A number of my clients have been asking me how you sell to a corporation where you do not have the opportunity to meet the "real" client executive who is going to use your service or product, but have to "sell" though a consultant who has been hired to run the client's buying process. They say they want to use the principles in my article The Trusted Advisor approach in their selling, but don't see how you do that if there is a gatekeeper. (They describe this to me a tryng to make love through a blanket!)
There's probably been a lot of research on this topic about which I am not aware, but I'm fascinated with how much this approach to buying has grown and spread. It happens in corporate purchases of:
- Advertising
- Public relations
- Asset management
- Outsourcing
- Large management consulting projects
- Law firm selection and monitoring
- and many other services.
My curiosity is aroused in trying to explain why this is expanding so much. Why don't corporate officers select and choose their own outside providers? Why do they need the consultants to advise them?
I can see why you would need an advisor if you were a one-time buyer, buying only periodically, or buying something particularly big. Then, you would want to tap into the specialists' expertise and greater knowledge of what's out there, and who's good. It would save you search time. We've all used people to perform that role for us at one time or another.
But what if you buy the product or service all the time? What if it's your JOB? If you are, say, the investment officer for a state pension fund, wouldn't it be your job to know who's out there? Or if you're a marketing manager who's been in place for 5 or 6 years, shouldn't you know who the possible agencies are and what their reputation is?
My guess is that these buyers DO know, and are employing "consultants to the process" to achieve other goals. If we are to successfully "penetrate" this layer between ultimate client and vendor, then we must understand what the buyer is hoping to achieve by putting it in place.
There are a number of possible purposes, including:
By using third-party consultants, buyers can make the buying process appear more formal and detached, and give the appearance to their corporate masters (or Wall street Observers) that they are being diligent and responsible in their buying. They are buying affirmation, reassurance and cloud-cover against attacks that they were "soft" or relied too much on things like "relationships."
Putting the third party in place allows all sorts of buying games including "Good Cop / Bad Cop" (Client/consultant) The hired-gun gatekeeper plays tough guy, while the client (who has to work with the service provider afterwards) can remain above the negotiating fray and preserve the bases for a good working relationship.
Some consultants could offer a lot more than just a "gatekeeper" function. The client may have only an unfocused understanding of his or her own needs, and what the consultant is doing is providing a "strategic navigator" service, so that the client can understand which outside service (a pill, a nurse, a brain surgeon) he or she really needs to buy. By separating the diagnosis from the execution, the client benefits by not having biased people (the vendors) always selling what they have, rather than what the client needs.
I have some additional thoughts, but let me find out if this is a topic of interest to anybody out there. The questions for you (all) are:
Are there other reasons companies hire consultants to advise them on their buying?
How well do the vendors understand the real reasons?
What are the implications for the DIFFERENT rationales for how a vendor should respond. Does the vendor do different things if the client is using consultants for different purposes?
8 comments:
Hi Richard
The consultant is in effect a client as well -- right?
Clearly the consultant is a source of work from this client and others.
So, seeing them as such and serving them (eg. being helpful for free) helps a lot.
(Actually, in my business, I am often "the consultant" in the above scenario -- I work with top tier law firms in many countries on behalf of clients).
I can tell you that when I'm choosing a firm to instruct or recommend for a client, I am fully aware of the last time we worked together.
Several of my larger cilents leave the choice of firm completely to me -- the simple reason is that they are just too busy.
Cheers
Duncan
Richard, P3 provides agency selection services to many advertisers in Australia and New Zealand.
The main drivers for marketers to use our services are:
1. Advertising and media is often only a small part of the total marketing mix and so they require advice from a SME (Subject Matter Expert)
2. The marketing communications space is becoming increasingly fragmented and complex and so difficult to stay abreast of the changes and implications
3. The increasing involvement of procurement in the marcomms space, often without the required understanding of the process or requirements.
When managing a selection process, we place an emphasis on the relationship and chemistry as an essential component of the process and so create and manage opportunities for the advertiser and agencies to "get to know each other".
I guess removing the blanket but providing a chaperone.
I love your extension of the metaphor!
Can I ask where you get the expertise you provide to your clients?
Are you ex-agency people?
Do you have formal scanning to collect data on agencies?
Are you experts in the process of purchasing?
How do you ensure that what you do adds value?
I ask this not to be rude (for a change) but as a sincere desire to understnd which of these sources of value your clients really put most of a premium on.
Very interesting post.
As the outsourced marketing department of some firms, we find ourselves in the role you describe pretty regularly.
Most of the time our situation is your option "c" -- that is to say the execution part is not something the firms usually have the time nor desire to manage.
Wherever it's helpful to the process for the vendor to meet and collaborate with our mutual client we, like Darren, are chaperones, in addition to arranging the date.
Ofter, our clients want us to use vendors we are already comfortable with and trust -- it's more effective and often more economical for them that way.
To your Q#1, another possible reason not specifically named but perhaps part of is when a company's employee or department doesn't want the blame if a bad vendor selection is made.
Being detached from that process can be a CYA move.
I don't think our clients use us as a buffer in this way, but it is possible, isn't it?
To your Q#2, we are always clear about who is making what decisions in the buying.
Sometimes we do the leg work and the customer decides, sometimes not.
I'd say that if it isn't clear who is in what role, the vendor should ask.
If the answer seems odd or the process secretive, I'm not sure I'd want any part of it.
After all, in order to effectively articulate the value of your product or service, you've got to know who is buying, why (the full scope of need), what the decision criteria is, and what the relationship will be throughout the project -- who is managing it.
Which brings us to Q#3: absolutely, as per the prior sentence.
The sales process looks/ feels different and the project process and management will be different.
The vendor/ consultant relationship may end up having more of a subcontractor feel where the accountability ultimately falls on the consultant.
Or it may be a side-by-side collaboration which can be tricky but the vendor may be able to establish its own relationship with the client.
Either way, chemistry is key.
A situation in which the consultant/ buyer makes the decision but is not involved in the project is most difficult because the "trust in sale" relationship is not there to support the process.
Much like when you are hired by an executive who later leaves the organisation.
If the consultant/ buyer is involved in creating the project outline and vendor criteria, and plays little or no part in the final decision or project itself, that can be the easiest because the consultant can give terrific insights -- probably more knowledgable about the project scope and purpose than the client -- about the ultimate needs of the customer.
I am experiencing this at the moment.
My wife is in the middle of launching a business and we are using a prime contractor (who we trust) to help find us subcontrcators (who we do not know about).
What makes it interesting is that our version is close to "prime contractor――subcontractor" whereas there are other situations where the "intermediary" focusses almost exclusively on the buying process -- (for example, consultants who advise pension funds which money mangers to invest their asssets with).
The range of "types" of roles is large.
Back in the 1990s, I authored an article on "Managing Facilitator Services".
I should try to dig it out and post it on this website.
You have to watch out for those third-party, trusted advisor types.
Wasn't Dick Cheney supposed to help select a VP for George W., only to take the job himself?
Richard,
Yes, we are all ex-agency people.
I am an ex-creative director at JWT in Australia.
We have online databases that the agencies complete with all the information (confidential and general such as clients and revenue) that we use in the selection process.
We also spend time with the various agencies and keep abreast of the industry activities through the media and through our other consulting activities.
We usually work with procurement or purchasing people within the advertisers organisation.
The way we present our services is in a menu format for the clients to select the services were they believe we provide the most value.
Most engage us initially to review the marketplace against their brief.
They usually do not have a brief, but our process is design to get the focus and details on their actual requirements.
The second most common request for services is in the negotiation and remuneration stage.
Beginning and end so to speak.
But often once engaged, many quickly find that having us on-board saves them time and provides the knowledge they need to select an agency more effectively.
In all seriousness, I think Michelle's answer was very thorough; however, I think there's a big difference between what Michelle's talking about and working with "procurement departments" for large corporations who are totally focused on cost.
I'd like to know from some of you fellow "Reader Wood's" out there how you work with these entities.
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