CXO

Nine questions clients should ask their consultants

The economic downturn has led to a buyer's market in the consulting industry. Columnist Tom Rodenhauser offers these questions that savvy clients should ask before choosing a firm. Consultants should have answers ready if they want to win their business.


At the height of the frenzied Internet consulting boom, we heard repeated stories about the bursting business pipelines and the finicky selection process at many consultancies. Fish-in-barrel shooting did more than just eliminate the need for a sales force. Many clients that were exposed to “fear selling” abandoned the commonsense practice of qualifying their consultants.

Now that clients have regained the upper hand, we see more of a vetting process. But even with the aid of a most trusted advisor, clients should always ask a few simple questions to help separate pretenders from contenders. Consultants should be prepared to answer the following client questions if their firm expects to win business:
  1. How long has the firm been in business? Ninety percent of all consulting firms fail within five years. There will always be exciting new firms to consider, but longevity usually enhances credibility.
  2. What kinds of assignments has the firm conducted that are applicable to your problem? Consultants are experts at translating best practices across a broad variety of businesses. But clients are usually best served when selecting firms that demonstrate specific results that parallel their particular problem.
  3. What is the firm’s general reputation in the business community, particularly in your industry? Outside perspective is fundamental to the consulting process, but hiring consultants unfamiliar with your industry is dangerous. (This is particularly applicable for e-business.)
  4. Who is the lead consultant or project leader, and what is his or her background and experience? Consultants have a reputation for pulling the infamous “bait and switch” on clients. Put the consulting team in writing before the project begins.
  5. What specific value measurements does the firm employ for each assignment? Strategy consultants generally use softer client-satisfaction techniques (client surveys) than operations-oriented consultants, who often fix fees against specific improvement benchmarks.
  6. Can the firm provide a detailed breakdown of fees, including all costs of team members (including clerical) as well as out-of-pocket expenses? Larger firms deal with greater overhead and so need to allocate those expenses throughout all of their consulting engagements.
  7. Does the firm guarantee its work? Most consulting firms will work to the client’s satisfaction, but rarely do firms offer a 100-percent, money-back guarantee. During the proposal phase, clients should make sure that consultants specify their deliverable(s) as precisely as possible.
  8. Does the firm conduct a post-engagement analysis? Consultants that routinely follow this practice clearly have an interest in providing superior service, which is the sign of a quality firm.
  9. What will be the operational impact of this consulting assignment on your company? Consultants help companies reinvent their businesses. Achieving operational gains of 20 percent don’t require a consultant’s help. Any consultant that offers such marginal gains should be avoided.
Inside Consulting is written by Tom Rodenhauser as a free weekly supplement to The Rodenhauser Report. The report informs senior advisors and business executives of consulting trends and best practices. Subscription cost is $295 per year for 10 issues. Copyright 2001, Consulting Information Services, LLC. Reproduction is prohibited. Quotation with attribution is encouraged.

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