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additional services can be a nightmare.


Keys to Success
Professional services firm executives are ambivalent about the exact role
the proposal plays in the new client acquisition process. “In a best-case sce-
nario, proposals aren™t delivered until the very end of the sales process and
aren™t very important at all,” says Alan Osetek of Carat Interactive. How-
ever, anyone who™s been around awhile knows that best-case scenarios are
the exception, not the rule, and that many cautious, risk-averse buyers use
the proposal as an important tool for selecting service vendors. And its role
differs depending on the service being provided, the prospect™s industry,
and a thousand other possible criteria. Nevertheless, there are four keys to
successful proposal development, regardless of the service specialty or in-
dustry being served.


Hunt Wisely
Determine where your firm has a meaningful competitive advantage”mak-
ing sure you can serve that market segment successfully and profitably”and
focus new business acquisition efforts squarely on that sector. Establish and
maintain a high profile in that sector so prospective buyers can find you. If
you have an elephant gun, go elephant hunting and stay away from the small
game, no matter how attractive it may seem. This approach will provide a
solid foundation for the proposal development process and improve conver-
sion rates. “My firm is three years old and growing. In the early days we took
on a few clients that were out of our focus area because we felt we needed to
be aggressive. In every case the situation failed and put excessive pressure
on the firm that comprised our health and distracted us from much more im-
portant business development initiatives,” says Antony Abiatti of SCS Finan-
cial Group.
178 The Front Office: Driving Sales and Growth

Allocate Resources Intelligently
New client acquisition opportunities never materialize as often as we™d like,
so it™s important to make the most of them. Put your best resources on the
job and be diligent in follow-up and nurturing a new relationship. Get a sys-
tem in place and follow it; be process oriented. The first meeting with a
prospect is critical. The firm must do whatever it takes to make a positive
first impression”that means bringing in senior resources if the prospect has
been qualified”and walk prospects down a proven path to convert them to
clients. Too many services firms f lounder not because their service offering
is weak or market demand is soft, but because they presumptuously assume
that prospects should be able to easily recognize their value, and if they
cannot, tough. That approach may work for a lifestyle firm whose staff is
content earning a comfortable living serving a handful of clients, but
growth-oriented firms need to get serious about business development to
prosper.

Give Prospects a Reason to Buy
Sales prospects are generally risk averse and constantly on the lookout for
opportunities to maximize rate on return (ROI) with minimal investment,
but buyers are also human beings, and they can recognize a well-managed
and competent organization when they see one. And they™re often willing to
pay a premium for its services.
So think about how a new prospect interacts with your firm”from ini-
tial contact to signing up for services”and consider whether you™d do busi-
ness with your firm if you were he or she. Would you be able to readily
identify your organization™s value proposition or how you are different from
the competition? Does every interaction reinforce the firm™s key attributes,
or do prospects leave a meeting confused or unconvinced? Don™t rely on
the personality of the firm™s point person to get the job done. Establish a
formidable marketing strategy and nurture it. You™ll realize dividends in
client acquisition.

Take the Long View
The barriers to entry in the services industry are practically negligible”in
some cases only a computer is required”which is why there are so many of
us competing for business. Young firms hungry for business will always be
around, providing seemingly comparable services for dramatically reduced
fees. While that™s a strategy for breaking into a sector, it™s not a sustainable
one. And we know that four of every five new businesses launched are out of
business within 36 months.
While it can be difficult, taking the long view is what successful firms do,
and they are disciplined enough to walk away from situations with undesirable
179
Proposal and Reference Management

characteristics. This philosophy includes losing gracefully. Top firms that
employ a refined new business acquisition strategy win about two of every
three proposals they submit, which means they lose 33 percent of the time.
The good news is that they demonstrated competency along the way, and
even though the prospect didn™t choose them, they™ve developed a relation-
ship that can be nurtured over the long haul. And it™s amazing the number of
“lost” clients who pop up somewhere down the road”either in the middle of
a failing project or in a similar position at another company.


Summary
Best-in-class professional services firms view proposal development as a
piece of an integrated new client acquisition process. The most effective
business development efforts involve structured, in-person meetings with
prospective buyers to present qualifications and accurately assess needs. The
outcome is a highly specific proposal that exactly meets the needs of the
prospect organization and ultimately gives the firm the best opportunity to
acquire new business. Professional services firms that struggle with the pro-
posal development process likely haven™t allocated the necessary resources to
developing a new client acquisition strategy and an accompanying marketing
strategy that supports the effort.

RESOURCES
Alan Weiss, How to Write a Proposal That™s Accepted Every Time (Fitzwilliam, NH:
Kennedy Information LLC, 1999).
Harry Beckwith, Selling the Invisible (New York: Warner Books, 1997).

NOTES
1. Harry Beckwith, Selling the Invisible (New York: Warner Books, 1997).
2. Jim Jonassen, Partner, Riviera Partners, phone interview with the author (Feb-
ruary 20, 2004).
3. Antony Abiatti, Director, SCS Financial, phone interview with the author (Feb-
ruary 18, 2004).
4. Alan Osetek, Sr. VP, Carat Interactive, interview with the author (February 19,
2004).
5. Sarah Casalan, VP of IT, Ecko Unlimited, e-mail correspondence with the au-
thor (February 17, 2004).
6. Marc DeCourcey, Consultant, phone interview with the author (February 18,
2004).
8
Strategic Partnering
T. GREGORY BENDER


If there is a way to do it better . . . find it.
”Thomas Edison1




This chapter highlights the importance of strategic partnerships for profes-
sional services firms, and the critical success factors involved with building,
maintaining, and growing those partnerships. Professional services com-
panies face tremendous challenges in training their employees to keep up
with the pace of innovation, new products, and services. Strategic partner-
ships help these service providers create new business opportunities, en-
hance their professional services offerings, leverage partner workforces,
identify new revenue opportunities, and grow an organization on a faster
track than otherwise possible. Partnerships also enable companies of all sizes
to successfully compete in the marketplace with larger competitors through
combined service offerings. In the 1990s, most successful startups embraced
partnering to grow their organizations and provide better services to their
clients. Big firms as well as small firms have learned that smart partnering is
smart business. Partnering creates the fundamental building blocks for com-
pany success.
Think of strategic partnerships as similar to new business units that fill
specific needs and services within the organization. Strategic partnerships
can be a wide variety of things depending on organizational goals and the
business plan. Partnerships can be service driven, product driven, sales
driven, cost driven, competition driven, survival driven, or a combination of
all these directions. Once a partnership is formed, it must be nurtured: neg-
lect can kill the goose that laid the golden egg. Working to maintain partner-
ships can make the difference between success and failure. During economic

180
181
Strategic Partnering

downturns, partnering makes even more sense because partners help bring
each other business as well as leverage their employee skills and expertise.
Partnerships can be high impact, medium impact, or low impact depending
on what you want from them and the energy and time that you are willing to
invest in them.
There are a variety of benefits available to companies who succeed at
strategic partnering. According to Dr. Judith Kautz of Small Business Notes
(www.smallbusinessnotes.com), companies participating in alliances report
that as much as 18 percent of their revenues come from their alliances. Some
of the benefits firms can achieve through partnering include:2

• Achieve advantages of scale, scope and speed
• Increase market penetration
• Enhance competitiveness in domestic and /or global markets
• Enhance product development
• Develop new business opportunities through new products and services
• Expand market development
• Increase exports
• Diversify
• Create new businesses
• Reduce costs



Why This Topic Is Important
Throughout the 1990s, strong strategic partnerships and alliances were the
successful building blocks and winning strategies for companies such as IBM,
Sun, Amazon, and many successful e-commerce startups. Many later turn-
around strategies embraced the concept of creating and growing strategic
partnerships to create and build new revenue areas for a company. Today a
professional services firm can offer a broader range of services to its existing
customers, increasing the value of each customer through strong partnering.
During the mid- to late-1990s, most traditional advertising agencies cre-
ated strategic partnerships with newly established interactive agencies
and /or web development companies that specialized in online branding, mar-
keting, and web application development. This is a strong example of how
these professional services organizations involved in branding and marketing
could partner with companies that had other areas of specialization. The
agencies focused on traditional branding and marketing while the interactive
agencies and web development companies focused on digital marketing and
interactive technologies.
182 The Front Office: Driving Sales and Growth

During the 1990s, ad agencies could not keep up with the growth of tech-
nology, and their clients were demanding web-based services incorporating
interactive technologies. It was too costly to build these new media in in-house
departments overnight and train staff appropriately for these agencies. Many
large agency conglomerates such as Omnicom Group, Inc. and WPP Group in-
vested in interactive technology shops that specialized in web-based technolo-
gies (e.g., Agency.com). Ad agencies wanted these interactive shops at their
disposal for their demanding clients. By investing in these shops and partnering
with them, agencies created the ultimate partnerships and strategic alliances.
Traditional agencies turned to these growing upstart web shops that ex-
celled in new media technologies and web marketing. During client pitches,
the ad agencies came in as traditional marketers while their new media coun-
terparts came in as web hotshots that understood the medium and could
implement the technology required. Both were professional services organi-
zations that shared revenue opportunities and brought deals to the table.
This created win-win relationships and strengthened their ties.
In 1980, Microsoft was a f ledgling, small company. IBM needed an oper-
ating system for the IBM PC. Microsoft, against all odds, was able to con-
vince IBM to partner with it because Microsoft had a unique technology
solution, even better than the one IBM was developing in its own labs. Micro-
soft™s partnering deal with IBM set the foundation for Microsoft and cata-
pulted them to unparalleled financial success. Microsoft would not be the
success it is today without the IBM deal. In this brilliant partnering exam-
ple, Microsoft (the startup) established its market by partnering with IBM, a
huge company at the time.
In the 1990s, IBM focused its turnaround strategy on professional ser-
vices and strong partnering relationships with IT software and service
providers nationwide. This winning strategy helped IBM fuel new growth,
sell more hardware, and drive up its stock price. IBM diversified the com-
pany and its offerings from hardware sales to professional services. For the
foreseeable future, IBM is intent on aggressively growing its professional ser-
vices divisions and weaning itself from hardware sales as a major source of
revenue growth.


What Drives Strategic Service Partnering?
The trend to develop partnerships in the service industry is mostly driven by
globalization and customer demands. In the new economy, customers require
that their service providers supply a broad range of services; however, rarely
is any one vendor equipped to furnish the complete range of specialized ser-
vices that its clients require. This is particularly true of information technol-
ogy companies. IT service firms such as Accenture and smaller IT firms spend
time, energy, and dollars to create powerful strategic partnering opportunities
183
Strategic Partnering

to become the one-stop shop that their customers require. In recent years,
downsizing has been a major focus as large corporations try to maintain com-
petitiveness and solvency. Today, partnering makes more sense for large
companies so that they can maximize their labor pools and capitalize on their
partner ™s talent to fill specialized client needs.
For service firms to sustain and grow their businesses, strategic partners
are crucial to their success and viability with their customers. If a solution
provider cannot meet the total needs of the client in this highly competitive
market, it runs the risk of losing that client over time to competitors that can
provide expanded services through better strategic partners. With every
new deal that is completed between strategic partners, the relationship
builds, evolves, and leads to new business with a heightened sense of trust
and reliability among the team members. Trust among the team players is
paramount to creating a successful partnership.


Strategic Service Partnering Mind-Set
A service firm must truly embrace partnering as a core way of doing business
if that firm wants to reap the benefits, rewards, and revenue of such an op-
portunity. The service firm must promote a win-win attitude and choose its
partners wisely with growth in mind and strategic advantages in place. Oth-
erwise, strategic partnering will not lead to the desired goal that manage-
ment is expecting.
If the service provider embraces partnering, it will earn a large share of
its revenues through a variety of partnering channels and arrangements.

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