

So you your expertise and/or common sense to determine
when its actually necessary to drill down into problem
definition

Front 26

The Proposal

Back 26

Proposals can be as informal as a oral conversation with a follow-up eMail (think Internal Consultant) to a multi-volume document delivered in a large trunk (think response to a massive RFP)
The effort put into the proposal should be related to the size (typically thought of in terms of potential fees) of the opportunity
A best practice to to have the more complex proposal developed as a joint effort that included prospective client participation. In some cases the client will be eager to help out (particularly if the client and consultants have a long term relationship already) in other cases not (more often the norm in terms of developing responses to RFPs)

Front 27

Project Related Expectations

Back 27

client related
consultant related

Front 28

Client Expectations

Back 28

Quality standards and quality metrics
Adherence to client standards and methodologies
Updates and status reports
Completion dates
Knowledge transfer
Other (can be anything – you have to ask

Front 29

Consultant Expectations

Back 29

Use of client personnel, facilities and equipment
Access to needed participation (from client personnel)
Access to client information and secondary data sources
Timely decision-making
Prompt payment of invoices
Use of client as a reference
Ownership of Intellectual Property created by the engagement for firm use

Front 30

Developing the Proposal

Back 30

Perform a needs assessment
Develop a solution hypothesis
Determine firms knowledge
capital (appropriate to the
problem)
With the client:
continue to meet
jointly define problem/issues
negotiate around constraints
agree to work approach and
timeframes

Front 31

The Proposal Document (Dos and donts)

Back 31

Dos:
Be persuasive
Must contain “Client-Focused” Content
Demonstrate an understanding of the customers needs
Focus on the results (goals)
Keep it simple. Avoid jargon, too much technical detail
(unless specifically requested)
Keep credentials brief and relevant. Differentiate yourself

Don’ts:
Be generic
Just provide an “information dump”
Forget to carefully read, edit, spell check, use good grammar

Front 32

The Proposal Document

Back 32

Introductory Paragraph
(firm appreciates the opportunity to propose on the ______ project)

Background
(demonstrate an understanding of the client’s problem and the activities that led up
to the development of the proposal. This section will typically lay out the project
“scope”, e.g. what’s included, sometimes what’s not included)

Objectives and Expected Benefits
(to solve a problem, to provide knowledge transfer, etc. Whatever was agreed to and
what must be delivered to meet client expectations)

Project Plan
(work approach (methods), major tasks, responsibilities, and important deliverables.
Will also include statements regarding how the project will be managed)
Timetable
(usually a milestone chart with explanation)

Fees and Expenses
(includes clients costs and any terms of payment. Typically expenses are charged
at actual and maybe capped at a % of fees. Fees may be stated as an hourly rate or for an entire project. If project fees are stated then they may be capped at a specific amount, or open ended and indicated as an approximation only)

Qualifications
(explains why the firm is best qualified to assist with the project)

Ending/Signature Block
(usually a statement of commitment to the client; signed by an officer of the consulting firm)

Front 33

Project Planning

Back 33

Front 34

Sample Workplan

Back 34

Front 35

Terms and Conditions

Back 35

If proposal is for an existing client, then its likely that an existing Master
Agreement is in Place. The proposal letter just refers to the MA and notes any
Exceptions specific to the proposed work. In effect the proposal is for another
Statement of Work (“SOW”). Important Terms include:
Confidentiality
Termination
Intellectual Property Ownership (Rights to materials)
Limitations of Liability

If a MA does not exist or if the proposal is for a prospective client, then typically a standard
contract is submitted with the proposal. During subsequent negotiations, lawyers for
the firm and client deal with the contractual language while the consultant and the client
focus on the “business aspects” of the proposal

Front 36

Internal Consultants

Back 36

May or may not use proposals and “arrangement letters” however typically is a best practice to do so. In either case the process and documents are less formal than for 3rd party independent consultants.

Generally would not include qualifications statement and fees unless chargeback model used in which case an estimate of costs would be appropriate