Summer 2005

Volume 45, Number 6

Review of the Consulting and Independent Contracting (CIC) Special Interest Group (SIG) meeting

by Deb Lockwood

Approximately 30 people attended the June 1, 2005, CIC SIG meeting at the Tivoli in Denver, wherea panel of consulting and independent contracting experts answered questions about marketing and advertising strategies. The experts were Jeffrey Rowe of Cairowest Group LLC,* Brian Berry of Berry Technical Documentation, and Al Kemp of Impact Technical Publications. Linda Gallagher moderated and Whitney Broach captured the discussion by taking notes. This experts explained what worked for them and what consultants and independent contractors should consider as they developed their own marketing and advertising approaches.

A list of the questions and the panelists' responses follow. The questions appear in italics and the responses in normal text. The answers have been edited for the sake of brevity.

To set the context: Where is your practice based and how long have you been in business? Which industries, subject matter, and audiences best characterize your practice?

Jeffrey Rowe: His business started out as creating documentation, but then he developed the strategy of creating system requirements and performing usability testing. They all three go together. He has diverse clients with offices in Colorado and Detroit.Brian Berry: He has been an independent for 15 years, starting off using a typewriter. His office is in Steamboat Springs. Brian's background is in hardware, software, and programming. He works in numerous languages, medical equipment, making code readable, and data warehousing.Al Kemp: He has been in the documentation and technical marketing business for 17 years, and has created deliverables for sales configuration, software, hardware, and plastics extrusion for all kinds of audience.

Where are most of your clients located. Metro Denver? Colorado? USA? International?

AK: By choice, all of his clients are in the Denver metro area.
JR: His clients are in MA, IL, MI, and WI.
BB: His clients are in the Colorado Front Range; Bethlehem, Penn.; and San Antonio, Texas.

How much of your practice's revenue comes through networking leads vs. advertising leads?

BB: He does do advertising and cold calls, but 90%-95% of his work is from referrals and networking.
AK: His peer network generates about 65% and he doesn't cold call. He supports his network with targeted advertising, which generates about 20% of his work. Pure advertising is about 15%.
JR: He writes for engineering publications and various Web sites, which add up toabout 300 articles per year. This provides "free" advertising and affords constant exposure.

Which advertising works best for you, and what trends and changes are underway?

JR: He has never formally advertised. The articles he writes drive inquiries.
AK: He tried direct mail brochures, but only his network responded. Now he just sends them to those he knows. He does not recommend using direct mail brochures. His Web site generates 10% of his business, a business telephone listing generates about 7%, and a Google ad generates 1%. His network is changing and moving, and is therefore hard to track. Plus the Web is constantly changing.
BB: He does not recommend direct mail. He does do cold calls to particular industries, which generates about 5%-7%. His Web site generates about 5-7% of business. The rest is by networking. He does not recommend direct mail or Yellow Page/Directory ads.

For every 10 leads you get through advertising, how many of those convert to billable work within a year?

BB: From his Web site, 5%-7% of calls generate work but he gets some profitable referrals. His advertising conversion ratio is 5%.
AK: Direct mail is 80%, Web is 50%, and a Google ad is 5%.
JR: 3%-5% of people want free advice, but you've got to cut them off. Determine if they have money and whether theywill spend it.

What's your experience with leads from job or contract posting sites? Which have been more or less helpful?

AK: None have been helpful, not even STC or Boulder Writers Alliance (BWA). Some STC role tie-in.
JR: On Sundays he goes to the online job sites (e.g., Monster) looking for industry and geographical trends, such as Where are the jobs located? Monster.com has the best quality and quantity.
BB: He has gotten work through the job postings on our local STC chapter's Web site. He sends a brochure and follows up with a phone call.

On average, how much of a business month do you spend networking? What seasonality do you see in your business or your networking?

BB: About 2 days a month using e-mail and phone. He asks questions like the following: "How's it going?" "How are the kids?" "Why don't we do lunch?" There's no real seasonality.
JR: A day a week; no seasonality, but it's hard to do when you're busy.
AK: Two days a month. His experience has shown him that if he doesn't have a contract by November 15th, he won't get a job until the middle of January, so he must plan accordingly.

Is your networking mostly through face-to-face meetings or does it take other forms (e-mail discussion lists, presentations, speeches, etc.)?

AK: Lunch, formal networking, BWA, and meetings with various professional programmer's' associations. He has had no luck with social leisure groups.
JR: Formal is better, including trade shows, conferences, and golf. Golf has been an amazing strategy for him. Speaking in asides as people do on the course puts people at ease.
BB: Mix of formal (50%) and informal (50%). Ask questions and find out who is selling what. He likes this approach because it gets him into the business. Indirect leads are more common here, within the same company.

Which networking works the best for you: relatively formal, such as industry, trade and professional societies, or relatively informal, such as social, athletic or leisure groups? Why?

(Answered in previous question.)

What about functional or cross-functional networking: you can get a lead within the technical communication community (editor-to-writer, writer-to-artist, editor-to-translator), and you can get one cross-functionally (programmer-to-writer, product marketer-to-artist). Do you see more leads across functional lines or within them?

BB: To find out where the money is, do cross-functional by going to the programmers. At networking lunch groups, ask "How can I help your business?" Sell someone else's services and they will eventually sell yours.
AK: Functional (management) is 1/3 and cross-functional (programmers) is 2/3. It's someone else's overload.
JR: It's totally cross-functional: networking with marketing, programming, and management. Learning to find the right people is 3%-5% of it; talk in their terms, tell them what they need to hear because they appreciate this.

For every 10 leads you get through networking, how many of those convert to billable work within a year?

JR: 3%-5%
AK: 70% from networking; lower from all else.
BB: Advertising is 70% after response. (A response to the ad almost guarantees the job.) Networking is 10% with high payback. The rest are referrals.

How much is a referral worth? Under what circumstances, if any, do you compensate those who send you referrals? What do you think of compensating for referrals based on a % of the project or a fixed amount?

JR: Rare; reciprocal referrals are more important.
AK: Never pad either way. 10% seems reasonable, but maybe 15%. Compensation should be a percentage of collected revenue.
BB: Percentage never paid. He does send a thank you card with a dinner certificate or something like that for follow-up and closure. Constant marketing is valuable.

What other marketing/prospecting tools or methods have you used successfully to find projects?

Have you turned down an opportunity with a new prospect after an established client called them? What happened?

BB: He used direct mail for a while, and he regrets it. At Christmas time, he gives away little gifts to clients, and this has been a very effective strategy. He gets the items from specialty incentive stores. Coffee cups he gave one year with his logo and phone number generated 6 phone calls in 3 years, 3 of which were jobs.
AK: Quality work is a marketing tool. He will fund more quality in deliverables to get repeat business. Mediocrity kills the motion.
JR: Cold calls with a twist generated from online press releases. He reads between 100-150 press releases per day. (He uses 1,000 key words searched on each newswire every day [e.g., NPR News wire, Biz wire].) With those that generate a hit for his type of client, he calls the contact person named in the press release.

How do you handle networking and other business prospecting when you are already busy?

JR: Declined referrals to avoid a conflict of interest. Be candid with the client. Demonstrate integrity. Clients like that and they'll follow-up with you later. Remember that you don't have to like your client. But no matter what, keep your quality high.
AK: Some jobs aren't a good skills match. When they aren't, he doesn't hear from them again.
BB: Don't let referring clients perceive that you are not focused on them.

Do you have any other advice for us?

JR: Independent is better than working for someone else. He said that as you gain experience you want to remain independent. He receives 3-8 job offers a year. He has structured his business to fit his leisure. He feels more secure with a diverse resume base.
AK: He says he is not a good marketer.
BB: He thought he had to do marketing separately, but it's a continuum. Never stop marketing. Carry your business cards everywhere; even on the ski lift.

Do you have employees working for you?

JR: He has never had employees, only subcontractors. For each job, he forms a team for the project and then disbands the team when the job is complete.
AK: Never had employees, only subcontractors, and then mostly technical illustrators. He makes sure that the illustrators are great. He has subcontracted for others.
BB: He uses subcontractors (1099 situation) including programmers and illustrators, but no employees. Employee rules and laws are too scary.

Do you work on site or off site?

BB: Some clients want a little more visibility, so he can work on-site a few times, but not on-site permanently. He sees his clients on a regular basis, however. Tell the clients your preference. He has turned down jobs because of this issue.
AK: He always visits but off-site makes better political sense. If they want you on-site, they really want an employee.
JR: He goes on-site at first to build comfort, but then he works from home until they see him again for the project hand-off.

How is your company set up?

JR: LLC because it is less complex than a corporation.
AK: Sole proprietor.
BB: LLC now (newly formed LLC, and was previously a sole proprietor).

How often do you contact your clients?

JR: Contacts some clients monthly asking how the company is doing and checking to see how the last project went.
AK: He said less than he should. Two to four times a year for informal social networking is average.
BB: At minimum, one time a year. Christmas is ideal to talk to the client about what's going on in the new year.

What do you pay your subcontractors?

JR: Set up an hourly rate and pass it through from the company.
AK: Because he often does fixed bids, he sets the rate by the bid; essentially hourly. The markup for him to manage the projects is $5 or so.
BB: Most projects are fixed bid, so he pays the subcontractors hourly. He doesn't report the subcontractors' pay to the clients. He makes 5%-10% for project management to cover insurance and time.

What types of professionals are in your support network?

BB: An accountant, but he keeps his own books. He has peers and mentors through STC that he uses to kick around technical problems.
AK: An accountant, an attorney, a marketing expert, and a FrameMaker guru.
JR: An attorney and accountant. He keeps his own expense records to project cash flow. Mentors are essential.

*As of the end of June, Rowe was revamping his company's Web site, thus making it unavailable. He said that it should be back up again shortly.