Marketing of Consulting Services

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Marketing of Consulting Services


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Abstract

This report describes the different marketing approaches used byconsultants to market their services. The Consulting Industry underwentsignificant changes in recent years. Mergers & Acquisitions took and takeplace, IT-Companies thrust themselves with own subsidiaries into the marketand more sophisticated clients expect new payment terms, to name someexamples. As a result marketing gains in importance for consultants.Therefore the particularities in marketing professional services areexplained. The typical matrix-structure of a firm and its implication formarketing are illustrated. There are various techniques used to marketadvisory services. These are grouped and defined in this study and, wherepossible, examples aredisplayed.

Main objective of this dissertation was to find out which are the preferredmarketing ways applied by consultants. Thus a survey was undertakenthroughout the consulting industry. A representative sample of the industry

was asked for the importance of different marketing approaches. To derivesome meaningful recommendations from the survey regarding the mostappropriate marketing techniques, respondents had to estimate the futureimportance ofchosen industry sectors and consulting services.

As it turned out it is not the primary goal to gain new clients with marketing.Intensifying existing client relationships has a similar importance. Somesignificant differences were identifiable. These can be partly attributed todifferent financial capabilities of the organisations. However, some favouredmarketing techniques are identifiable. Generally the more subtly indirecttechniques are preferred, whereas the direct techniques are seen as lessimportant. The opportunities and the importance of certain industry sectors

and consulting services are perceived differently by smaller consultanciesthan their bigger competitors. At the opposite of the major consultanciessmaller competitors tend to specialize and hence weigh the importance ofindustries and especially services considerably different. Nonetheless thereare industries identifiable, which gain in importance for consultants as wellas trends towards certain consulting services besidesOutsourcing.

This dissertation is presented in seven sections.

Section one gives background information and a brief description of thecurrent situation in the consulting industry. The second section deals withinternal structures within consultancies and important aspects in marketingprofessional services. In section three different approaches used by

consultancies to market their services are explained. Findings of the twoprevious sections are summarised in section four. A brief overview ofsampling methods and the chosen study design are explained in sectionfive. Results of the conducted survey and an approach to systemisemarketing decisions are discussed in section six. Finally some conclusionsand recommendations are made.

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1. Introduction

Consultancies have always been quite reluctant to market their services.

They normally assumed that their own success feeds their reputation and

generates permanent demand and therefore new clients. There are different

ways to market advisory services. In order to find out the most preferred

methods used by management consultants to market their services, this

dissertation was undertaken. In a second step it was analysed how

consultants rate the future importance and impact of chosen industry and

service sectors. According to these estimations recommendations regarding

a focussing of marketing efforts on certain industry sectors and consulting

services were deduced.

Marketing of ConsultingServices

Marketing methods used by Management Consultancies to

markettheirs services and position themselves in the market-

1.1. Background

As the International Financial Services, London reported in its latest

memorandum (IFSL, 2003, p.1), the recession has reached also the

consulting business. 2002 was the first year in the past decade, where the

management consulting market grew (in terms of revenues) only by single-

digit numbers. The same development was expected for the following years.

Before it has been one of the fastest growing industries in the UK.


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Marketing of Consulting Services- Introduction -

1.1.1. Recentyears

During the recent years the business faced significant changes. Corporate

scandals, like ENRON in the United States, brought professional service

firms under the spotlight. Accountancies have withdrawn from the consulting

business. Mergers and acquisitions took and take place. For instance IBM

took over the consulting business of PWC and more recently on this years

January 29th

AtosKPMG acquired SchlumbergerSema (Kennedy

Information, 2004a, p.5).

However, the UK consulting market is after the U.S. the second largest

single market for consulting services, with a stake of 11% of the total $119bn

market (IFSL, 2003, p.6). It corresponds to $13.1bn (7.35bn). An article in

the Management Consulting International January issue (Kennedy

Information, 2004b, p.1) predicted that the UK consultancy market is primed

for a return to modest growth in 2004. Expected is 4 6%. The Kennedy

Information, Inc. argues that the UK market, due to a slightly growth in the

last year will lead other Western European markets in recovery (2004c, p.2).


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Marketing of Consulting Services- Introduction -

1.1.2. Identifiable trends

A couple of major trends are identifiable:

Major IT-Companies set up their own consultancies or acquireestablished ones. Examples are, as mentioned before IBM, t-systems,

Oracle, Hewlett-Packard or SAP. The trend, of setting up consultancies,

so-called In-house-Consultancies, can also be seen in other industries,

e.g. logistics (DPWN Deutsche Post World Net) or manufacturing (VW -

Volkswagen).

There is a tendency to mergers of bigger consultancies to huge servicegroups on the one end of the market and to single or smaller consultants

on the other end of the market, which operate at lower costs and

therefore put pressure on fees. Projects are getting smaller, in value and size. Nowadays clients aremore cautious and price-conscious. Big players have now to compete

and position themselves against smaller competitors, which often worked

successfully as a niche-player on smallerprojects. Clients prevail new compensation schemes. Consultants have to acceptprolonged payment terms and to participate in risks as well as in profits. Akin to the past decades, innovative concepts are missing. In the 1970sthere was corporate strategy, in the 1980s total quality management,

business process re-engineering or ERP and in the 1990s Internet, E-

commerce and Y2K (Kennedy Information, 2004d, p.10).


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The financial sector lost ground. According to Abbott (2003, p.2) theproblem will be reduced when the whole economy has turned around.

Subsequently the financial sector will restart spending more on

consultancy. Revenues in this segment slumped by 19.8%, from 1.783

mill in 2001 to 1.430 mill in 2002.

Summarised can be assumed that because of the growing competition and

the lack of innovative drivers, marketing may gain in importance.


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Figure 1: Management Consultants Service & Industrysectors

Service sectors Industry sectors Outsourcing IT-Services Strategy Operations Human Resource Finance Programme management Marketing & Sales

Finance Government Communications & Media Retail & ConsumerGoods Healthcare & Pharmaceutical Utilities & Energy Manufacturing Transport

The questionnaires were sent in the months March and April. The

respondent quote was 42%. Analysis was undertaken by the means of

SPSS.


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POTENTIALENTRANTS New single orsmallconsultants Low barriers ofentry

SUPPLIERS POWER Clients seek forintegrated solutions

BUYERS POWER No switching costs Newcompensationsystems Make consultantspartlybear the risk

COMPETITIVERIVALRY Increasingbecauseofeconomicsituation,new

competitors and

continuous changes

SUBSTITUTES IT-&Technology-companies Inhouse-Consultancies


competitors and

continuous changes


Marketing of Consulting Services- The Consulting Services Industry -

2. The Consulting Services Industry

As mentioned in the introduction the consulting industry experienced

significant changes during the last a couple of years (see Figure 2).

Figure 2: Porters 5 Forces in the ConsultingIndustry


SUPPLIERS POWER Clients seek forintegrated solutions


Source: Kotler, P. (2000) M ar k e ting M a nag e m ent. The Millennium Edition, NewJersey: Prentice-Hall, p.218.

Together with the market for consulting services the number of consultants,

often single or small consultants, soared. According to Bythell (2004) the

number of consultants rocketed from 18.000 in 1980 to 555.000 in 2000.

Clients are looking for new payment methods and integrated solutions.

Consultants have to bearpart of the risk and changed payment terms (see

1.1.2.). This led on the one hand to collaborative alliances between

consultants and client-companies and on the other hand to the advent ofIT-

Jan-Daniel Laufhtte 8Student-No: 2304958


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Services firms, such as Hewlett, Fujitsu, Oracle, or SAP. The latter entered

the consulting industry by setting up own consulting subsidiaries or acquiring

established consultancies.

2.1. Management Consultants

The study at hand is focused on management consultants. On principle

consultancies can be subdivided into Information-Technology-Consultants

(IT), Management-Consultants and Human-Resource-Consultants (HR). By

and by it got harder to distinguish between those categories. Nowadays the

strategic aspect of implementing and operating IT-systems or personnel

development preponderates. The Management Consultancies Association

(MCA) defines management consultancy as follows:

Management consultancy is the creation of value for organisations,through the application of knowledge, techniques and assets, toimprove business performance. This is achieved through the rendering

ofobjective advice and / or the implementation of business solutions.(CitedinInternationalFinancial Services, 2003)

The stated definition illustrates that the distinction between IT-, HR-, and

Management-Consultants is blurred and all three types can therefore be

subsumed to Management Consultancies. Consequently In the following it

will notbe differentiated between the three identified types. For the reason of

completeness a brief definition of all three (see Figure 3) follows.


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Figure 3: Functional Orientations ofManagement-Consultants

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Support of companies in planning,development and implementation

of IT-systems and operating ofthose, too.

Support of companies in the areasof strategy, organization and

management on companiesexecutive level.

Support of companies inpersonnel acquisition, personnel

development, outplacement as wellas salary and contract design.

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Support of clients by environmentalanalysis, internal analysis

and choice of strategy.

Support of clients in the process offormal re-organisation of internal

structures, respectively re-divisionof functions between the client andits customers.

Make a client fit forfuture organisational changes.

Source: FINK, D. (2003) D ie gro ss en M anag e m e nt C on s ultants . Verlag Vahlen,Mnchen, p. 7-12.

Information-Technology-Consultants support their clients mainly in applying,

using and operating IT-systems. Human-Resource-Consultants advice their

client firms in personnel acquisition, development and linked areas.

Traditional Management-Consultants are primarily focused on strategy and

management. Management-Consultants services can be subsumed into the

three arrays Strategy-, Organisational- and Change-Consulting.


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2.2. First steps

Kotler et al (1999, p.7) define marketing as the delivery of customer

satisfaction at a profit. The main tasks of marketing are attracting new

customers by providing superior value, and keeping current customers by

developing satisfaction. In terms of a consultancy it means, that a firm can

only exist and grow, when it keeps it current clients by satisfying theirs

expectations, and adding value to theirs businesses. In turn the success with

one customer attracts new clients, who create new advisory demand.

Demand for consulting services occurs, when the client company lacks the

required expertise, or its own specialist works full-time on other projects and

hence lacks the time to advise. Furthermore the company may be too close

to or involved in a problem and needs an objective advice from someone

outside the organization. Finally a firm facing several options may need

recommendations how to react on external trends.

Although consultants are sometimes reluctant to market theirs services,

even one of their pioneers, James McKinsey, knew how important marketing

was and still is. He spent a lot of time on business dinners where he subtly

explained his prospective clients of what worth his services could be for

them. Whereas in past times consultancies marketing consisted mainly of

networking, carrying out small surveys, speaking on management

conventions and trusting their strong reputation it is nowadays generally

accepted that professional services asconsulting have to be marketed more

actively. Reasons are the steadily increasing competition, where it is


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indispensable to position the firm and its services in the right market to get in

touch with the right clients.

2.3. The Advisory Process

Doyle (2002, pp.357) says that manufacturing companies are usually

organized along functional lines. Hence decisions are made department by

department, whereas each department has got the possibility to develop its

own specialist skills, organization and culture appropriate to the tasks that it

faces. Problems emerge by integrating these separate organizations. A

service organization in contrast has to be designed as a whole with all

members signing responsibility, to a certain extent, for marketing. Therefore

the marketing of consulting services cannot be reduced on certain points

within the consultancies value chain. Even though a consultancy created

awareness and prospective clients interest in its services, not only its

appearance and proposal must be convincing, since a successful executed

case is a powerful marketing tool. The advisory process of a consultant can

generally be divided into 7 parts, as illustrates Figure 4.

Figure 4: The AdvisoryProcess

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Due to the fact that marketing of a consultancy is an overall task, thus it

cannot be limited to first two steps of the advisory process. Awareness

summarizes that phase, where consultants may create awareness by using

several marketing approaches. Potential clients, who discover a specific

need for consulting in theircompany, will then contact the consultancy in the

so-called lead-phase.

2.4. Principles for Marketing of Consulting Services

Consultancies have to consider that they are working in a highly confidential

business environment and hence to bear in mind certain rules. Kubr (2002,

p.649) developed 7 principles for marketing consulting services:

1. Regard the clients needs and requirements as the focal point ofall

marketing!

2. Remember that every client is unique!

3. Dont misrepresentyourself!

4. Dontoversell!

5. Refrain from denigrating otherconsultants!

6. Never forget that you are marketing a professionalservice!7. Aim at an equally high professional performance in marketing and

in execution!

Marketing has to be focused on clients needs. Every case must be relevant

and of any value for the client and not simply for selling a service. Clients

expect a unique customized solution and not a standardized product. In

marketing its services a consultancy must not give a wrong impression about

its capabilities and competences. Otherwise clients expect more than the

consultant is able to deliver. Denouncing competitors is unprofessional.


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INDUSTRY

PRACTISES

Clients sensitivity, local cultural values and norms must be taken into

account. Therefore the appropriate marketing approaches and techniques

have to be used. Marketing continues and does not end when the service is

once sold. To execute the case properly has a pivotal marketing effect, since

a successful solved case increases the firms reputation and may gain new

clients.

2.5. Organizational structures within consultancies

The major consultancies are matrix-organized. On the one hand there are

the functional practices, which correspond to the usual business functions

and on the other hand industry practices, which represent the different

industries a consultancy is working in (see Figure 5).

FUNCTIONALPRACTISES

ConsumerGoodsConsumerGoods

ManufacturingManufacturing

AutomotiveAutomotive

PharmaPharma

TelecomTelecom

UtilitiesUtilities

etc.etc.

StrategyStrategy

MarketingMarketing

OrganisationOrganisation

OperationsOperations etc.etc.

Specialist

IndustryConsultant

FunctionalConsultant

Generalist


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Consultants of the industry practices are the sales-force for ideas and

concepts developed by their colleagues of the functional practices.

Therefore it is expected that the functional consultants invest time of their

billability in the benefit of research & development. Billability is the

percentage of her or his work time a consultant is available for cases.

Normally the billability should be around 75%. Initially, when the consulting

service was established as a business discipline, most consultants were

generalist and applied their skills to the given cases. By the time more and

more specialised know-how was required most firms reorganised into a

matrix-structure and hired specialist for the different areas. The consultants

reacted to the more complex business environment, in which often a deeper

knowledge was indispensable.

That a deeper knowledge whether industrial or functional is important stated

Hans-Paul Brkner, CEO of the Boston Consulting Group, in an interview

with the Consulting Magazine (2004):

There needs to be a number of senior people who really understand

the issues and who can provide different industry points and who cancombine different functional expertise that no single person orboutique couldpossibly bring to bear. (cited in The Last ElectedCEO

A Talk With Accentures ApproachableLeader)


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2.5.1 The origin of the matrix-structure

The matrix-organization resulted from the restructuring-efforts at McKinsey &

Company in the aftermath of oil crisis and the economic downturn in the

1970s, when the firm faced more focused new competitors like the Boston

Consulting Group (BCG). At this time McKinseys consultants were seen as

excellent generalist problem solvers. But they often lacked the deep industry

knowledge or the substantive specialised expertise that clients were

demanding (Bartlett, 1999, p.3). In contrast to McKinseys client-

relationship-approach with long-standing client-relations, BCG started

competing form its Boston-base with its fly-in-fly-out-model. BCG made use

of some simple but powerful tools, as the experience curve or the growth-

share-matrix, and progressed quickly (Fink, 2003, pp.85). To counter BCG

the matrix-structure was against resistances in the firm set up and

Research & Development were more emphasized. A series of publications

was started, which culminated in some bestsellers as In Search of

Excellence or The mind of the strategist and the The Knowledge Resource

Directory (KRD) in which all the firms worldwide specialists are registered.


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2.5.2. Consequences of the matrix-structure

As a consequence of the matrix-structure four varying types of consultants

can beidentified: The traditional Generalist, the prototype a consultant, who serves allbusiness functions over all industry sectors. A Functional Consultant, who is specialized in one business function,e.g. Marketing and offers her / his services to all industries. An Industry Consultant, who is focused on a single industry sector, butprovides all functions forthis.

The Specialist, who offers her / his services, i.e. marketing, only withinone industry.Also a generalists manpower may consist of specialists along the traditional

value chain or of different industries. For bigger projects / cases, where

specific know-how is needful these specialists are recruited out of the

companies network to work together.


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to retain and gain clients -

3. Marketing Approaches to retain and gain clients

The intangibility of consulting services affects the possibilities of marketing.

Contrary to products services do not have a fancy package for the client to

see, touch, hear, or smell. It cannot be sold like automobiles or deodorants

(Greiner & Metzger, 1983, p.42). A consultancy sells promises no

guarantees. Prospective clients can hardly detect, if the offered services are

of any use for them. Nowadays clients are also more cautious. Kubr (2002,

p.650) argues, that clients wish to reduce their risk by finding out whether

the consultants abilities match the technical and human dimension. The

technical dimension defines the technical know-how needed to solve a

clients problem. The human dimension on the other hand describes which

soft-skills are required in dealing with the client. Thus, the consultancies

marketing efforts have to convince its client that it is able to cope with the

given situation.

3.1. Service marketing mix

Traditionally to attract new customers was often overemphasized. A well-

managed firm will work hard to retain and grow its existing customers

(Lovelock, 1996, p.150). It is said that it costs five to six times more to attract

a new customer than to keep an existing one. Marketing activities should be

focused to a larger extent on existing clients claims.


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gain clients -

3.1.1. Product

A consulting firms productive capacity is its human resources. Therefore not

only productivity in terms of billability is important, but also upholding the

firms most creative and productive employees interest and involvement is

crucial. The service marketing mix has to take into account both goals, thus

the consultancy has to provide an adequate product mix for its clients

(external customers) and employees (internal customers), as well.

Figure 6: Product Mix for a Professional Service Firm

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Source: LOVELOCK, C.H. (1996) S er v ic es M a rk e t ing . 3rd

edition, New Jersey:Prentice Hall, p.188.

Figure 6 illustrates of which projects a professional firms product mix should

consist. Beside so-called Bread & Butter projects the organisation has to

conduct some challenging Pacesetter projects, to keep its best personnel


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interested and to foster, if successful, its own reputation.


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The consultancies industry practices market their services within the

industries they are representing and working in (see 2.5.). While a specialist

can fully focus its marketing efforts on a certain service for a certain industry,

a generalists marketing has to cover all his services for all industries. Since

consulting services are intangible they are often difficult to understand and

their worth for the clients company cannot be examined in advance (Doyle,

2002, p.335). To generate confidence, tangible aspects should be

emphasized. In case of a consultancy the office should look innovative and

prosperous, forinstance.

3.1.2.Price

The price is highly dependent on the case-size. It is obvious that a small

case involves fewer consultants and needs lesser time than a case for a

global company undertaken in several countries during a longer space of

time. Also the involved consultants are different paid. Evidently a director

gets a higher salary than a junior consultant and creates therefore more

costs for the client. But on the other hand the client may insist to be advised

by executive consultants. It can be assumed, that consultancies are well

informed about the price structure within the market. When a consultancy

prepares a proposal it is aware of the competitors pricing strategy. As a

result prices do not differ significantly, as long as all consultants offer the

same service. However, due to the advent of single and small consultants,

fees got under pressure during recent years. Only if a consultancy is in a

unique market-position, it may have the opportunity to charge a higherfee.


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Nowadays exists also the opportunity that consultancies take over clients

businesses. Deutsche Bank for instant outsourced its data processing

service centre in Heidelberg (Germany), which is now managed by CSC

(Computer Science Corporation). Both, Deutsche Bank and CSC share a

profit equally. Bain& Company used a similar method to determine its fees.

Bill Bain was the opinion that only measurable results counted. Hence his

consultants developed the so-called Bain-Index, which reflects the share-

development after engagement of Bain & Company. Bain offered his

customers to link the consulting fees directly to the share value added or

other parameters. (FINK, 2003, p.128)

3.1.3. Communication

Promotion illustrates the different given possibilities to create clients

awareness for the offered managing consulting services. Due to the fact,

that services are sometimes difficult to understand and their worth is

unpredictable, they are more complicated to advertise, promote and

communicate than products. Because of their experiential nature, word of

mouth is generally more powerful than advertising. Consequently, service

firms seek to encourage customers to tell their friend and business partners

about the good performance they receive (DOYLE, 2002, p.335). Networking

and Referrals are highly important, especially in the consulting industry.


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3.1.4. Distribution

A high-involvement service as consulting has to be distributed directly

because consultant and client have to meet each other. Generally, before a

case is stipulated several meetings take place in which discrepancies are

clarified. Mostconsultancies pursue a multi-service strategy. The firm seeks

to grow by capitalizing on its reputation and knowledge of its customers to

sell new services. The company maintains the simplicity of a single site and

customer base, but adds to the operational complexity of the business with

its growing range of new services (DOYLE, 2002, p.356). Also for

distribution a wide network is useful fora consultant. So the firms reputation

and consequently its services can be spread more easily.


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Brand Name TCS

Category IT Services

Sector IT and Technology

Tagline/Slogans Experience Certainty

USP India's largest IT company

STP

Segment Enterprises seeking IT solutions

Target GroupLarge overseas enterprises along with domestic clients. Focus onemerging markets as well.

PositioningTrustworthy company with big customers

SWOT

Strength

1) High command on local and domestic market(India)

2) Strong brand backing (TATA)

3) Strong Ethics

Weakness 1) Not very strong in product segment

Opportunity 1) emerging markets

Threats

1) Attrition and Employee loyalty

2) Bigger MNC's entering India and competing for global clients

3) Focussing on organic growth

Competition

Competitors

1) Infosys2) Wipro

3) Mahindra Satyam


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Accenture

Parent Company Accenture

Category Consulting, IT, Technology

Sector General Management

Tagline/ Slogan High performance delivered

USP

They are application oriented firm and worlds largest consultancy by

revenue

STP

Segment Large companies looking for consulting

Target Group Fortune 500 companies and other big organizations

Positioning Management consultants

SWOT Analysis

Strength

1. They provide technological solutions

2. They have extensive geographic reach in over 120 countries

3. They are the firm with largest revenue in the world in consultancy

sector

4. They use the same procedures and processes in approaching

projects, making it easy for employees to move from location to

location without retraining

5. Good advertising and brand building through TVCs and print ads

6. Strong employee base of nearly 250,000

Weakness

1. Accenture has been trying to break into serving small to mid-size

companies but faces stiff competition.

2. Stiif competition from across the world means slow market share

growth

Opportunity 1. They will benefit from its standing as one of the leading IT


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companies as the technology is constantly evolving

2. Due to the recession businesses are going to be looking for ways to

cut back and streamline their operations. Thus Accenture stands a

great chance as it is expert in outsourcing.

3. Global penetrations and offering special fees for smaller projects

Threats 1. Premium offering may not resonate with midmarket customers

Competition

Competitors

1. IBM

2. Capgemini


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SUPPLIERS POWER Clients seek forintegrated solutions BUYERS POWER No switching costs Newcompensationsystems Make consultantspartlybear the risk


competitors and

continuous changes


COMPETITIVERIVALRY Increasingbecauseofeconomicsituation,newcompetitors and

continuous changes


2. The Consulting Services Industry

As mentioned in the introduction the consulting industry experienced

significant changes during the last a couple of years (see Figure 2).

Figure 2: Porters 5 Forces in the ConsultingIndustry


SUPPLIERS POWER Clients seek forintegrated solutionsSUBSTITUTES IT-&Technology-

companies Inhouse-Consultancies


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Customer Relationship MarketingAnother supporting aspect is relationship marketing. Especially McKinsey

& Company is well known for placing its former consultants in leading

positions in private companies, where they provide the firm with useful

information or hire McKinsey for cases, due to the still existing contact

(see 3.2.1.). At the board of the Deutsche Post AG, 5 out of 8 members

are McKinsey alumni ( h ttp :/ /w w w.d p w n .d e), and all over Germany there

are round about 300 McKinsey alumni in executive positions (McKinsey

& Co werden 75, Berliner Zeitung, 2001). A survey throughout

consultancies revealed that consultants obtain revenues predominantly

with existing clients. Interactive Marketing is an important key word. It is

understand as the sum of cultivation and usage of personal networks,

recommendations ofbusiness partners and colleagues and the personal

relationship with the consultant (Grass, 2002, p.5)
http://www.dpwn.de/http://www.dpwn.de/http://www.dpwn.de/http://www.dpwn.de/


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3.3.2. Events / Sponsorships / Seminars & Workshops

Sometimes advisory companies sponsor sophisticated events or organise

seminars and workshops to promote theirservices. SponsorshipsIf consultants sponsor an event, it is normally an outstanding one. For

instance Arthur D. Little sponsors the World Economic Forum, the World

Sports Forum, the IMDLearning Network and the EBSEuropean

Business School as a strategic partner. Booz Allen Hamilton sponsors

the Booz Allen Classic at Avenel, an annual golf tournament. Sponsoring

such a sophisticated event mirrors on the one hand how consultants

want to be perceived elitist and on the other hand addresses one

specific target group. Those chief executives, who are fond of golf, and

decide about hiring consultancies. SeminarsSeminars and workshops can be conducted by the consultancy itself or

in collaboration with partners, e.g. associations, scientific institutions or

chambers of commerce. To guarantee an appropriate participation

normally no fees are charged. Speakers are usually consultants of the

hosting firm or externals closely linked to the consultancy, who present

the firms services and underline its excellence by references and case

studies.


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WorkshopsWorkshops are more useful for discussions about current business

themes. Here the participants are actively involved and give the

consultants often unconsciously details about own consulting

demand. DinnerseminarsDinner seminars or fireplace conversations are a common means to

intensify existing clients relations. Client partners are invited for a dinner

or a discussion in a sophisticated ambience. Marvin Bower carried on

James McKinseys approach and began in this way upgrading the size

and quality of McKinseys clients.


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3.3.3. Memberships /Directories

Being member in a consultancies association is a sign of seriousness and

quality, since those associations have usually certain rules and codes of

behaviour. Even better is to get into (potential) clients associations.

Because clients are unlikely to select a consultant straight without checking

and completing information on him or her, it may be wise to be listed in

directories. A directory normally also indicate, in addition to the consultants

name and address, areas of competence and a description provided by the

consultant concerned (Kubr, 2002, p.541). Examples for consultant

directories are FEACO (Federation Europeene des Associations de Conseils

en Organisation), IMC (Institute of Management Consultants

ww w . im c . c o . u k) in the UK, or the BDU (Bundesverband Deutscher

Unternehmensberater e.V. w w w.b d u . d e).

3.3.4. Presentations

Consultants can act as guest speakers at a target groups convention and

present themselves in this way in front of a number of potential clients. Even

though no cases result of these efforts the attendance list may be used for

further marketing steps and at least the contacts list can be enlarged. To get

the opportunity to present the consultancy should keep the contact with the

organizer of the congress orconvention.
http://www.imc.co.uk/http://www.imc.co.uk/http://www.bdu.de/http://www.bdu.de/http://www.imc.co.uk/http://www.imc.co.uk/http://www.bdu.de/


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Marketing of Consulting Services- Marketing Approaches to retain and gain clients -

But the consultancy has also to bear in mind, that there are also some risks

in presenting itself in front of an expert audience. In over-emphasising the

own problem-solving skills the consultant could be perceived as a wiseacre

orknow-it-all and ruin his chances to get any case. Hence something new,

better known to the consultant than to the audience should be introduced.

3.3.5. Self-Analysis

Some consultancies developed checklists. Companies get them for a low fee

and can carry out a self-analysis about their strengths and weaknesses. The

completed forms are sent back to the consultancy for an analysis. The

consultancies gatheruseful information about the prospective clients and on

which criteria they may focus theirmarketing efforts. Probably they get even

more information than during a proposal.

3.3.6. Medias

Lambert (1998, p.148) says that there is no promotion so effective or

satisfactory as free ink. It should be the principal objective of the consultants

being presented as an acknowledged expert in his service field in the

Medias (Huler, 1998, p.174). Great publicity creates press conferences

and public appearances together with a key client, especially when the

consultant is lauded explicit. Booz Allen Hamilton pursues an interesting

approach. Whenever the firm or one of its peers is mentioned in the media

the media release is tracked and recorded. In doing so BAH measures the

effectiveness to spread messages and findings. Additionally trends can be



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identified quickly and marketing efforts can be focused (Kennedy

Information, 2004c, p.12).

Another method to gain interest is the companys website, where required

information, contact details or booklets can be ordered by the potential

clients (see Figure 7).

Figure 7: Mercer ManagementConsulting

Source: Mercer Management Consulting website. Available at< htt p :/ /w w w .m er c e rm c . co m> (accessed 22 February 2004)
http://www.mercermc.com/http://www.mercermc.com/http://www.mercermc.com/


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3.3.7. Brochures /Booklets

At the opposite to cold contacts (see 3.2.) brochures provide more general

information about the organization and are not focused on a specific

customer problem. At the major consultancies the prospect sometimes has

to subscribe into the data-base with his position and company name for

ordering a brochure and gives the consultant in doing so already important

information.

3.3.8. Corporate Identity /Reputation

While the consultants themselves can determine the corporate identity, their

reputation is highly influenced by the clients perception and satisfaction. Corporate IdentityThere are many different ways to emphasise the firms corporate identity.

It includes such methods as offices in exclusive locations, engagement in

social clubs or hiring staff at the leading business schools. The War for

Talents was once led so fiercely that the dean of the Harvard Business

School prohibited the recruiters of Bain & Company, McKinsey &

Company, etc. to enter the campus. Recruitment is an important point,

since the clients expect the best and the latest from the leading

business schools. Hence it is quite commonto hire the juniorconsultants

directly from there.



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Another possibility to create corporate identity is to emphasize on

uniformity, in order to stress reliability and security. Marvin Bower, the

long standing McKinsey & Company CEO, determined in his Guiding

Principles every single step of the advisory process. Starting with a

worldwide common presentation style and ending with the dress code,

with straw-hat in thesummer, Bowler-hat in the winter and long socks the

whole year (McKinsey & Co werden 75, Berliner Zeitung, 2001).

Discretion was the first maxim atBain & Company and according to this

its consultants acted. They did noteven

have business cards, wherefore

they got the nickname KGB (Fink, 2003, p.200). ReputationReputation is the key success factor in the consulting business (see

3.3.1. Referrals). Wilson (1998, p.129) states, that reputation is the most

valuable asset a consultant has. So valuable that it has to be nurtured

and protected as much as possible. Because it is very hard to earn, but

can be easily lost by one bad project. The impact of reputation is

illustrated by the following threeexamples.

When Accenture (accent + future) split itself of from its parental firm

Andersen Worldwide it tried to transfer some of Andersens reputation to

the new set up brand. Accenture managed to establish itself successfully

and increased its reputation as Management and IT-Consultant. In the

following it loosened its linkage to Andersen, so the ENRON-scandal, in

which Andersen Worldwide was involved, did not affect the firm.


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For Marvin Bower reputation was equivalent to revenue growth. With

growing status and reputation, revenues would grow anyway, he

assumed (Fink, 2003, p.84).

Another good example is Arthur D. Little (ADL). ADL got a high

reputation by developing and innovating scientific processes as

converting salt water into fresh water, pioneering in pollution control and

environmental protection, or secure disposal of hazardous waste. Even

though ADLs position as No.1 deteriorated during the 1980s, because

rivals like McKinsey & Company and the Boston Consulting Group were

adopting sophisticated marketing strategies supported by publications

and simple models, ADL is still perceived is an innovator.


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3.3.9.Advertising

Advertising is only a viable option for bigger advisory firms. But it is still not

seen as suitable by some consultants. The problem with advertising is that it

requires high expenditures and its long-term effect is debatable, but it may

support a firms positioning endeavour. Wilson (1998, p.129) criticises, that

advertising campaigns are usually a sign of no imagination and an

avoidance of getting out and selling services.

However, Andersen Consulting with its 1990 advertising campaign changed

the general opinion within the business. The firm launched a series of high

profile, highly visible publicity campaigns, covering the whole array, from

television to boarding. The campaigns message was clear and simple:

metamorphosis in a world of change (Czerniawska, 1999, p.70).

Andersen Consulting, respectively then Accenture launched another

campaign, when split itself from Andersen Worldwide. Investing US$175

million to promote and advertise the new name, with print advertising (65%

of its budget), television advertising (25%), and Web and billboard

advertising (10%) (Greenemeier, 2000). ADL launched in 1995 a major

advertising campaign to reposition itself and provide a clearer image for its

customers (March, 1996, p.15) and Bearing Point developed recently an

advertising campaign, too. It is advantageous that a large number of

potential clients can be reached at once, provided that the firm knows which

journals and magazines its potential clients tend to read. Print ads are much

more common than radio or television advertising. Accentures latest


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advertising campaign features Tiger Woods, the world best golf star, who is

used as synonym for Accentures high performance (see Figure 8).

Figure 8: Accenture advertising campaign motive

Source: Accenture (2003) G o o n . B e a T iger . Available at< htt p :/ /w w w . a cc en t ure.co m> (accessed 1 March 2004)
http://www.accenture.com/http://www.accenture.com/http://www.accenture.com/http://www.accenture.com/


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Figure 20: Demand- & Life-Cycle

Diffusion

Rate

Consulting-Demand

Retail & Consumer Goods

2.00 / 396.6 mill

Government

2.48 / 925 mill

Finance

2.63 / 1430 mill

Life-Cycle

Healthcare &Pharmaceutical

1.93 / 161.9 mill

Utilities & Energy

1.96 / 424 mill

Transportation

1.96 / 164.1 mill

Communication & Media

1.81 / 500.9 mill

Manufacturing

1.67 / 218.5 mill

Demand-Cycle

Thematisation Expansion Dominance De-Thematisation

6.4.1. Criticallyevaluation

The introduced model represents an attempt to gather recommendations on

the basis of which data consultancies could focus their marketing activities

on certain sectors. Problem in using this model may occur due to the fact

that the scale for the X-axis is inappropriate. Here the overall-revenues for

the largest sector were used as a means to determine a limitation to the

market size. But even though the market growth slowed down it is not

predictable if there is any saturation of demand. Additionally the vast

majority of respondents ticked, apart from forFinance and Government, in

the middle of the given scale or did not even give estimation.


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7. Conclusions & Recommendations

This study identified two main categories in which consultants marketing

techniques can be grouped. Firstly there are direct approaches, which do

have an immanent acquisition intention, and secondly indirect approaches,

which are subtler. The latter were given a higher importance by the

questioned consultancies. Success of the direct approaches is doubtful.

They also may provoke refusal and nullify any chance to get a case or even

an order to submit a proposal. Hence generally indirect approaches are

more commonly used. But it has to taken into account that the sampled

consultancies represent the top of the market and therefore can afford to use

more sophisticated techniques. Nonetheless it can be concluded that indirect

techniques have higher prospects ofsuccess.

7.1. Conclusions - Why market consultants their services

There are two main reasons for consultancies to market their services, on

the one hand to gain new clients and on the other hand to intensify the

existing client relationships. Only a minority does marketing primary to reach

prospective clients. By the majority the respondents market their services to

both, existing and potential clients. This is underlined by the fact that the

major part of revenues is made within established customer relationships

(Grass, 2003, p.6). Due to the fact that the consulting business underwent a

slight crisis the firms are now willing to market their services more actively.

Especially the major consultancies valued the future importance of



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Marketing of Consulting Services- Conclusions & Recommendations -

marketing as very important. It mirrors the fierce competition, in which they

have to compete with smaller competitors for smaller projects. That is why

they seek to focus their marketing efforts on intensifying current clients

relationships. In this way they try to secure their existing businesses and

gather new cases through theirnetworks.

7.1.3. Future ConsultingServices

The requested consultants expect further demand for Outsourcing advice.

But also Programme Management is a future field of activity. The latter

expresses the tendency to more collaborative relations between consultants

and clients (see 1.1.2.). Again the smaller consultants rank these two service

areas above all others. It can be concluded that especially in the Finance

sector there is a demand for these services and the smaller consultants see

the opportunity for specialization and reallocation their resources towards

these service arrays. Bigger consultancies see opportunities for the more

traditional services, e.g. Strategy and Operations. Also IT-Services are

seen as important. This result may mirror the fact that many IT-companies

entered the consulting business in recent years. In similarity to the previous

estimation of industry sectors future importance major consultants gave on

average higher values to the several services. This fact illustrates that most

of thema matrix-organized and act as generalists (see 2.5. and 7.1.1.). On

the contrary their smaller competitors tend to act as niche-players.


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Marketing of Consulting Services- Conclusions & Recommendations -

It can be summarized that there will be more Outsourcing and Programme

Management services offered, preferably by smaller consultants. The

major consultants will focus on traditional services, such as Strategy,

Operations and Finance. But also Human Resource services may gain in

importance. The big IT-/Management-Consultants will supply IT-solutions.

Due to their market size, there is hardly the possibility for others to make

ground.


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