{"id":4891,"date":"2015-06-05T09:36:15","date_gmt":"2015-06-05T13:36:15","guid":{"rendered":"https:\/\/www.bullhorn.com\/eu\/?p=4891"},"modified":"2019-03-01T21:27:50","modified_gmt":"2019-03-01T21:27:50","slug":"selling-business-consulting-services","status":"publish","type":"post","link":"https:\/\/www.bullhorn.com\/eu\/blog\/selling-business-consulting-services\/","title":{"rendered":"3 Things You Need to Know about How Buyers Buy Consulting Services"},"content":{"rendered":"

By Ago Cluytens<\/p>\n

A lot of my clients are management consulting firms \u2013 meaning I get a lot of questions around how buyers buy consulting services. As a former Big-4 management consultant myself, and someone who\u2019s signed off or influenced a sizable number of professional services deals, I often see a marked difference between how most sellers believe<\/em> decisions are being made \u2013 and how they are made in practice.<\/p>\n

In particular, there are three things that most consulting services providers overlook when they reflect upon how buyers buy \u2013 all three of which have a real impact on how their performance in day-to-day sales.<\/p>\n

Buyers don\u2019t just buy services \u2013 they buy you.<\/strong><\/p>\n

From personal experience, I know that buying consulting services is somewhat equivalent to buying a raffle ticket \u2013 you never quite know what you\u2019re going to get. I certainly have a few horror stories to tell about scopes blown way out of proportion, deadlines missed by months and large systems integration projects ground to a sudden halt by vendors who couldn’t keep their promises.<\/p>\n

When you\u2019re buying a service, you\u2019re essentially buying an intangible: a promise of a certain result based on – at best – past outcomes, a track record and a reasonable sounding story.<\/p>\n

Which means that in today\u2019s marketplace, buyers are continually looking for ways to accurately assess, and diminish, the amount of risk involved in a buying decision. And most sellers vastly underestimate just important the notion of risk is to potential buyers.<\/p>\n

RAIN Group\u2019s research on Insight Selling<\/strong><\/a> has shown that sellers who win the deal \u201cminimize the perception of risk by demonstrating experience, building trust, and inspiring confidence.\u201d<\/em> And out of the 7 factors that showed up as important in minimizing risk in the eyes of the buyer, fully 5 are directly related to how the (individual) seller was professional, trustworthy, inspired confidence, depicted the purchasing process accurately and helped the client avoid potential pitfalls.<\/p>\n

In short, buyers don\u2019t just buy your services \u2013 they buy you.<\/em><\/p>\n

Buyers always buy for two reasons: the one they tell you, and the real one.<\/strong><\/p>\n

As a buyer, I\u2019ve personally been a part of several professional services bids in the 1-2 million EUR range. The kind of purchases that invariably involve shortlists, scoring grids, RFQs, RFPs, a closely managed bidding process, multiple stakeholders in a buying committee, and a great deal of involvement by procurement.<\/p>\n

Which were all great for two reasons: narrowing down the field of potential options, and having a good story to tell in terms of why we chose one vendor over another.<\/p>\n

But make no mistake: the ultimate decision was never made based on a scoring grid, or so-called \u201cobjective criteria\u201d. Instead, it was made for highly subjective reasons that buyers would never say out loud \u2013 but were conveyed in hushed tones in conference and meeting rooms across the organization. In public, of course, it was all about the \u201cobjective assessment criteria\u201d and \u201cthe superior value demonstrated by the leading vendor\u201d.<\/p>\n

Most sellers vastly underestimate the amount of \u201cshadow diplomacy\u201d that goes in making a buying decision. Forging alliances and building coalitions, eliminating or including certain parties in the decision making process and turning certain factors up or down in an effort to sway a decision one way or another \u2013 that\u2019s how the real decisions are made.<\/p>\n

If you\u2019re working hard on an \u201caccurate response to the RFP\u201d whilst your competitor has been out building alliances internally, meeting with key players and understanding (or influencing) the buying criteria \u2013 you\u2019re late to the party.<\/p>\n

Sellers \u2013 virtually always overestimate the importance of cost<\/strong><\/p>\n

Cost. It\u2019s the perfect excuse.<\/p>\n

Ask sellers why they lose deals, and they answer? \u201cCost.\u201d Ask buyers what they say when they need to deliver bad news? \u201cCost.\u201d It\u2019s the perfect excuse, a nice, polite and non-threatening way of giving the message: I don\u2019t really want to work with you.<\/p>\n

One of my clients did a large-scale project where they looked at the true loss reasons over a 24-month period. Before doing a deeper dive, the #1 factor that was entered into their CRM system under \u201creason lost\u201d was cost. After speaking with hundreds of clients, doing in-depth interviews and after-the-fact loss analysis, they discovered that cost was the ultimate reason for losing in \u2026 7% of all cases.<\/p>\n

Hinge Marketing did an interesting study on \u201chow buyers buy management consulting services,\u201d<\/strong><\/a> in which they concluded \u201csellers grossly overestimate the importance of cost as a primary selection criterion.\u201d <\/em>Where 53% of sellers believe cost is a primary selection criterion, only 28% of buyers reported it actually was \u2013 meaning twice as many sellers see cost as a driving factor versus buyers.<\/p>\n

Next time you are wondering how buyers buy consulting services, keep the following in mind:<\/p>\n