By Tom "Bald Dog" Varjan
What do you know about statues of famous soldiers on horsebacks?
When those horses have both front legs in the air, their riders died in battles.
When the horses have one front leg in the air, their riders died of injuries received in battles.
When the horses have all four legs on the ground, their riders died of natural causes.
It also means that bigger horses didn't mean that they carried greater heroes.
How does this relate to boutique IT service firms' marketing?
Well, the more marketing traps firms have fallen into, the more desperate their marketing people are to sit on those horses that have both front legs in the air, communicating a clear message...
"We're screwed beyond hope and redemption, but it's neither our fault nor our responsibility. It's someone else who's done it to us."
And from then on, the firm either survives or, well, ends up as a footnote in IT history.
There are several marketing traps boutique IT firms can fall into and then quite often can't set themselves free. They end up vegetating in that trap, blaming the government, the Chimneysweepers Union or either of the two most notorious mass murderer Vlads in history: Vlad Lenin or Vlad the Impaler.
In this article, we look at eight marketing traps, so you can better recognise them and if you have fallen into some of them, then you have a better chance to climb out.
Let's start with...
No doubt, your buyers come to you to solve technical problems, but if you stop at a technical level, you become an easily-replaceable budget-priced tech vendor not a respected premium-priced IT authority who uses IT to improve your clients' businesses through technology.
Make sure the technology that you offer to your clients is just a means to the end, a.k.a. a more profitable business.
There are two major philosophies IT firms swear by in their operations...
#1 is all about using better technology for the sake of using better technology. It means you gently nudge your clients to subordinate their businesses to the latest and greatest technology. You don't care about the collateral damage, but the new technology must be rammed down your clients' throats no matter what other parts of your clients' businesses you may wreck along the way.
#2 is all about optimising technology to your clients' business requirements a few years ahead. A brand-new moving company with 10 people doesn't need the Salesforce-Pardot combo (~ $2,500/per month/per user) to manage sales and marketing, or an overly complicated and unnecessarily expensive backup system. You can get all that once your clients are making good money and can justify it.
And the more concern you show for your clients' bottom lines, and I don't mean the contour of their arses, the more you stand out of the IT crowd that usually only cares about the technology it sells.
One interesting phenomenon I've observed over the years is that many - especially huge, one-stop-shop type - IT service firms turn themselves into factories of one-size-fits-all, off-the-shelf solutions. They develop processes and try to shove those processes down their clients' throats.
For a moment, CSI: Miami (Season 5, episode 12: Internal Affairs) comes to mind...
Detective Jake Berkeley: "How'd you find that?"
Lieutenant Horatio Caine: "I followed the evidence, Jake."
Berkeley: "So did I."
Caine: "Yes, but in your case, you allowed the evidence to fit your theory, Jake, instead of the other way around."
This is something especially large IT firms are notorious for, but, sadly, many boutique IT firms fall for the temptation too.
They heavily invest in creating - they believe - unique approaches, then spend a small fortune to trademark and copyright those methodologies, so now they want to use them on every project.
For example, while Six Sigma has its place, some firms take it to a higher level: "The six Sigma of toilet-flushing" or "The Six Sigma of washing a dirty coffee cup".
I believe I've read it in Malcolm Gladwell's book, Blink, that even General Electric, one of the most dedicated users of Six Sigma, admitted that while Six Sigma was good for certain purposes, it completely and totally crippled innovation.
Why?
Simply because Six Sigma has its pre-defined ways of doing things, while innovation has too much ambiguity. But certain aspects of innovation are too grey of an area for a rigidly defined protocol like Six Sigma. And since GE was hell-bent on following Six Sigma to the letter, innovation suffered. It took a bit of time to recover from that lunacy, and reintroduce innovation.
A few years ago, reengineering was a buzzword, but really and truly, it was just a euphemism for laying off some innocent people, while top managers who created the mess in the first place could carry on enjoying their "prosperous" careers uninterrupted. Maybe there is something right about Dilbert's cynicism.
A while ago I almost did some work with an IT security consulting firm in Toronto. Their problem was that they tried to "dump" their "unique" methodology on their clients regardless of their problems or needs. And the partners were surprised that no one was willing to pay for their "one-trick pony" solution.
Although the president thought their assessment was the cure for all diseases, including the dreaded green lurgy. This reminds me of Abraham Maslow's words...
"When all you have is a hammer, everything looks like a nail."
For this firm, this was the problem.
What makes boutique IT services really valuable is that they diagnose problems jointly with their clients and then together they develop a course of action to improve the client's current situation. Actually, when I'm hired to help IT firms with their business development, one of the first questions I ask them is how much their clients are involved in the diagnosis and the development of the solution. And here lies the problem. Very often, they are not involved at all.
Friend and colleague, Juliet Austin, a marketing strategist and copywriter for counsellors and alternative health professionals gives hefty amounts of homework for her clients. And guess what? None of her clients say, "I don't have time for this. Just do it FOR me and leave me out of it."
Juliet educates her clients about how she works and what they can expect. Her clients know that what they put in is what they get out. Her clients understand that while Juliet delivers the value, it is their responsibility to turn that value into results and lasting improvements in their businesses. Her clients work their arses off to keep up with the homework and achieve amazing results.
I think it was Sheldon Rampton and John Sauber's brilliant book, Trust Us, We're Experts that inspired me to include this section. Considering the heading, I'm fairly certain. This little book nicely summarises how certain professions, especially the PR (invented by Edward Bernays, a man of mixed reputation and notoriety, in the 1920s) industry, has been systematically misleading people for years and years.
What this means to IT service firms is that they try to dominate client work and turn what's supposed to be collaboration into dictation...
"Dear client. You're in deep shit. Don't argue with us. Just do exactly as we tell you and don't ever question our recommendations and keep throwing money at us."
The way I see it, most clients know the solution to their problems, but they are facing the dilemma of a sculptor. The sculpture is inside the granite. It's just a matter of chipping away the extra bits and bobs. David had always been in the granite. And it was Michelangelo, and no one else, who knew how much stuff to chip away to reveal David.
Most of the time, clients know what they want to achieve, and you just have to help them to build a bridge from their current problems to their desired results.
Quite often, IT pros say they've seen certain problem before, which is hurting to clients. Remember they believe their problem is unique, and since they've come to you they know you've seen something similar before. But if you emphasise what a routine problem this is, you essentially say...
"You're just a ho-hum business with a typical pedestrian garden-variety IT problem. Watch me solve it FOR you."
The important point is that clients want to be involved in the solution because that makes them part of the solution. As a result, they own the solution. That is why it is vitally important to work out each problem jointly with clients. You will be higher regarded if you lead your clients to their own solutions than if you give them your solutions.
According to Dr. Edgar Schein (see his books on Process Consultation), over 90% of consulting recommendations don't get implemented because clients don't feel emotionally connected to those solutions, and purely out of pride, they stay with their old systems and methods which is theirs, regardless of how erroneous they are...
"Dear Consultant. I know you can give me a ready-made castle, but I rather stay in my mud shack, which I have designed with my own brain and built with my own hands. I am proud of my shack and myself for building it."
Creating small improvements with the active involvement of clients has more value than creating large improvements and offering them to clients without their active involvement. Many IT firms that charge hourly rates use this approach to milk their clients...
"Dear Client. Our rate is $350 per hour, and we have no idea how long the project will take. Just be patient, sit tight and keep paying us."
Using an old Hungarian proverb, one button costs more than the whole coat. You have probably heard about legal cases, where it took $100,000 to solve a $10,000 issue.
This can happen to IT firms which are involved in hard-core cross-selling. When a law firm can't sell law to a client, it tries to sell cooking classes, fishing vacations or even artificial insemination services. Improving the client's condition is negligible, for the emphasis is on selling something the firm receives a hefty kickback on from one of its "strategic partners".
You can observe the worst manifestation of this strategy in large IT firms' strategic partners, like IBM, Cisco or Microsoft. Those firms are really commissioned peddlers for IBM or Microsoft.
Just as many doctors are commissioned drug peddlers for various drug companies, many IT consulting firms have gradually become "box pushers." For these firms, every client problem can be cured with the most expensive IBM server running the most expensive Microsoft operating system.
The problem is that when you have a pre-created agenda, you can't pay attention to your clients' real problems. It's like a doctor who decides to measure every patient's blood pressure, regardless of what problems they have.
For good measure, those doctors also try to sell blood pressure monitor and a few tubs of blood pressure medications to every patient just to be on the safe side.
There is a phenomenon called the participative universe, and physicist John Wheeler Archibald has done extensive research on it. The essence of the participative universe is that we find what we're looking for. If I look for Hitler as a monster, I can find many references. But if I look for Hitler as a hero who contributed a lot of good things to this world, I still can find many references.
This is the reason why when IT consultants walk into their clients' premises, they discover their clients need top of the line and very high-priced something.
When HR experts go to the same client, they conclude the client needs some bloody expensive HR solution.
And when sales experts go to the same client, they decide the client needs a very expensive sales training programme and a good motivational speaker (who happens to be the sales trainer).
Why does it happen? Simple? The IT dude is looking for IT problems. The HR dudess is looking for HR problems. And the sales trainer is looking for sales problems. And voila, thanks to the participative universe principle, the Universe participates in giving them what they're looking for. A need for IT solutions, a need for HR solutions and a need for sales solutions.
As the saying goes, the way things change when you look at them depends on the way you look at them. If all you have is a hammer, then sooner or later you'll find a nail that sticks out and has to be pounded in. That's why when you decide to watch TV while having dinner, you stay stuck to the tube even after finishing your dinner. And you always find something worth watching.
Even worse, you always find something else to eat too. So you spend the whole evening watching TV and stuffing your head.
Consciously you know you have other things to do, but subconsciously you're looking for ways out. And since subconscious thoughts are always many times stronger than conscious thoughts, you'll find something worth watching. That's all to it.
So, make sure you meet your client with a clean slate and without specific expectations. Expectations can warp your diagnosis, so stay clear of them. This is important because you're expected to be an unbiased trusted advisor not an IT vendor.
This is caused by the notorious time-based fees. What is the objective here?
Selling more time and more tasks regardless of how much difference it makes to the client.
Of course, many IT professionals rebel that they would never do anything like that.
And I buy that.
But consider this: How often do you exceed the speed limit on the highway when you know that the cops don't see you? I know the answer. It's either "always" or "almost always." It's human nature.
Far too many IT service firms neglect marketing altogether and accept new clients rather indiscriminately.
So, once they have their projects, they try to expand them as much as possible.
And here come inflated billable hours and unnecessary deliverables. The problem is that at one point clients will recognise these intentions, and these professionals get kicked in the arse and fly out of their clients' premises head first with no hope in hell to ever be called back.
One area you can observe this is on IT firms' websites.
They have many unnecessary bells and whistles, but most of them don't contribute to those websites' profitability. They are fancy expenses design firms manage to sell to their clients but are no more practical than a bicycle for a fish. I suppose, on an hourly basis even selling foot massage to centipedes can be a good business. But is it practical?
This is why you have to learn how to charge for the perceived value of your help and support, so you do what your client's company needs to improve performance and not what your buyer wants as a personal whim.
The way I see it is that if I'm held hostage, the last thing I want the rescue commando to do is to start polishing each bullet before loading them into their guns. Well, I don't mind if they kill my captors with dirty bullets.
And what would piss me right off is if they handed me an invoice after the rescue, "5 hours of bullet polishing @ $250 per hour = $1,250"
A large percentage of the work many boutique IT service firms do is "bullet polishing". And they keep doing it because they can bill for those useless hours. Legal? Yes. Ethical? You must be kidding.
I believe the essence of IT service firms is to establish the perceived value of a service, get paid for it, then deliver that service on spec, on time and on budget using as little time, effort and resources as humanly possible.
Just as Sun Tzu wrote in the Art of War...
"What is essential in war is victory, not prolonged operations."
Similarly, what is essential in IT services is achieving the client's objectives, not the prolonged busyness of performing useless tasks day in day out like a demented ox for the sake of selling more billable hours.
Granted, some jerk clients want to see you sweat and struggle to deserve your money, but you should ruthlessly fire them.
The best clients hire you for your unique expertise, which you can perform with style and grace not with struggle and buckets of sweat.
So, what is the answer here?
Gill Wagner of Honest Selling (honestselling.com) uses the magic wand method. In his book, How To Become The #1 Salesperson At Your Company, he asks this question...
"If I could wave a magic wand right now and produce that new business (that is, the value* that has to be delivered to achieve certain business results), what would you pay me to wave the wand?"
As an outsider, you can't produce business results for someone else. Only clients can produce results for themselves using the value that you've delivered.
If you think of the Emperor has no clothes story, the emperor's advisors come to mind. In order to protect their status, paycheques, pension plans, medical plans, etc., they always told the emperor something that pleased him. This is how most employees operate: "I hate my job, I hate my boss, but I do "anything" to receive my paycheque." This statement may sound drastic, but statistics indicate that some 87% of all employees hate their job and/or bosses.
A recent Gallup Poll study indicates that 59% of the workforce is disengaged, 14% of the workforce is actively disengaged and that a mere 27% are engaged. The bad news is that most work places have 3 out of 5 disengaged workers. According to Gallup, these people show up like sleepwalkers on the job. They have one single interest regarding their jobs: Getting the paycheque. Beyond that, as far as they are concerned, the company can burn down and the owner(s) can be eaten by a crocodile or run over by a steamroller. A bit more bluntly, they don't care. And if the competition offers them one or two extra pennies, they desert their companies without a second thought.
And at this point we tend blame these people. But that's the wrong approach. It's the environment that pushes them out. If I remember correctly, 63% of all attrition is caused my moronic managers' chasing good people away. But based on conventional wisdom, the world of business is creating more and more moronic managers. Some 35% of newly appointed managers get fired or leave their posts within 18 months of appointment. Reason: Incompetence. The peter principle kicks in: People are promoted to their level of incompetence.
The same dynamic plays out between IT service firms and their clients too. Many IT pros try to please their clients at any price just to hang in on projects a little bit longer. And why do they do that? Because this message comes from their bosses, "Just grit your teeth and hang in there for a few more hundreds of billable hours."
I believe we earn more respect when we risk the relationship. And if you have this awkward feeling of "I can't afford to lose this gig", then get a bank loan and feel safe. The fact is clients pick up from your behaviour when you're after their money.
Telling the truth sets both you and your clients free. Yes, it may piss them off first, but it is part of the process. You can't have a baby without going through the labour pains. But consider this: How many mothers do you know who hate their doctors or midwives because they think they suffered "excessive pain" during labour. Not many. They are far too happy with the end result, the happy and healthy baby, and have neither time nor inclination to lament on how tough the delivery process was.
I knew a doctor in the delivery suite at the hospital where I used to work who made women in labour talk a lot about their plans with their babies. He had heated discussions with women about the colour of their babies' cribs and other seemingly minute topics that were vitally important for those women.
By the same token, does it matter how tough and challenging you are on your clients, if they know how sweet the end result is? Yes, and you have to rub their noses into the sweetness of the end result. But you also have to rub their noses into the hard work they have to do to get there.
Healthy clients, with abundance mentality, high self-esteem and healthy self-image, have more respect for tough love than soft pity.
Of course, there are moronic clients who only demand the end result but are not willing to travel on the bumpy road that leads to the result. Just dump them as quickly as you can.
Look, here in Canada, according to Statistics Canada, 19% of the population is mentally disturbed to various degrees. The number in other countries is similar, so we can bump into some of those nutcases every now and then. Just ignore them and move on.
Yes, you can lose money in the process of being outspoken for some clients are dumb enough do kill the bringer of bad news, but nevertheless you must do it. As a pro, you must be independent enough to save clients from themselves too, and save yourself from self-righteous egomaniac arseholes.
Every client problem is unique and they rightfully expect custom-made solutions to their unique problems.
At the tactical level, solutions may be similar, after all direct mail is direct mail, but there is a huge difference at a strategic level.
So, where is the problem here?
Most IT Service firms jump to tactical actions steps far too quickly. They don't take time to properly diagnose their clients' problems. It's the same as your family doctor orders a triple bypass surgery on you because when he checked your blood pressure at your annual check-up, it was a tad high.
Many firms, especially large ones, are "famous" for re-selling suspiciously similar solutions to several clients often with drastically different symptoms and root causes. The problem is that many IT service firms, especially the large ones, suffer from an incredible internal inefficiency and low productivity.
As a result, they will do anything to gain some extra money without busting their arses to add new value. So they can pump in more billable hours and create deliverables until the cows come home, but they are about as useful as a milking bucket under a bull.
If you need a tooth to be extracted, you won't value your dentist's work higher just because she goes the "extra mile" and pulls out a second tooth as well. Would you pay for the extraction for the second tooth? Most people are more likely to sue the dentist for damages.
So value is not about more of the same. Value can only be delivered after taking time to diagnose what sort of value your clients' businesses really need - not just what they personally want - to improve their situation.
And since every client is unique, and you develop every solution jointly with clients, the solution is unique to the client and can't be recycled to other clients.
As an IT pro, your greatest value is thinking on the edge. You've been exposed to cutting-edge concepts and ideas in several industries, and you can bring all this knowledge to our clients and synthesise these bits and bobs into new knowledge that contributes to improved conditions for your clients.
One of the reasons why you get hired is to bring boldness to the corporate dullness and stir the pot. Yes, after a while things become dull in any organisation.
It's like a manure heap on a farm. If you don't touch it for a while, then the smell subsides. But when you go at it with the pitchfork, then you realise that the smell is still there.
The same happens in organisations. When it becomes an acceptable practice that the president rogers his secretary in the photocopier room, after a while, the "moral stink" blends into the company. This event alone can bring up various organisational issues that stink to high heaven way beyond the walls of the organisation.
But now, thanks to the IT pro, the issue is on the table and it can be dealt with openly. Of course, at this point many idiotic presidents fire the IT pro, which makes the situation even worse. The salesperson starts talking to everyone who's willing to listen.
Me too type IT pros who play it safe don’t deserve to advise their clients, most of whom are visionaries. Those clients want quite a bit of boldness from in IT pros. I believe IT pros’ role is to act as a pitchfork and keep turning the organisational manure pile to make sure it can never start stinking inwards. Whatever stink there is, it must come to the open, so it can be dealt with.
While conventional wisdom says that people with MBAs make the smartest consultants, so the best IT pros should also have MBAs.
Not necessarily MBA, but learning your target market at a business level, not only at a tech level, certainly helps a lot.
That takes you beyond the level of a tech vendor because you can sustain a discussion in the boardroom or C-suite and you understand the link between better technology and business.
I suggest my clients that that they hire their IT pros advisors with broad, even eclectic experiences. People who'd gone through pretty broad exposure or expertise, and over time, narrowed their fields to IT.
And if possible, experience from the trenches not from the classrooms. Why? Here is why...
There is a brilliant entry in David Maister's blog about the cheating rate among business students. Apparently 56% of business students cheat because they believe this is how the business operates in the real world. Well, 56% admitted cheating. The real number was probably a tad higher.
My thinking may be simplistic, but the way I see it, liars lie and cheaters cheat. And they do so under any circumstance, not only in the classroom. But that's only me.
No doubt, marketing any kind of professional services is pretty complex.
What makes IT service marketing even more complex is that what you sell is a total "black box" for most of your clients.
If you do HR or logistics consulting, most of your clients know something about HR or logistics. So, at least, you can discuss subject matter problems with them.
But with IT, many of your clients don't know anything.
They know the technical problems they are experiencing, let's say, back-up and recovery problems.
Accepting this diagnosis on a face value means you can charge commodity prices.
Why? Because you offer a commodity service to tweak some hard drives and other bits and bobs.
But with good marketing, you can dig deeper and discover the business implications of this technical problem.
The obvious business implication is that data is lost and that can have an impact on the client's sales, productivity, brand value and overall performance and profitability.
And while replacing some hard drives (server room work) is commodity work, increasing the client's performance (C-suite work) is premium work.
In the case of commodity work, technology is used as an end itself.
In the case of premium work, technology is used as a means to an end: Increased corporate performance.
More accurately, increased corporate performance capability. As an outsider, you can't increase your clients' performance. Only they can do it by integrating the value that you've delivered into their operations.
As an IT service professional, you sell business solutions, not time chunks and technical tasks.
My cardiac surgeon girlfriend can confirm the first statement and, as a former soldier and gravedigger, I can confirm the other two.
As an IT pro, your greatest value is thinking on the edge, and applying that edginess to your clients' situations.
But make sure you clearly communicate this edginess in your marketing as well.
It's all well and good, but to apply it all, you need to know how your target market perceives your firm.
Is it a fungible IT vendor or a respected IT authority?
It's the market that hangs your brand around your neck based on the outside perception of your firm.
But you can also influence the outside perception by tweaking your firm's inside reality, that is, your culture, by consciously transforming your firm from vendor to authority.
In this peddler quiz, you can check whether your firm is more of a fungible IT vendor or a respected IT authority.
In the meantime, don't sell harder. Market smarter and your business will be better off for it.