Consultant or Vendor? Pick only one!

Consultants and vendors both bring expertise to the marketplace. But they operate very differently in that marketplace. Vendors typically offer thoroughly designed and tested products. It might be a course in time management or project management or a one-day team building retreat. Maybe it is a “package” of marketing materials for a new product launch. Or it might be a 3-session package on presentation skills.

Role of a Vendor

The biggest advantage of being a vendor is the ease of marketing and contracting. You can highlight a concrete event or service. You can point to numerous previous successes and amass an impressive list of endorsements. Since you have a well-defined product, so you can offer a fixed price. The only variables are “how many do you want?” and “when and where do you want it?” You can realize higher profits since your development time is spread over multiple deliveries.

But the downside is that your work is bounded, both in scope and cost. The contract negotiation often feels more like you are being hired as a contract worker more than as an expert. You are given a single point of contact…and expected to only work with them. If the client’s real need is different than they imagined, you have little wiggle room to let the project evolve as needed. So you teach your one-day course on time management and all the attendees complain bitterly about the always shifting priorities that come down from upper management. But coaching executives on priority setting was not in your contract!

You are also more vulnerable to commodity pricing. Have you ever been asked to trim your price because the client has an alternate source who is somewhat cheaper?

Role of a Consultant

Consultants also work from their expertise, but their offering is more diffuse. The work of the project typically emerges from the interaction with the client after the contract is signed. There is the possibility of a more intriguing and rewarding engagement if you can explore the client’s situation with them and craft a novel intervention. The project could easily expand outward into related areas. In fact, there is an expectation that novel elements to be addressed will eventually surface. You can expect more open access to different layers in the organization.

But the downside is that your budget estimate is easily off by ±50%, which will make most purchasing agents foam at the mouth a little.

It is not better to be a consultant or to be a vendor. It is always better, however, to be clear which you are for a particular engagement. And it is also always better if you and your client have the same understanding of your role. In general, never be a vendor when the client needs a consultant; never be a consultant when the client needs a vendor.

Comparison

So, in summary:

  • The vendor offers well-polished answers; the consultant asks insightful questions.
  • The vendor takes the client’s request as a given; the consultant takes it as symptomatic.
  • The vendor’s delivery is planned around schedule and scope; the consultant’s delivery is orchestrated and defined by the emerging understanding of the issues.
  • The vendor is responsible for delivery as promised; the consultant is responsible for achieving the desired impact (which includes making the client even more responsible for impact).
  • The vendor’s contract is to deliver defined products and services; the consultant’s contract is for discovery and understanding, followed by design and implementation.

So do we really have to pick only one?! Of course not; I lied a little. Your work could be a mix. But we need to be is razor sharp in the distinction. We need to know when to act like a vendor and when to act like a consultant, and especially when it is a little bit of both. We need to communicate the different rules of engagement to the client, even if they do not understand the difference.

Jerry Talley will speak further about this topic at the March 2018 General Meeting. March 15, 5:30 to 8:30 at Michaels at Shoreline.  For more information and tickets.

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