Mark Bruneau - Selling intangibles - Wins and sins

Professional Services Start-up That ScaleStart-up Festival

Montréal July 11, 2014

1. Defining Intangibles

2. Scaling Services

3. Wins & Sins — A Personal Journey

Mark BruneauFounder & CEO of ADVENTIS and VELOCENT

Selling Intangibles: Wins and Sins

1. What does “Intangible” mean?

2. Building A Scale Services Business

3. Services Start-Ups Wins & Sins

Mark BruneauStart-Up Festival, July 11, 2014

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1.1 Defining Intangibles

Selling intangibles…

Can be:• Imagined• Infered

Need to be:• Touched• Seen• Quantified

Use active listening & incisive language to shape a vivid picture of the Journey and its outcomes

… Requires a bridge from ideas to concrete results

Measurable outcomes• Market share• Enterprise value• Competitivity

Superiority

Intangibles Tangibles IDEAS RESULTS

• Overcoming Doubts• Make Them Believe

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1.2 Language that Surfaces Issues & Opportunities

“I did not sculpt David — I removed the excess stone that released him” - Michelangelo

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Active Listening

1. Invest in developing deep understanding of the client business, industry, and possible issues & opportunities

2. You want to sell more? “Stop talking” — don’t think about what to say next — Listen to infer coded needs

3. Develop real-time hypotheses and use investigative questions to test them

4. Synthesize, summarize, and paraphrase in real-time

Client Confidence

1. “I respect you, you’ve taken time to learn about me, my company, my industry”

2. Earn the legitimacy to ask deep questions

3. “This consultant can help me sound GOOD” — “You express my issues & opportunities more incisively than I can ever after 10 years”

4. “I will enjoy the process of working with this smart person”

1.3 Less is More

“You don’t sell intangibles by talking about them, but by demonstrating just what it feels like to work together.”

Charles H Green

“When your work speaks for itself, don’t interrupt”

“Consider both interpersonal chemistry and strategic needs to determine which relationships to cultivate”

Don Moyer, Harvard Business Review

Henry J Kaiser

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1.4 First Be an Expert — Then Be a Friend

• Most CEO’s are lonely:‐ In the pursuit of power and wealth many have lost

family, friends, a personal life…

• Most CEO’s are mis-informed and are told by their senior executives highly varnished truths

• Over time, through trust, empathy, and external comparative knowledge — be a friend:‐ Truthful‐ Empathic‐ Helpfuland they will keep you around a long time!

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2.1 Understanding the Leverage Model

Finders1

Minders5

Grinders25

Leverage Consulting Model

Cost & Value

• Rain Makers‐ Rare‐ Prima-donna

• Extract maximum value from teams

• Rigorous research & analyses

Early stage: "highly customizable" work performed by skilled professionals - no standardization and reproducibility. Low leverage model: After 2-3 years, a few senior people sell their expensive time at expensive rates. Limited growth potential. High leverage model: Bill out junior people at high utilization. Profit drivers:• High utilization rates• Allows finders to secure new projects.

Key enablers of high leverage:• “Lead" the market in a particular

industry sector or functional area• convert learnings into reproducible,

standardized modules

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Productable

Teachable

Deliverable

Highly Customizable

Services“Guru”

Standardized &

Reproducible Services

Standardization EngineProduct Marketing

“Products” for Clients

“Training” for Staff

“Delivery Set-Up”for Organization

LearningsLearnings

Learnings

Cost Low

Geographic Expandability

High

HighLow

Client Value Proposition HighHigh

Scale allows lower cost, speedier delivery and a deeper network

Sub-Scale At-Scale

2.2 Why Scale & Leverage Matter:

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2.3 From “Guru” to a Sales Generating Machine

Get Published

• Identify trade publications• Get to know the editors• Learn what they want• Submit articles

Get Referred

• Do great work• Refer others• Consistently connect • Ask for referrals

Be the Authority

• Identify your special knowledge• Master public speaking• Develop list of opportunities

Be Connected

• 2 Industry events per month• Be very curious• Be very helpful• Reconnect with those you meet

Engage in Social Networking

• Blog• eNewsletter• LinkedIn Networking• Reconnect with those you meet

Engage in Community

• Something you truly care about• Add value• Learn the etiquette• Reconnect with those you meet

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3.1 A Personal Journey

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After Harvard Business School 1986, I joined Mercer Mgmt Consulting — after 5 years I had vaulted from “Associate” to “Senior Associate”… Too slow for me

I thought I could do it faster, sell as well as Partners I worked for — so I started my own firm — me and a box of business cards

In 5 years, we reached $10M revenues, in 10 years we reached $60M in revenues — with no debt nor line of credit

I sold the firm shortly after — for 1.25 X revenues

3.2 My Learnings — Wins & Sins

WINS+ Keep cost as variable as possible

• Part-time high caliber stringers• Well networked home offices

+ Clear value proposition, well defined industry or functional expertise

+ Scope projects narrowly and precisely — Then OVER deliver

+ Set achievably stretch revenue (objectives sold – billed – and collected) for each partners – with clearly defined functional or sub industry charter

+ Commission 2-4% on fees sold+ Hire staff slowly (after demand is

secured)+ Hire the best – Pay what it takes (test

for work ethic and cultural fit)+ In case of M&A offer generous

retention bonuses over 3 years

SINS− Over-commit to fixed costs

(people, office space, etc.)

− Generalist value proposition

− Over-promise on contract scope and deliverables – working beyond scope is never appreciated

− Unclear performance expectations by level

− Neglecting marketing and sales prospecting while delivering

− Mistaking big contract revenues as lasting forever

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Technology

Mark Bruneau - Selling intangibles - Wins and sins