Outsourcing

Answering client questions about perceived risks and benefits

Chip Camden notes that a client's decision to hire a consultant should come down to a risk/benefit analysis. With that in mind, here are seven questions prospective clients might ask you, along with Chip's thoughts on how to answer them.

 Back in 2001 when the first IT business bubble popped, Tom Rodenhauser noted that potential clients were getting pickier about who they hired, and he offered a list of nine probing questions that clients might ask before signing you on. It's interesting how history is repeating itself, although this time around it's more than just the IT industry that's in trouble. Because everyone is trying to cut expenses, the economic downturn may even prove beneficial to IT consultants, if you can demonstrate that your services will save money over other alternatives.

For smart clients, the decision to hire a consultant should come down to a risk/benefit analysis. Every question they ask you will likely be a more specific version of, "How can we be sure that engaging your services will buy us more than it costs?" In practice, most interviewers are not that focused, and they'll probably wander into all sorts of vaguely related topics. But it helps if you pretend that the interviewer knows what they're doing and form your answers within the framework of, "Here's how I can benefit you."

With that in mind, here are seven questions prospective clients might ask you (some of the questions are from Tom's list), along with my thoughts on how to answer them.

  • How long have you been in business? If you've been consulting for nearly 18 years as I have, then you may feel confident about spitting that number out. But what they're really asking is, "Are we going to get halfway through this project and have you disappear to Bhutan to 'find yourself'?" Your answer needs to communicate your comfort and commitment to your business -- no matter how long you've been at it. The answer they want to hear is, "I've been very successful so far, and I intend to be doing this for a long time." An important part of that is, "I'm committed to keeping faith with my clients and finishing what I start." There's also a potential downside to longevity; for instance, they may wonder: Have you become stale? Do you know much about the latest techniques and technologies? If you're an old hand like me, you need to reassure them about these points. If you're a youngster, you might be able to use it to your advantage.
  • How many people are in your firm? Lots of consultants are scared to death to answer this truthfully. Why? Because they think that the real question here is about credibility -- that clients think only big firms know what they're doing. It may also go back to reliability: "If we're in a ditch and we call, will somebody answer?" But bigger firms can often move more slowly and have issues with communication and dropping the ball. They might have a few really smart people on board mixed with a lot of mediocre employees. Consulting groups also need to charge more for the same quality of work, because everybody in the firm has to get paid. I've learned to proudly answer, "One. You're hiring me for my expertise, and you'll get me and only me."
  • What related work have you done? Paraphrase: "Will you know what you're doing, or are we going to have to pay for your education -- both in your time spent and in the mistakes you'll inevitably make in your first encounter with this technology?" The operative word here is "related" -- what's related? Just because you know the programming language and platform doesn't mean that you automatically understand how to solve the problem at hand. Conversely, just because you'll need to come up to speed on some specific technology doesn't mean that you should discount your experience in the problem domain. Don't be shy, but answer truthfully -- you don't want to hide the real answer until the project fails.
  • What is your reputation in the industry? They're looking for assurances that you're not a charlatan. You should have been working to answer this question long before the interview. Letters of reference come in handy here, especially if they include specific stories of how you helped your client in ways that nobody else could. If you have published material online that's relevant (open source projects, blogging on the subject, etc.), provide links. You want to demonstrate that you are not only considered knowledgeable, but that you are also actively engaged with the community -- it shows that your interest runs deeper than consulting fees.
  • Do you guarantee your work? Translation: "If we don't like it when you're done, will you fix it for us?" Answer this one carefully. If you give a 100% unconditional guarantee of satisfaction, you might end up "fixing things" for the rest of your life. The client is trying to eliminate an entire category of risk in the project, but you don't want to take all that risk on yourself. Here's my recommended response: "Revisions and unforeseen requirements are a fact of life in our industry, and I bill by the hour. I'll continue to work with you until you are satisfied, but I don't work for free. However, if a failure is due purely to negligence on my part, of course, I'll make it good."
  • Can you give us a firm estimate? Again, the client is trying to eliminate a risk -- this time it's the unknown cost of the project. My answer: "Sure, but it will cost you. If you want a fixed price, I'll be forced to estimate very high in order to cover my risk. You'll get the best value if we stick with an hourly rate and let the estimate be just that."
  • Can you provide a detailed breakdown of hours and expenses? They want to make sure you won't pad your hours, so they want to know exactly what you were doing when. The right answer is, "Yes, to any level of detail you require." Then go one step further and say, "And I won't initiate any new activity without your approval." If they want to grant you broader decision-making powers, that's up to them.

If you can minimize the perceived risks, you remove a client's biggest objection to hiring you. But don't get carried away with securing the engagement to the point where you take on too many of those risks yourself. It's only good business if everyone's happy when the project is complete -- including you.

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About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

26 comments
support
support

Chip: Thanks! You hit so many critical hot buttons in the interview process with great insight and analysis!

Matthew S
Matthew S

The hard part is figuring out how to say "Yes, if you can give me a firm set of requirements" is a more engaging manner (i.e. get them to realize this point so it has more meaning instead of telling them). This is because even if you cover this very well, you can start to slip into looking like you are inflexible (i.e. strictly follow contract) and/or trying to buy the job (i.e. under-bid) and profiting from the inevitable change requests by inflating the charges. Handling the whole scope control vs. cost control issue in the context of bidding for work is probably a series of articles in itself. Excellent article!

Marty R. Milette
Marty R. Milette

I liked the point about 'you get me and only me'... One Finnish company I worked for (Endero OY) had a very nasty habit of bidding on contracts with the CVs of their best and most experienced consultants -- only to drop in freshly certified (or uncertified) newbies after the contract was won. They went so far as to ask me to train one of these guys to do the job I was bid-in for. (At which point I dropped them like a hot potato.) The worst part of this is that not only did they bait-and-switch on the consultants, they also billed these guys out at the experienced, senior consultant rates. Just before I left, they had a 'deal' set up to take kids fresh of out high school -- who hadn't even worked at a McDonalds yet -- and give them some certification courses -- and then bill them out as fully qualified consultants on real projects. Another great trick was to open a small office in Russia and then get the Russian guys a 'visitor' visa for Finland. As Russian 'employees', they'd get a salary of about $1,500 per month -- but they'd make the guys 'commute' to Finland to work on customer sites -- billing them out at full European consultant daily billing rates. Don't even get me started on some of the H1B shops I've done training for... There are a million scams running out there...

Justin James
Justin James

I've been on both sides of this (never as an independent consultant, but as an employee of a very small firm), this list is dead on. One of the worst things in the world is when you realize you've been sold a bill of good by a sleazy consultant... paralleled only by the disaster that happens when you say what you think the customer wants to hear, just to make the deal, regardless of the truth. J.Ja

PMPsicle
PMPsicle

Professional salespeople spend a lot of time determining the possible objections and their responses (often in advance). Unfortunately, most consultants are not professional salespeople. This type of thing doesn't come naturally to us. So thank you for the effort. I have been finding your third point ("related work") to be a big issue in my area. My expertise (project management and business analysis) cuts across software, business and industry lines. In fact, when choosing a business analyst or project manager the variation in industries and types of projects is the only true proof of abilities. In the case of a B/A the true skill is the ability to get the subject matter experts to open up and elucidate their requirements. In the case of a PM the skill is the same -- the focus, tools and use are different. Unfortunately, the clients in my area seem to be confused on this. Requirements are becoming more and more focused on the specific software package. Effectively saying that 1 year repeated 5 times is more important to them than 5 years of experience. I have, in fact, seen knowing the company's internal policies stated as a requirement numerous times. Effectively locking the desired skill set as able to "repeat so and so without thought". Or to put it another way ... "Our people are incompetent and replaceable so their involvement and acceptance is for political purposes only". The sad truth is that true innovation comes from either the "Eureka" moment or from "CID". "Eureka" moments (aka fortuitous discovery or fortuitous accident) just don't happen very often. And are more likely to fail than succeed. Copy, Import & Deploy is the only source of innovation where the result can be considered predictable. And "CID" can only come from outside the company's industry. To paraphrase Einstein ... you can't solve a problem with the same mental patterns that created it. You can't improve by doing things the same way even if you use new tools! Where am I going with all this? While I can discuss this with the hiring manager and hopefully convince him/her of the error of their ways, I'm usually forced to talk to the gatekeeper first. And since they haven't got a clue, and haven't got the "Umph" to stand up to their client and say "You're wrong" even if they did get it ... I'm effectively stymied with this particular issue. Ultimately, the point is that we (as entrepreneurs and salespeople) need to answer these issues for each point in the sales chain. And each of the issues (and questions) may vary for each point in the sales chain. Glen Ford, PMP http://www.trainingnow.ca

Sterling chip Camden
Sterling chip Camden

reason_to_hire = benefit - risk I'm sure that's over-simplified, but can you name any factors that don't fit into that equation?

rafaelapolinario
rafaelapolinario

Comprehensive list you got there. It sure is a great resource info, thanks for sharing your knowledge on.

Sterling chip Camden
Sterling chip Camden

Thanks much -- you're right about that. It's probably one of the biggest challenges we face.

Matthew S
Matthew S

They would probably never take me as a client then - contract should always have a bonus and/or hold-back amount (normally equating to the profit), which includes a metric, amongst others, tied to continuity of staff. So those staff in the bid would be stated as part of the statement of work. Part of the problem is, unless you are dealing with a large companies, smaller companies will sign a vendors contract as-is (or at least eliminate the obvious issues with chest-puffing pride ?cos we didn?t let them rip us off?), thinking that if it doesn't state anything 'bad' for them it is good. They forget that it is the 'good for them' stuff that is missing that will have more benefit in the long term - such as termination without cause (for both bad service reasons, & cancellation of the project itself ? a big thing going on at the moment ? with some surprises for some I?m sure), continuity of staff, staff changes on request (transition time without cost - have had to do this for both skill and cultural fit reasons) etc

Sterling chip Camden
Sterling chip Camden

Yes, dishonesty in engagements hurts everyone. Yet the temptation to stretch the truth just a bit in order to get business can be pretty great if you need the money. "I'm all over this technology" may really be saying "I read about it once, and thought it sounded cool" -- while the consultant makes a mental note to google it like crazy as soon as the interview is over.

Sterling chip Camden
Sterling chip Camden

I've seen that approach taken many times -- simplify and stratify the job to the point where we can hire people right of college and they'll do just as well as an expert. You and I know that: (a) you can never simplify any job to the point where brains aren't required. (b) attempting to do so severely limits innovation. I've always preached that while it's useful to simplify repeatable tasks (that's what computers are for, after all), for everything else you need innovative and intelligent people actively applying their knowledge and experience, and interacting with one another. So many companies just don't get that.

MarkCLewis
MarkCLewis

Same issues at this end of the country! It's frustrating.

PMPsicle
PMPsicle

I love that equation .... can I use it? The only things I want to add is that a) you need to do this for each link in your sales chain. b) the questions/issues may vary for each link. c) the answers need to be from the (communication) receiver's point of view. (You're the transmitter). d) remember that the "receiver" (i.e. client) is a human being ... not a company. e) CID ... or to use Dan Kennedy's version (I'm on a kick, what can I say!) "Steal and Deploy". What works for others? Copy it, tweak it for your needs, and then use it. f) test it ... try it and then ask if it works. Adjust and test again. Glen Ford, PMP http://www.trainingnow.ca

PMPsicle
PMPsicle

Question 1. Is this just a Canadian thing or are you experiencing it in other countries? Question 2. Is this something we created for ourselves, is it the result of a lack of training of recruiters or is it a failure to communicate our skill sets properly? Glen

PMPsicle
PMPsicle

I said it in point e) but I realize that I need to say it more clearly. People buy for emotional reasons. Not rational reasons -- emotional reasons. Rational reasons are used after the decision to justify the decision. (ouch) What that translates to is that one of the first things to identify is what emotions will drive or prevent the purchase. Then identify the elements (like Chip's list) which will affect (or better effect) those emotions. By answering the elements in your pitch, you satisfy the emotions which support a purchase decision. That's the basis behind all those "Dan Kennedy" direct action sales letters you see masquerading as web pages. The reason they are the length and format they are is that they are focused on making you feel good about your purchase ... Effectively making you want to buy. People are notoriously hard to sell to ... but they're very happy to buy. When selling to companies we need to remember that we never actually sell to companies. We sell to people in those companies. We sell to the recruiter, we sell to the hiring manager, we sell to their boss. These are all individuals - these are all people who are making emotional commitments to buy. Glen Ford, PMP http://www.trainingNOW.ca

herlizness
herlizness

> usually, they WON'T compare it at all; they'll toss your resume and that's that. And that'll happen even when the developer is going to be coding against a DAL and knowledge of ANY particular data store is basically irrelevant. I can't really blame recruiters for this kind of scenario ... if a shop has abstracted away the DB they should never even mention Oracle, SQL Server or DB2.

MikeGall
MikeGall

Little different for me as I haven't been a consultant, but I worked at a hospital once as a programmer analyst. The recruiter knew plenty about what the company could offer me, educational expenses, salary, pension etc, but didn't have any idea about the field. In my experience if a recruiter doesn't understand the job they are hiring for, they'll look for someone that matches the description that the department that is hiring gives them. Do you have: at least X years experience with this?, Have you managed that? etc. They have no means of comparison in order to look for something else. For example if they are looking for an Oracle admin with 2 years experience, and you say I haven't used Oracle but I have 10 years experience with DB2 and SQL Server how do they compare that if they have no idea what you're talking about? If your lucky you'll get an interview and the department head in question will make the call.

Sterling chip Camden
Sterling chip Camden

1. I can confidently say that it also applies at least to the US and the UK. 2. That's a very fruitful question for thought. In theory, we should be able to overcome such notions through effective communication. But in practice, many recruiters don't know enough about what they're doing to be able to get it.

PMPsicle
PMPsicle

Two great quotes in one thread? Be careful TR Chip's going to be demanding more money soon! P.S. Can I steal this one two? Glen

Sterling chip Camden
Sterling chip Camden

... make your proposal look like a steak -- and present it right before lunch.

PMPsicle
PMPsicle

True ... and during the sales process we can and should work toward making those be on our side. Good point. However, I was more referring to Maslow, hot buttons and other such emotions that are present when (or even before) we begin the sales process. When we sell to businesses we sometimes forget that the PERSON buying from us at each stage is a person with all the emotions, needs, hot buttons etc. of a person buying for themselves. In fact, people usually buy for the business the same way they buy for themselves. That's a good thing by the way. Unfortunately, we in IT are responsible for having placed machines in between so we do need to consider that as a stage in the process. Glen Ford http://www.TrainingNOW.ca

Sterling chip Camden
Sterling chip Camden

... buyer's remorse and the self-satisfaction of having made a "wise choice". During the interview process, both are anticipated rather than experienced -- we can use the anticipation of both as stick and carrot, respectively.