Q. What is the most effective procedure for getting referrals?
A. There is no one most effective procedure for getting referrals in the consulting business. I have read numerous articles describing what the authors call "foolproof" methods. I have tried them all and found them to be nonsense - that is, publication space-fillers. They are time consuming, expensive, foolish, and ineffective.
Within each field, the consulting process performed by the expert is a science. The business of successfully conducting a consulting practice, however, is an art. Arts are not captured in formulas.
The best way to gain referrals is to practice your consulting science in the most dedicated way so that your clients' projects are successful as a result of your efforts. Succeeding on the client's behalf almost invariably makes him or her speak highly of you and recommend you to others whenever possible. Always be aware, however, that no matter how hard you try, your satisfied client will never recommend you to his competitor. This is because your client fears the competitor's success at his own expense and because, no matter how ethical you are, your client fears a lack of confidentiality on your part.
Do your best at all times, and good results will follow. This is simplistic but true.
Q. I am about to raise the rates for my consulting services. I'd like to get the highest fees I can without losing my clientele. Never having raised my rates before, I feel uncomfortable asking for more money. Nonetheless, my services are presently underpriced and not sufficiently profitable. Please advise the best way to increase fees and still maintain good client relations.
A. Do not raise your rates arbitrarily across the board. Ease into an increase by notifying the clients whose projects you are currently working on that you are raising your rates for all new clients. Ask these old clients not to quote your current rates to any referrals. Then quote your new rates to the new clients. This makes your current clients feel that you are grateful and loyal and that they are now getting a bargain. Later, when these old clients return with new projects, they will be prepared for your new rates.
Q. I am having difficulty collecting my fees for the services I perform. Other consultants in my field and in my geographic area tell me they are having the same problem. How can I rectify this?
A. Whenever a situation like yours occurs, it is time to change your methods of billing. Hourly or daily work will now require payment in advance. Monthly retainers, too, must now be paid in advance. Long-term, fixed-fee projects must be broken down to monthly payments- again, in advance. When a client questions you about this strict procedure, do not give the true reason-that is, that you've had trouble with your collections. The client will automatically falsely believe that your nonpaying clients were dissatisfied with your performance. State your terms matter of factly, as though this practice is standard in your profession. You may lose a few assignments as a result, but this will be far less expensive than what you are now experiencing. Rampant client nonpayment gives you a bad reputation, ruins you financially, makes for ill feelings between you and your client base, and prevents referrals.
Q. Am I permitted to list the names of my current and former clients in my advertising brochure?
A. Yes, you are. However, you are not permitted to describe what it is you do (or did) for those clients without their express written permission; this would make you liable for breach of confidentiality. To market your consultancy, you need credibility. Your credibility comes from your list of satisfied clients. Most clients are pleased to assist their consultants by: (a) allowing their names to be used, (b) providing testimonial letters of recommendation, and (c) giving written permission for news releases that announce you're being retained by them (an excellent source of publicity for your marketing effort). Where written permissions are required, though, be certain you get them.
Q. As a consultant to multiplant industries, I suspect that often the client uses my advice to improve production in other locations without paying me additionally for this. Is there something I could or should do about this?
A. There is nothing you can or should do. Consultants are paid for their expertise and time. Both are sold to the client in blocks. When clients can take advantage of the purchase of these blocks to enhance other areas of their operations, that's all to their good. Nor is there anything you can do to prevent this from happening in the future. You may only charge additionally when clients request that you spend additional time in an auxiliary plant or division and when clients agree to pay you for that additional time.
Q. My field of expertise is retailing, and I have been a practicing retailing consultant for four years. One of the many areas in which I am proficient and in which I have gained a considerable body of knowledge is shop-lifting-a major concern of every retailer. In the past four months, over 90 percent of my revenue has been earned by helping clients catch shoplifters. Indeed, my reputation for that kind of expertise has grown to the point where I am constantly asked to make speeches and write articles on the subject. Needless to say, most of my referrals come from that kind of exposure.
I am so busy thinking up new methods of ensuring retailing security that I have no time to devote to the research required to hone my other retailing skills: advertising, location, staff training, inventory control, etc. I feel that I am losing my grip and sliding into the role of security consultant. What to do?
A. You are not alone. What you describe happens to at least 50 percent of successful consultants. All people in business eventually learn that it is the marketplace that dictates which products or services are most needed. It is the client world whose needs must be met, not yours, if you are to be financially successful. Scientists have found themselves as CEOs of corporations marketing biological products, management consultants have wound up as specialists in personnel turnover, psychologists have become successful outplacement consultants, some consultants lucratively devote all of their time as expert witnesses, others spend all of their expensive time assessing losses for insurance companies - and the list goes on.
It is necessary to "go with the flow," as long as you are good at and enjoy what you are doing. And don't be surprised if that same retailing world someday decides it wants to pay you even more to do something else. You are obviously a Renaissance man in your field. Specialization is the key to today's success in every profession. Consulting is no exception.
