Roger Parker
As a professional researcher and consultant, one of my jobs for clients is tracking where their business and brand equity are coming from. Based on the results, clients can build on the areas that are effective in generating business and dial down those with lower impact.
In a strange irony, like the builder whose house renovations never end, I’d only paid cursory attention to this type of analysis for my own business.
I’d glance at what brought business to me, make assumptions about what was working–without any hard analysis–and continue doing what I thought should work.
When the recession hit in 2008, I got some unwelcome spare time. New business slowed by 75% and my existing clients cut their budgets. Suddenly, after operating comfortably since 2001, it looked as if the tap was turning off and I would have very little work.
Then, I took a dose of my own medicine. I went back through every transaction of new and existing business and analyzed how and why I got it. Some came from the company website, some from referrals, and some from product sales.
What stood out was that, while those three sources accounted for most of the work that came in, almost 70% of my effort and cost for new business generation was devoted to other areas.
For example, I’d had a long term, monthly series in the country’s largest business newspaper. I’d run ads, written for other prestigious publications, published white papers, been a finalist in a national award, ran an executive program at the top University in the country, and even appeared on television. None of these marketing efforts generated an iota of work.
Painful though it was, the recession turned out to be a good thing for my business. It forced me to do the hard analytics about what worked and didn’t for both winning business and winning good business. As a result, I shifted how I did my marketing, and how I allocated my time and resources for projects.
Rather than focus on the full range of marketing programs, some of which were expensive and time consuming, I focused on the mechanisms that got results for me: referrals, the internet, and product sales.
For example, in late 2008, I instigated a catch-up with each of my clients. We discussed their challenges, how our projects had gone, and how we might work together.
I found that clients used these meetings to suggest what projects they’d like to do in the coming year and what budgets would be set aside. This was a quantum shift. Previously, I’d just responded to client requests for help as they came in. This was pre-booking.
At the start of 2009, I had more pre-booked work than ever before. By the start of 2010, it went up again. And by 2011, I had 100% of the work I needed to survive for the year booked in January.
My referrals from existing clients also went up. In the first half of 2009, I recovered my losses from the recession of 2008, and in 2010, had my second best year ever financially.
The reason I wrote this article is that I know how hard it is to be a consultant, and how you can fall into a self-defeating pattern. You start with a burst of energy and ideas when the consultancy begins, then over time you start to rely on intuition, accepted wisdom, and others’ ideas about what works.
You end up surviving nicely but not growing as well as you could, and then you become vulnerable if there’s an event like the great recession.
One of the very best things you can do is step back and examine your own business. To use the old consultant’s phrase, “hold up the mirror” to yourself. Take an objective, detailed look at the source for each piece of business that has come your way, and how much revenue and profit each generated. Then re-think how you can magnify what works. You just may find, as I did, you get pleasantly surprising results.
Roger Parker founded and runs New Zealand research-consultancy, New River Ltd.
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