Thursday, July 19, 2012

It’s a Matter of Policy (part 2/2)

In the first article in this series I described some of the business rules or policies I’ve adopted for my consulting and training company, Process Impact, over the years. That article presented several policies I have regarding traveling. In this concluding article I share some additional policies regarding finances and client relations. I’ve mentioned some of these in earlier posts so I won’t elaborate on them in detail here.

On Finances

One of the first things I learned about consulting was to Set my price so I’m happy whether the client says yes or no. I’ll ask a higher fee if I’m not that interested in doing the job (like teaching the same two-day class for the 182nd time—literally!) or if the travel required is excessive or inconvenient. I’ll ask less if the destination is someplace I want to go anyway, if the opportunity sounds like a novel consulting engagement, or if it's a class I don't get to teach very often. Most of the time that high price scares the client away, If not, then I’ll grin and bear it and cash the check. One consultant I know was invited to travel from the east coast of the United States to Japan to deliver a half-day presentation. Not wanting to spend that much time traveling for such a short gig, he requested an outrageous fee and first-class airfare. The client agreed; off he went.

I also Quote an all-up fee that includes my expenses. This way I don’t have to provide receipts (potentially subject to client frowning and debate) for travel and lodging expenses, books, printing handouts, and the like. This policy has greatly simplified my invoicing. It also permits me to Request payment at the time of the event with a new client because I can submit the invoice in advance. I adopted that practice after having countless invoices get lost in clients’ accounting systems. This reduces my aggravation level and saves me the time of chasing down late payments. I also do not let clients get away with their occasional attempts to give themselves a discount for payment within 10 days. My terms are net 30 days (45 days for some clients), with no discount for early payment.

Another consulting colleague insists that New overseas clients must pay half the fee in advance. This is a good idea in case you have any concerns at all about whether you’re going to get paid, in what currency, in what form, and when. A Canadian friend recently told me that he suffered a significant loss because of changing currency exchange rates thanks to an American client company that waited months to pay him.

I’ve had a few problems with overseas customers who ordered products from my website but never paid the invoice. This small percentage of rip-off artists forced me to adopt the policy that Customers outside the United States must pay for products in advance. When the money comes in, the product goes out.

Just this past week I had an experience that caused me to contemplate a new business policy. I recently delivered a webinar at the invitation of a small company that sells certain software development tools. My invoice wasn’t paid on time. That’s not terribly unusual, but when I followed up I learned that the company had just closed and gone into receivership. I am never going to get paid. So now I need to consider whether to ask small companies with potentially shaky finances to pay me in advance for any work I perform for them.

Early in my consulting career I was invited to speak at a meeting of a local professional society. The contact person asked me what my fee would be. Not having encountered this situation before I wasn’t sure what to request. After I thought about it, though, I concluded that I Do not charge a speaking fee to give a presentation at a local professional organization. Delivering such presentations is a way for me to contribute to my profession as well as being a marketing and networking opportunity. Conversely, I Do not provide services to a company for free. If I’m delivering value to a company’s employees through a presentation or consulting, I’m entitled to be compensated for that value.

On Client Relations

Professional and personal integrity being important to me, I will Never misrepresent the work I’m performing for a client. A prospective client once asked me to state in my consulting agreement that I would be providing certain services. In actuality, though, he wanted me to do something different. He asked me to lie because he didn’t think his management would approve funding for the service he really wanted me to perform. I said thanks but no thanks. I don’t want to work for a company under false pretenses.

A client who hires a consultant for the first time is taking a risk. What if the consultant doesn't have as much experience as he claims and doesn't provide good advice? What if he's not a good presenter and the students don't find the class interesting or useful? I once brought a well-known consultant and speaker in to a company where I worked to teach a one-day class. She was very entertaining but provided little useful content, stimulated no class discussion, incorporated not a single exercise or practice activity in the class, and provided us with no reference materials to take away. The class evaluations were mediocre; we never brought her back in. To help my clients reach a comfort level with hiring me, I always Provide a money-back guarantee. My goal is for every client to feel that they would happily work with me again. Fortunately, no client has ever asked for a refund, but I'm fully prepared to reduce the fee if they don't feel they got their money's worth.

Periodically I receive e-mails or phone calls from people who have read one of my books or heard a presentation and want some advice about their situation. I’m always happy to Answer the first question for free. Sometimes this reply leads to an ongoing dialogue, but of course it’s not feasible to provide unlimited free consulting to everyone who writes to me. Therefore, if the person who contacted me has more questions, I will offer an off-site consulting agreement so that we can continue the discussion at my usual hourly consulting rate. Most of the time that terminates the discussion. Occasionally, though, it has led to an interesting short-term consulting engagement. (As an aside, I do always try to provide a substantive response to the initial question, so I’m frankly surprised at how seldom the questioners even say thank you. That seems rather rude.)

Once in a while a fellow software consultant will point a prospective client in my direction. I’m always grateful for these opportunities, but years ago I decided that I Neither pay or accept referral or finder’s fees for these kinds of connections. I figure that it averages out over time, because I am also happy to pass along such referrals myself. This is because of my policy that I Don’t take on engagements for which I am not a good fit. If someone can do a better job for the client than I can for a particular service, that’s who the client should hire. This policy notwithstanding, I do engage in business relationships with various companies to resell my products, teach my courses under license, or sell their products through an affiliate program. That’s a different kind of deal for which revenue-sharing is appropriate.

So there you have some of the policies that I’ve adopted during my fifteen years as a consultant and trainer. What are your own business rules? Please share any policies that you have found to work for you by posting comments on this article.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)

Thursday, July 12, 2012

It’s a Matter of Policy (part 1/2)

Every organization operates according to a set of business rules, whether explicitly documented or merely integrated into the culture’s oral tradition. You should adopt a set of business rules, or policies, for your consulting practice, too. In this two-part series I will share some of the operating policies and principles I’ve accumulated for my one-person consulting and training company, Process Impact. These might or might not apply to your business, but I encourage you to consciously formulate your own analogous policies.

On Traveling

One characteristic of consulting and training is that you usually have to go where the work is. This isn’t always true, thanks to virtual consulting and webinar technology. Most of the time, though, you can expect to have to travel to client sites. Early in my consulting career I had no idea how much work I was going to get, so I happily accepted every opportunity that came along. I was fortunate to get traction with the business quickly. The result was that I was doing a LOT of traveling. Before long, I adopted the policy that I Don’t travel during more than three weeks out of each month. This doesn’t mean that I was gone three-quarters of the time, just that I might travel one or more days during three out of every four weeks. It’s important to set time aside at home to get caught up, maintain relationships with friends and family, develop new training material, write articles and books, and even relax and enjoy yourself. This policy also has helped keep me healthy. I know two consultants who became ill and couldn’t fully recover for several months because their travel commitments were so exhausting. The only thing worse than traveling a lot is traveling while you’re sick. So leave time for yourself.

Along that same line, I find it very tiring to teach more than two days in a row. It’s hard to be witty and charming, both on your feet and on your toes for seven or eight hours day after day. Therefore, if a client asks me to teach two sessions of a two-day class, I Take Wednesday off between a pair of two-day training sessions. I might do some sightseeing, visit friends in the area, or take in a movie. My voice, my feet, and my disposition all benefit from the refreshing break. Of course, I don’t charge the client for my expenses or time on the day off.

Anyone who travels a lot has had the joy of being stranded overnight (or longer) in an airport or a nearby hotel. It happens, whether due to bad weather, mechanical problems, missed connections, or terrorist acts. I was stuck at a client site far from home for several days after 9/11. Another consultant friend was trapped in Rochester, New York, for more than two days because of just one canceled flight, because there was simply no space on numerous later flights to accommodate the affected passengers. I don't worry much about such delays on my way home, but it can be disastrous on your journey to a gig. Therefore, I Never take the last flight of the day to a client site. I'd rather arrive several hours early than to miss the engagement because I'm in an airport hotel a thousand miles away.

I’ve done some international travel, going to Europe a couple of times and taking several trips to Australia and New Zealand. This led me to my next traveling policy: Only fly across an ocean in business class or better. Yes, it’s expensive, and no, you don’t get there any faster. But it certainly is a lot more comfortable. I arrive at my distant destination better rested and ready to work. I build the fees for the business class airfare into the price quotes that I provide to my overseas clients. If they are unwilling to pay the cost, that’s no problem—I just thank them for their inquiry and stay home.

I have a consultant friend who thrives on international travel. He and his wife are real outdoorsy people who love to rough it and explore exotic locations. They really suck the marrow out of life. (I tried to suck the marrow out of life once, but I chipped a tooth on the bone.) Ken has decided to Spend one extra day sightseeing for each time zone change. So if Ken goes to China or India, he takes along his wife and they spend several extra days touring, hiking, camping, or whatever. This is not a bad way to see the world if you can afford the time and cost.

You know all those little bars of soaps that hotels give you? I don’t let them go to waste. Instead I Collect hotel soaps and shampoos and donate them to a homeless shelter. I know some people think it’s unethical to “steal” soap you didn’t use. I view the soap as part of what I’m paying for the hotel room, so it bothers me not one whit to take it with me. Over the years I’ve given hundreds of little bars of soap and bottles of shampoo to people who need them more than I do.

Some years ago I figured out an interesting traveling trick: I learned how to Leverage frequent flier programs against each other. At the time I had second-tier premium frequent flyer status on just one airline. I wrote to a second airline that flew on some of the same routes and invited them to match my premium status on the first airline. They didn’t bump me up two frequent-flier levels, but they did bump me up one. “Hmmm,” I said to myself, “that was easy.” The next year I tried it again—it worked again. Then I mailed a copy of my new premium card on Airline #2 to Airline #3 and made them the same offer. Again, they took my bait.

I was able to pull this scheme off for several years, parlaying premium status on one airline into others and enjoying the ensuing benefits. It cost me nothing more than a few letters and stamps. There was nothing underhanded about this—I was simply presenting each airline with a business offer. One year, I actually held premium frequent flyer status on four airlines without having earned any of them. The scheme didn’t always work, and lately I don’t have premium status on any airline because I don’t fly very much anymore. It certainly was nice while it lasted, though. Let me know if this works for you.

What are your own policies regarding business travel? Please share them with comments on this post. In part two of this series I’ll share some additional Process Impact policies regarding finances and client relations.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)

Friday, July 6, 2012

Selling Your Proposal When You’re Not in the Room (contributed by Michael Boyette)

Michael Boyette is the executive editor of the Rapid Learning Institute’s Selling Essentials elearning site and editor of the Top Sales Dog Blog. He’s also managed marketing and PR programs for DuPont, Tyco Electronics, and US Healthcare. Contact Michael via email at

Just about anyone who has worked as an independent consultant knows how it feels when your contact says, “We’ll discuss your proposal and let you know what we decide.” After all your hard work and preparation, you’re locked out of the meeting that matters most. What if people have questions that only you can answer? What if your contact misunderstands what you proposed? What if he or she wilts at the first objection, more worried about staying on the boss’s good side than getting business for you?

For example, let’s suppose you’ve been working with Jennifer, the VP of marketing, on a proposal to enhance the company’s website. Jennifer has assured you repeatedly that she’s the sole decision maker. But now she lets you know—for the first time—that she has to take your proposal before her management team for review and approval.

Of course, you’ll want to see if you can attend (perhaps by phone or Skype) to answer any questions the management team may have. But don’t be surprised if Jennifer says it wouldn’t be appropriate for you to attend. At that point, your best strategy is to make sure that Jennifer has (1) the desire and (2) the ability to be a strong advocate for you and your proposal. If either element is missing, you’re not likely to win. So begin by finding out what Jennifer really thinks of your proposal. Don’t succumb to wishful thinking. If Jennifer is anything less than 100% committed, you need to know why and address her doubts before she walks into that meeting.

Once you’re sure Jennifer’s on board, ask her to walk you through the decision-making process so that you and she together can identify and address any potential obstacles or objections. You might say, “Jennifer, I completely understand why the team will want to have this discussion without me there. So I’d like your help to be sure everyone has the information they’ll need to make a good decision.”

Ask whether any members of the management team usually look for specific information before they reach a decision. Go through each member of the team one by one. For example, Jennifer may tell you that decisions are often delayed because the Chief Financial Officer (CFO) needs time to review the numbers. If so, offer to provide your budgets, projections, and other financial information in advance of the meeting so that the CFO can prepare. Or let’s say Jennifer tells you that the Chief Operating Officer (COO) is likely to have concerns about the amount of time your proposal would take to implement and how it will affect ongoing operations. If that’s the case, you may want to suggest that you, Jennifer, and the COO have a call before the meeting to discuss those specific concerns.

Next, analyze the decision-making process point by point. What are the hot buttons? Where are the land mines? What are potential showstoppers? Here are some questions you can ask during your analysis of the buying decision:
  • Which team members have the most influence over the outcome?
  • What is each step in the decision-making process?
  • What are some likely reasons the decision might be delayed?
  • What questions or objections often come up in these discussions?
  • When the team has said no to a proposal like this in the past, what derailed it?
  • When the team has said yes, what made it happen?
  • Who tends to dominate discussions?
  • How will the decision be arrived at: majority vote, consensus, or some other mechanism? Does any individual have veto authority?
  • What happens next? Will the CEO want to review the decision, or is it final?
  • Is price likely to come up at the beginning or end of the discussion? How big a factor will it be?
Your goal is to do everything you can to help Jennifer act as your advocate in her meeting. Granted, that’s a nontraditional role for your buyer. But if she seems uncomfortable doing it for you, it probably means you have to back up and make sure she really is as committed to your proposal as she said.

Working through this process with your prospect won’t always guarantee a sale, of course. The meeting may still go the wrong way, often for reasons that have little to do with you or your proposal. But by following these suggestions, you’ll have done everything you can to anticipate objections and influence the outcome—even though you’re not in the meeting itself.

(If you found this article helpful, please consider making a donation to the Norm Kerth Benefit Fund to help a consultant who has been disabled since 1999 with a traumatic brain injury from a car accident. You can read Norm's story or donate here. Thanks!)