6

Selling in the New Marketplace

Launching Your Practice

Some people have the Field of Dreams mantra when they start consulting: “If I build it, they will come.” But the truth of the matter is that selling consulting services even for the best-in-class experts takes a continuous, focused effort. There are three main approaches to consider:

1. Personal direct sales.

2. Working through an intermediary or specialty consulting firm.

3. Working through a digital talent platform.

Direct Sales

Some people love to sell and others don’t. Some people love to sell products, but hate to sell themselves. As part of the research for this book, I did a survey of independent consultants that focused on how they run their practices. Fewer than 5 percent of respondents said they loved the selling part of running their business. Forty percent said they did it because they had to.

The key to being able to sell is believing in the product. If you really believe you can deliver results to clients, then sales will follow. For seasoned consultants, this is the most common way to get business.

The steps are the same as for any product: lead generation, cultivation, and qualification followed by an ask. Lead generation can be anything from sending out an email newsletter to networking at the professional association of your industry.

Cultivation can be through blog posts or thought leadership white papers. Thought leadership, by the way, was one of the favorite tasks consultants cited in my survey. Qualification is the crucial step of determining whether a potential project is not only real (i.e. has a budget and a degree of urgency), but is appropriate for your expertise. The ask is the all-important throwing of your hat into the ring and submitting a bid or proposal for the work. Resources abound to provide assistance in this area, from websites such as ConsultingSuccess.com to the industry association the Institute of Management Consulting.

When you sell directly to clients, you are in total control of your destiny; you choose the clients to target and the types of projects to pursue. As such, you are in control of the brand promise you defined for your practice.

Similarly, in collaboration with your client, you negotiate your own price, contractual provisions, and time frame. This presupposes you have the infrastructure to handle all of those things. Operating independently requires more organization and structure. You will need a basic contract, accounting system (or at least invoicing tool), and some level of administrative support (a topic we will cover in Chapter 8).

From the marketing standpoint, direct sales is the most time-consuming. Although many consultants begin their careers with a project in hand from a former employer or old friend, those who do not need to mine their contacts to generate leads, network whenever and wherever they can to cultivate relationships, and cleverly generate opportunities to sell work. Although social media tools such as LinkedIn help to facilitate the work of marketing through contacts, it still takes a concerted effort on your part. (As I mentioned in Chapter 4, social media is not a sales strategy.)

It may take many lunches, attendance at networking events, and/or speaking engagements before you secure good leads for your business. Let’s face it: many people don’t like networking, but a recent survey by Cerius Executives, an intermediary in Los Angeles, found that most senior consultants secured nearly 85 percent of their business through networking.¹ With those kinds of numbers, it is a step you can’t ignore and something you should think about strategically.

This investment in business development is a cost of doing business. That cost is not just the dollars expended in attending a conference, it is also the opportunity cost of your time; the time you spend marketing is time spent not generating income-producing work. Although all sales channels have unbillable time, direct sales may have the highest level, especially for rookie consultants. This is why many people, both veterans and rookies, turn to intermediaries to add more momentum to their own sales efforts.

Using Traditional Intermediaries

Intermediaries can provide you with opportunities you might not encounter on your own, but you take the risk that the projects may not be the optimal content for your skills. Similarly, the price point may not be at the rate you have set for your services and so may not be right for your economic situation. Nonetheless, it can be a solid sales strategy.

Specialty consulting firms, such as McKinley Marketing and the Business Talent Group, operate on the value proposition that deploying independent consulting expertise is a critical business strategy. They work with clients to help them understand ways they can tap this just-in-time marketplace for competitive advantage. The consultant’s benefit from the firm’s reputation as a problem-solver. These firms are not selling a consultant individually, but they are selling the fact that they can find the right expert to solve the problem. In essence, consultants working through these firms are leveraging the firm’s brand to help burnish their own.

When you work through a specialty firm, they will secure a project through their sales team and contact you if they think you are a fit for it. The project typically has a budget that the firm has negotiated with the client. That budget may or may not be in line with the pricing you have established for your business. You need to decide whether or not to put your hat in the ring for consideration.

There are several reasons why you should consider a lower fee when working through an intermediary:

• A project may afford the opportunity to add new skills to your repertoire. Perhaps you have been a digital marketing specialist with a domestic consumer brand, and a project comes up for a digital strategist for that same product category in key international markets. The ability to add the international skill to your own inventory of skills is worth a lower rate. (As I mentioned in Chapter 5, capital formation is worth the investment.)

• You had little or no sales expense associated with securing this project. As such, you should be willing to reduce the fee you might charge in your direct sales channel.

• It could be a company for whom you always wanted to work. Back in the day, M Squared did a great deal of work with Lucas Films and Lucas Digital. Several projects were out at Skywalker Ranch, which is approximately 45 minutes from San Francisco in the middle of nowhere (literally—directions to the ranch included the dirt road one used at a certain mile-age point to find the unmarked location). An inordinate number of consultants were willing to reduce fees and commute for these opportunities.

Most firms check references specific for a given engagement. To optimize your dealings with them, you should have such references organized. A marketing communications consultant with diverse clients, for example, should be able to easily offer references specific for a speech-writing gig versus an annual report project.

The intermediary firm typically handles the invoicing and collection of funds from the client. Similarly, the firm deals with the contracts and insurance requirements. Some will allow you to negotiate specific provisions in your contract; however, recognize that they have a contract with the buyer that mirrors the contract with you. As such, major deviations from the standard contract may not be negotiable on the client side. (We will discuss these issues more in Chapter 8.)

What many consultants like the most, though, is that these firms have sales forces. Their sales teams are out in the marketplace selling the idea of specialized expertise to clients. By doing this, they are potentially presenting you with projects from companies you don’t know, projects you would never have secured on your own. However, because they are selling solutions, they are not necessarily selling you. It could be that the projects they secure are not a fit for your expertise. The firms typically have a broad reach with a client, so are reluctant to turn away qualified consultants. So even though they accepted you into their network, it doesn’t mean they will secure you a gig.

To ensure the best fit with the intermediary world, you should be careful and deliberate in choosing the intermediaries for your practice. Some are appropriate only for those in certain functional areas, such as CFOs to Go; others may only assist consultants at a certain level of the organization, such as the Association of Interim Executives, which cultivates only the most senior interim management consultants. Many are only regional in focus, such as McKinley Marketing in Washington, D.C., whereas others may be offshoots of large human capital or staffing organizations.

This space can be confusing, as firms may identify themselves as specialty consulting firms, staffing companies, or high-end temporary agencies. The true intermediary recognizes that it has two clients: the customers who need expertise and the consultants who are seeking engagements. Because the firm acts as a marketing arm for those consultants it represents, it must have the commensurate level of sophistication and industry knowledge to sell the services of its network. You are the subject matter expert, so the intermediary need not have your level of expertise, but they need to be able to hold their own in your field. As you interact with each firm, assess its familiarity with your industry segment to see if they can adequately market you.

Here are some other points for you to consider:

• How core is professional level business to the firm? The value of the intermediary is its ability to bring senior-level engagements to you. If it’s merely an outgrowth of a traditional staffing firm, it may not have this expertise. Moreover, its support structures and sales incentives may not be geared to secure the types of assignments of interest to senior consultants.

• Has the intermediary had projects in the past for which you would have been a fit? The past can be a predictor of the future. If you are looking for senior-level compensation program design work, then make sure it has done those projects in the past.

• What is the organizational heritage of the firm? Most intermediaries have background in staffing, search, or consulting. Firms with roots in consulting or search often have a higher service orientation and may be more familiar with the decision processes of senior-level buyers.

• How does the firm define its services? Language can be a very telling indicator of positioning in the intermediary marketplace. High-end intermediaries focus on the solutions they delivered to client problems rather than the number of placements they have made. The following illustrates some terms that can be bellwether indicators of a firm’s leaning:

• What services does the firm provide to you? Service levels vary across the industry. Some firms make the match, set the prices, and negotiate the contract with little or no interaction with the consultant. Others have a more interactive process. Which would feel better to you?

• How good are they at solving client problems? Every firm has its own “secret sauce” that helps it make the right match of consultants for client projects. Some, such as M Squared, rely on a highly sophisticated project specification process that forces clients to distill key issues and desired outcomes. Some firms go beyond skill-set matching but also consider essential soft skills. Cerius Executives in Los Angeles includes a psychometric profiling process for all consultants it accepts in its networks. Client projects are similarly profiled in order to use predictive analytics to facilitate the best possible behavioral match.

• How sophisticated is their operating infrastructure? In most cases, you will be using the intermediary’s system to bill the client. How easy, comprehensive, and suitable is that? If you do SOW-based projects and bill by deliverables, can its system handle that? Does it have an app to make it easy for you to report your progress? If yes, is that something you care about and would use? Do they offer guidelines and support for expense reporting?

• How will you be compensated? We will cover employment issues in Chapter 7, but it is important to know whether you will be employed by the intermediary or the client, or working on your own and paid using a 1099. If you are being paid by the intermediary, it is important to understand its financial stability. By law, as an employee, you need to be paid within a 14-day window following completion of the pay cycle. The client may not pay for 30, 60, or even 90 days. As such, the intermediary must fund that receivable and pay you before payment is received.

• Are benefits of any sort available? The Affordable Care Act (ACA) has meant that many intermediaries need not offer health insurances. (The future of the ACA is now up in the air, a topic we will discuss in Chapter 10.) Several firms offer benefit opportunities for things that are difficult for an independent consultant to procure, such as long-term care insurance coverage. Some have paid time off plans prorated for the days worked by a consultant on an assignment. You should understand what would be available to you, were you to work with a particular firm and how important that is to you.

There are many great intermediary firms in the talent space. It is worth your while to find the one or ones who can best help you build your business.

Digital Talent Platforms

Digital talent platforms are a relatively new phenomenon, so it is difficult to get a sense of the volume of work that is actually being facilitated through this channel. This is especially true because most of the analytics that have been done have included the on-demand platforms of ride-sharing companies such as Uber and lower-skill providers such as TaskRabbit. A highly regarded study in the field done in 2015 by JP Morgan Chase showed very low levels of participation in the on-demand labor platforms of about .5 percent of American workers. Nonetheless, the study and several others concluded that these platforms are growing at a healthy clip, increasing ten-fold over a three-year period.² There are a plethora of platforms across a variety of skill sets, like consultants, drivers, designers, teachers and coaches. Appendix A provides a listing of many of these companies, as well as selected traditional intermediaries.

The JP Morgan Chase study also concluded that participants in on-demand labor platforms used them to supplement primary income streams. As such, it is worth considering these firms as a way to find work that might not come from the other channels, rather than as a sole source of clients.

Although they may seem similar, digital talent platforms operate differently from traditional intermediaries. The biggest difference is that you need to invest time and effort to secure gigs.

While writing this book, I applied to every platform for which I was seemingly qualified. I wanted to better understand the application process as well as the user experience. Appendix B provides a table of my experiences with some of the platforms I joined. My opinion is that an investment of time is required to make any of the platforms generate appropriate projects for you. This is due in part to their algorithmic operation. An algorithm may suggest you are good for project X, but it will not know for sure unless you are selected or in some cases, considered, for project X. In other words, the system cannot be smarter about what is right for you, unless it has more data about what projects you have applied for and the outcome of those applications.

Once you join, you need to work the platform, and you need to figure out what project might work for you. Most allow you to respond to a project posting with the reasons why you may be a good fit for it. Some even give you templates from your prior submissions, so you don’t have to keep generating unique responses to posted projects.

The pricing content of these responses differs across platforms as well. In some, you immediately provide a price at which you will do the work; in others, there is more of an iterative process, in which you interact with the buyer to get more details to facilitate the setting of an appropriate fee.

Because such an investment of time is needed to make it work, it is important to choose the right digital platform. Many of the questions you needed to consider about a traditional intermediary apply here as well.

• How core is professional level business to the firm? When you check out the platform, see where your brand of expertise fits in the array of services it offers. Although Upwork maintains it works with senior consultants, given that so much of its business is on lower-level programming and creative disciplines, I would not see them as a fruitful channel to secure serious consulting engagements in management disciplines.

• Has it filled gigs for which you would have been a fit? This can sometimes be difficult to ascertain. Some sites cater to a specific managerial discipline, such as SpareHire, which is focused primarily on financial expertise as well as quantitative marketing analysis. The majority, though, are more general. What you can do on most sites is browse their current opportunities. If some of those seem relevant or interesting to you, it might be worth the application time. Keep in mind that the most popular projects on these sites are ones that can largely be done remotely. As such, the majority of gigs listed are business plans, market or product studies, and research projects. If you are an organizational consultant, for example, your project opportunities may be fewer and further between. Similarly, operations and manufacturing gigs are not widely represented.

• How will it determine whether you have the right expertise? Groucho Marx once said he wouldn’t want to join a club that would take him as a member. Who are the other “members of the club” you are considering? Can anybody join, or is there some gatekeeper? Touting a network of 50,000 consultants is meaningless if many of them are lowlevel, unqualified, or potentially fictitious. Although a vetting process may seem to be an onerous burden, it can be a sign of a more exclusive club, and one that you may want to join. Here are some examples:

Hourly Nerd/Catalant—Must have an MBA from a “top” school.

GLG—Must take an online confidentiality course.

Experfy—Must have a Kaggle score of a certain number.

UpCounsel—Must be a lawyer in only certain specialties.

ExecRank—Must complete an onboarding session.

Perhaps the most rigorous vetting process may be TopTal, a platform which purports to have only the top 3 percent of the freelance talent in the disciplines of designers, software developers, and financial expertise. Its website (TopTal.com) explains how it gets to the top 3 percent, which as illustrated here:

• How does it make money? The platform world is still evolving, so there are multiple business models being developed. Like traditional intermediaries, platforms have two clients: the consultants and the companies. As such, how the platform makes money must suit both types of participants. Most platforms take a percentage of the project fee. Some subsidize one side of the platform with the other (i.e., they charge the consultants to increase revenues). ExecRank is a platform targeted at board-level advisors on one side, and startups and mezzanine-level firms on the other. The advisors pay a monthly fee to be included in the cadre of experts. I must admit, I pay more attention to this platform, because I am paying for it. That said, I have received more targeted and appropriate opportunities for my skill set from ExecRank than I have from any other platform.

• What services does the platform offer? Some platforms offer additional services to participants. Chief among these are training programs. Many of the Experfy participants, for example, are academics in the field, so they are more than able to provide online training content for the platform. Some, such as ExecRank, offer the opportunity to become certified in some way in particular fields. Many platforms offer access to helpful resources including tax planning guides or incorporation services. Some have blogging platforms to help you build your brand among their participants. Perhaps the most unique might be Tongal, which is a platform for independent creative artists to power content for brands on you tube and in advertising. For the last three years, they have hosted the Tongies, an Academy Awards-like gathering to showcase the best work in various creative categories, such as long-form video or animation, done by those on its platform.

It is important to remember that digital platforms have two sides: both clients and consultants are members. So unlike the specialty consulting firm intermediary, from which you may not know immediately who the client is, you typically have optics into that on a digital platform. That said, the platform companies that have created these marketplaces need to protect their investment, so they have significant contracts to outline the relationships of the parties.

Unlike the online contract you get when you update your mobile phone software without ever reading the agreement, it is important to actually print out and read the agreement of the digital platforms on which you choose to participate. You may even need to secure some legal advice on certain parts of it. Although I have not read every single platform contract, I have read many, and here are some common points:

1. Typically, you and the client sign the same document. In fact, in order to apply to most platforms, you agree to the contract, which is why some people won’t read it. (Don’t make that mistake!)

2. The platform disavows responsibility for making the match, because participants on both sides of the platform make it happen. Similarly, the platform takes no responsibility for whether a given consultant has the requisite skills he or she has represented that will enable successful completion of the engagement.

3. Most platforms forbid participants from contacting each other outside of the platform. Emails and phone numbers cannot be shared. When I built my website using a developer from Fiverr, we were conversing about issues on the platform, and David, my programmer in Morocco, suggested we do a Skype call. When I messaged back with the words “my Skype ID,” the screen immediately went red and let me know I may be in breach of contract. Suffice it to say, the platforms take the external contact restriction seriously. Given that my project did not go flawlessly and more direct communications would have been helpful, I was not a fan of this restriction.

4. Most put the onus for the decision as to whether a consultant is an employee or an independent contractor on the client. However, consultants should understand that many clients, especially startups and small and mid-sized companies, may not be equipped to make the right call on this issue. As such, it behooves you to understand the implications of the employment status decision. (We will discuss this more in Chapter 7.)

5. Payment practices are outlined. Most require invoicing to be through the platform, but some, such as SpareHire, are only now developing that capability. Most only take credit card payments from clients, although some are adjusting their models to accommodate other modes. Experfy, which works primarily with very large clients, does accept corporate purchase orders and corporate checks. In some cases, payment is made up-front when a gig commences and placed in escrow until the project is completed. If the work you do tends to be long term, you need to understand how the payment process will work and whether it meets your cash flow needs.

6. Dispute resolution processes are also described. If the client is not satisfied with the work, he or she may not accept the project, meaning the funds may never be released to you the consultant. In most cases, the consultant can issue a dispute if he or she feels payment is due. This happened to me with one of my ill-fated Fiverr gigs. Suffice it to say, it is very important that you understand how disputes, especially those involving finished work, are resolved.

7. Most contracts address intellectual property (IP) ownership. We will discuss this more in Chapter 8, but if you are in a field where you want to own the IP you build, platform contracts may or may not enable that. Another of my Fiverr developers, the one who fixed things, created a specialty SEO optimization manual for me, so that I could optimize my blog posts without his involvement. Technically, that manual would be considered “work for hire” and I would own the right to that manual. He copyrighted the material, which was just fine with me, as I would have offered him a free, perpetual license, to enable him to use the document with other clients.

Once you have identified the platforms that play to your strengths and you have read the contracts, you need to apply to a subset of them. As I said, a time investment is needed. However, so is diversification. Right now, especially in the consulting platform space, there are a number of competitors. It is almost reminiscent of 2001, when there were five Internet pet food delivery services; it was clear to everyone that they would not all survive. In fact, a recent article in Harvard Business Review suggested that the digital platforms are not disrupting traditional businesses so much as they are forcing out similar but less efficient competitors.³ To ensure you don’t put all your platform eggs in one proverbial basket, apply to two or three of the set you find most interesting.

Working the Digital Platforms

Although they all work somewhat differently, here are some guidelines about how to optimize your possibility for jobs in the platform world.

• Read everything on the site. Virtually all platforms have a blog, where at least some of the postings are targeted at the consultant side of the platform. There is bound to be a post about how best to work with the firm. Other typical content includes codes of conduct, reference guidelines, and employment status information. Take it all in and follow their guidelines.

• Join the extracurriculars. Some sites will have special networking groups of consultants from like industries. They may call them advisory networks or expert councils. Even if you don’t feel completely expert, join the group that best matches your expertise and work that as well. Read the posts, hear about the projects other members completed, and attend webcasts that support your expertise. Some platforms even make suggestions of other members with whom you should network. Another approach is a program recently launched by Catalant/Hourly Nerd called Project Ideas. With this tool, you can promote gigs that you could do for clients. Theoretically, the platform will then market those projects to its client community. The firm says clients often don’t know what the consultant network can do, so this new feature is intended to showcase it. It doesn’t hurt to try. That said, they have accepted my pitch for a training program about enhancing board governance, but as of yet, I have had no takers.

• Define your bidding strategy. When you bid, consider how a project fits with the brand you have defined for yourself. Also consider the practical dimensions:

• Is the pay sufficient?

• Do I have the time and can I meet a posted deadline?

• Would I want to work for this type of client?

• Are there any non-negotiables? (Non-negotiables are things that, because you are working for yourself, you just won’t do, such as fly on a Sunday night. It could also be industries you wouldn’t want to work in, such as porn or tobacco.)

• And then of course, the key question: Do I really have the right expertise and approach to meet the client’s needs? Do not accept a gig that is over your head, regardless of how cool it may be. As a consultant once said to me, “You are only as good as your last gig,” so don’t take one that will reflect badly on you.

• Develop a bidding plan and execute it. At some point, you just need to jump in, but do so methodically. Develop a schedule of browsing projects once a week or more and set a goal of how many projects you will consider. Again, this will be a more successful approach for those in market research or strategy, as these projects are more popular on the platforms. That said, a strategy consultant could set a goal of bidding on three projects per week. Most platforms provide information including how long the gig has been open and how many bids have been received. Because you will be doing this across the two or three platforms you have chosen to join, you can also track your yield from each platform. Compare the following:

• Your interview rate (# of interviews/# of bids).

• Your win rate (# of gigs secured/# of bids).

• The service level: Did I find out what happened with my bids (e.g., that it was filled by someone else), or did I remain in limbo, not knowing the ultimate disposition of the project or my proposal?

Comparing this data could help you determine whether a particular platform is the right channel to help you grow your business.

Chapter 6 Key Takeaways

• To launch your practice, you will need to pursue direct sales, which can be enhanced using a traditional intermediary and participating in digital platforms.

• There are many intermediaries, both traditional and digital, and you will need to screen them to understand which players are best to advance your practice.

• Traditional intermediaries sell consulting services and can secure projects for you that you might not get on your own.

• You will need to invest time to get a return from participating in digital platforms. Developing performance metrics may help you evaluate the best platform for you.

• Digital platforms may be best for marketing and strategy consultants who work off site on compartmentalized projects.