Let’s say Ann Oying, CEO of Cheapo Enterprises asks you for consulting help because she and her team are mired in misery and they don’t know the path out. But you do. You develop a comprehensive proposal for Ann, outlining the route to Nirvana.
During the follow-up call, Ann informs you that, having reviewed your proposal, her team now feels they can reach Nirvana on their own. And besides, she showed your presentation to Copycat Consulting and they said they could do the same project for $40,000 less. No sale.
Grrr. Doesn’t that burn you up? You know Cheapo learned how to solve their problem from your proposal and now a competitor knows your magic formula. What’s your response? Do you: a) tell Ann you deserve to be compensated for handing her the remedy to her woes, b) vow never to write such a detailed proposal again, and/or c) cancel the Chocolate-a-Month subscription you gave Ann last year?
It’s easy to get tangled up in concerns about IP. As consultants, our value is our ideas and if someone can easily rip them off, our livelihood could disappear faster than an unchained bicycle in Manhattan.
There are three times you (can) expose your IP to the larcenous world around you. Let’s talk about how to handle each.
How Much IP to Share:
In Your Visibility-Building Efforts (a.k.a. Marketing)
Virtually no amount of detail, information and ideas you give away in your marketing will hurt your consulting business. On the flip side, the more ideas you expose to the world, the more business you’ll attract.
There’s a gaping chasm between a general idea and the implementation of that idea in a specific situation. Smart clients know the difference and that’s why they hire you. Not only do you understand the ideas, you know how to use the ideas in the real world to solve real problems.
A company that believes they can achieve their aspirations on their own after reading your book or article or watching your presentation is never going to hand you $50k or $500k anyway.
In Your Proposals
Similarly, it is virtually impossible to lose a client by giving away your approach. You didn’t lose the Cheapo project by sharing too much. If you hadn’t submitted the proposal, they would have learned the path to Nirvana by conducting a simple search online or reading a few books. If it was that easy to dissuade them from hiring you, they weren’t a good prospect to begin with.
On the other hand, don’t give away the solution in your proposals. Generate confidence that your approach will solve the problem if they hire you. The distinction between approach and solution is critical. I’ll happily give away approaches and general direction, but specific solutions require substantial fees.
Finally, it doesn’t hurt to add a copyright statement at the bottom of your proposals and Context Documents. It may not stop sharing of your ideas, but it at least makes the client think twice.
In Your Deliverables
When it comes to the spiffy answer you hand to your client, there’s some wiggle room. First, in most cases, unless your contract specifies otherwise, the client owns the output of your work and can do whatever they want with it. They don’t have full rights to your processes, approaches and methodologies, even if you spell out those methods in your presentations.
It’s totally legitimate to have a black box as part of your approach. In other words, you don’t need to share every technique and trick you use to deliver high value. But, you definitely want to share the framework.
Overall, keep the following principles in mind:
- Your goal is for prospects to completely understand your concepts and frameworks and simultaneously realize they can’t implement the ideas themselves. The more you share, the more you’ll accomplish that goal.
- Don’t worry about competition pilfering your ideas. You’re better at implementation if you came up with the idea, there’s plenty of business to go around, and it’s just not worth the aggravation.
- Be realistic. Just because you espouse a good idea doesn’t mean that good idea is yours, even if you’ve coined a term for it. Give others credit for being smart too, and promote your best ideas unselfishly.
So, how much IP should you share? All of it. In our consulting world, a hidden asset is of little value.
Text and images are © 2023 David A. Fields, all rights reserved.
Great article as always David…completely agree that anyone who thinks they can implement based on what you’ve shared in marketing or proposals wasn’t going to buy anyway.When this happens, it means you haven’t built enough trust or uncovered enough need or want. Anyone that goes the DIY route either hasn’t considered how much longer it will take – and the real cost of that delay. Or it isn’t that important to them so if it takes a litte longer – no biggie
Maybe you could expound on what you view as the difference between “approach” and “solution”
Good question, Mike. Your approach explains how you’ll arrive at the solution, but it doesn’t relieve the client’s pain (or achieve their aspiration). If you were proposing to improve a client’s innovation function, you might suggest that an audit of previous projects is necessary and that restructuring the group is often required; however, you wouldn’t predict the outcomes of that audit or suggest how the group would be restructured in your proposal.
Does that help?
Yes, when I get my “geek + teacher” on I too often haven given away everything in the initial consultation.
This is of greatest value to me: “Your goal is for prospects to completely understand your concepts and frameworks and simultaneously realize they can’t implement the ideas themselves.”
One of our best clients is a career CFO/finance professional himself, and he is now assuming a CEO role so it doesn’t make sense for him to lead or perform the financial function but relate to it from the CEO role. So our task during the sales process was to instill trust that we will perform finance & accounting work as he would have done it, had there been a zillion hours in a day.
So we could talk and write freely about our knowledge, methods, etc.
If all of our prospective clients were like this one!
Jaime, instilling trust is, as you point out in your example, what it’s all about. When you don’t hide your processes you create an opportunity build credibility. It’s pretty tough to give away so much in an initial consultation that a client who would otherwise pay you a large fee, opts not to hire you. As you know, if a prospect can get everything they need from an hour session with you, odds are they wouldn’t be paying you six figures for that advice. Thank you for sharing your experience.