Competing against larger firms and winning

If you're a small firm competing against big consultancies for business, your size might be your best defense. Columnist Alan Weiss offers methods you can employ to convince a client that smaller is better.

We are all considered to be in competition with larger consulting firms, sometimes the giants like McKinsey, Ernst & Young, BCG, and the like. (If you’re never in this position, then you’re probably never bidding on very large projects for major organizations. You ought to be.)

But how do you compete against a larger firm? Do you pack your bags and go home, lie about your actual size, or disparage the behemoth?

Fortunately, there are more positive alternatives. You just need to explain why smaller is better. What follows are some points/arguments you can make to convince a buyer not only that size doesn’t matter when it comes to capability, but that large size can actually be a disadvantage in meeting his or her needs.
  • The buyer is always dealing with the principal when he or she is dealing with your firm. You are the relationship manager. There is no junior partner to whom responsibility will be transferred. There is no decreased accountability, no “handoff” to a less-informed colleague. If the buyer’s interests are at stake continually, shouldn’t the buyer reasonably expect the principal’s continual involvement?
  • You provide resources on a “just-in-time” basis. That is, your projects do not have to cover excessive overhead, such as multiple offices, large administrative backup, recruiting, partner perks, and so on. You are organized to efficiently provide everything the buyer needs but nothing more than that. So the buyer is paying for value and results, with only minimum overhead.
  • There is greater likelihood of observing privacy and confidentiality with fewer people working on the project. In addition, the fewer people working on an account, the fewer “filters” there are to go through. Larger firms sometimes have a problem dealing with a number of revolving consultants’ differing perceptions or interpretations of information, and this can stall results. You (and the few people you might also involve) are constant, removing the need to sift through dozens of differing perceptions.
  • You’re faster. You can respond to requests quickly and return all calls within two hours. (If you can’t, then you’re not taking advantage of your smaller size.) Your client needn’t worry about a bureaucracy, delays, and unfamiliar people answering their calls.
  • Since you handle fewer concurrent projects than larger firms, your attention is relatively undiverted. The client doesn’t have to “compete” with another dozen or so of your clients, some of which may be larger or more time-demanding. You structure your work so that every client receives maximum attention.
  • Investment is controlled. There is no “meter running.” You work for a fixed, value-based project fee (if you don’t, read Chapter 8 of my book Million Dollar Consulting, or listen to The Consultant’s Treasury). Large firms can’t afford to do that as readily because of all the people involved and their own insistence on measuring their success by billable hours. You measure your success by client objectives reached, not time units.
  • Inevitably, you are less expensive. (Note that this is way down here in the list, because you shouldn’t be that much less expensive!). There are economies to using someone who can base their fees on each situation and not on a predetermined service scale or their need for reaching a practice quota.

Add your own reasons to these, and have them handy anytime you know that a prospect is considering other, larger firms. Don’t be rocked back on your heels, defensively trying to explain why you can do the same things with fewer resources. Defense might win football games, but it doesn’t accomplish a thing in the sales process. Take the offensive, and explain why smaller is better for this client’s particular needs. Don’t disparage the competition; simply point out your superiority.

If you don’t believe that, then you have no right being there anyway. Million-dollar consultants don’t get that way by assuming they start from an inferior position. They get that way because they know they’re the best alternative, and they merely have to educate the buyer in that regard.
Alan Weiss is the founder and president of Summit Consulting Group, Inc., a firm specializing in management and organization development. Summit's clients include organizations such as Hewlett-Packard, General Electric, The New York Times, Mercedes-Benz, Coldwell Banker, and more than 80 other organizations in four countries. He advises executives and consultants on business objectives and personal goals. He has also written 13 books, including the best-selling Million Dollar Consulting: The Professional Guide to Growing a Practice.Copyright 2000, Alan Weiss.

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