Posted , in Differentiation
Cross-selling: Could consulting firms learn from IKEA?
My husband, a mild-mannered but physically imposing man, once ripped up an IKEA catalogue in front of the store’s checkout assistant.
To be fair, we’d been waiting in the queue for two hours, having inadvertently visited the store on a morning when it started a major sale, but in our defence I’d plead that only a small number of the checkouts were manned, and that it was a long time since we’d had breakfast. We’d done the usual things—eyeing up the shelves of lingonberry jam, discussing whether that pot plant was just what was needed for the study, wondering why Swedish is the language it is. But two hours was still two hours, and by the time we started to load our heavy boxes on to a conveyor belt clearly designed for professional weightlifters, my husband had clearly had enough. “There’s no way we’re ever going to shop in Ikea again*,” he said, letting rip literally and figuratively.
You’re probably thinking that this doesn’t have much to do with consultants. Premium consulting, all expensive suits and business travel, seems a world away from cheerful flat packs, but pause for a moment. IKEA, we all know, isn’t really selling furniture, but the possibility that we could, for a fairly modest price, transform our home (and, ergo, our lives) into a relaxed, hygge-filled, Scandi experience. Similarly, consultants aren’t selling supply chain management, but an opportunity to have a world-class, seamlessly smooth fulfilment process. In fact, consultants are only just beginning to wake up to something that IKEA grasped decades ago, the idea that customers/clients are more likely to buy if you can make your vision tangible. Why else do IKEA stores force us to walk through a warehouse of fake rooms? With experience and innovation centres now popping up right across the world, it’s clear that consulting firms are now trying something similar (it may even explain why so many of them look so very Nordic).
But the other thing those rooms do is link products together. Like the sofa, why not buy the matching curtains? Why buy a table, when you can buy an entire roomful of carefully coordinated items? In other words, IKEA is doing what every medium-sized firm upwards would like to do: cross-sell. The challenge consulting firms face is that consulting services aren’t readily accessorised with each other in the way that IKEA products are (you can’t put them up with a screwdriver either, but that’s by the by). Experience centres are great at providing a space in which you can bring people with different skill sets together and let them develop new ideas, but there’s a danger that that’s all it is—an experience, at a time when clients want something more. Even the shiny new app you’ve developed under a client’s nose, as proof of how you can bring different types of expertise together, can tarnish when faced with the gritty reality of most client organisations. Without that tangibility, there’s a danger that clients may end up doing the equivalent of ripping up the catalogue.
Past research has told us that clients are quite comfortable with the notion of cross-selling, and largely believe that a consulting firm that’s done a good piece of work in one area may be well equipped to do equally good work elsewhere. The only caveat to this is that they want the price point for the new services to be comparable with that of the old service, which makes it hard for consulting firms to use the new services as a way to move up the value chain. More recently, it’s become clear not only that clients would like to buy more services from a smaller number of firms, but also that they want greater transparency around how firms link their services together in practice. IKEA’s operating model is clear for all of us to see, even if we don’t always like it, but the consulting industry’s? Despite its name, cross-selling can’t be just something that happens in the sales process, it’s something that has to deliver, and be seen to deliver, at every stage of a consulting engagement. Consulting firms have gone far by keeping their inside, well, inside, but that approach isn’t going to work in the future.
*For the record, we still shop there. Where else would we get our lingonberry jam?