Take a Look Outside

You need to do some concentrated market research, but your current staff is swamped with other work. Do you:

A) wait for your marketing staff’s workload to get lighter?

B) decide that the research was not all that crucial in the first place?

C) hire an outside expert to conduct the all-important study?

“There’s a general tendency in the catalog industry to use in-house staff only and to avoid hiring outside expertise,” says George Ittner, president of Executive Greetings catalog, a former industry consultant and long-time catalog veteran. “But I think you can gain immense benefits from hiring that expertise. Catalogers shouldn’t look with trepidation upon the act of hiring consultants.”

Indeed, you can hire a consultant for help with any number of projects, including inventory management, warehouse layout, contact center staff training, merchandising analysis, distribution center workflow, circulation, database marketing and much more.

But how do you find the right consultants for your company and the work needed? What are the do’s and don’ts to hiring consultants? What are the usual costs? The following guidelines may help.

Where and How to Search

If the task at hand is more technical in nature — say, installation and implementation of a shipping system, or a redesign of your warehouse layout — send formal Requests for Proposals (RFPs). An RFP is a process of soliciting proposals from consultants who may be both interested in and appropriate for the work. It’s a good way to make an apples-to-apples comparison among consultants offering similar technical services.

An RFP should include information about your company, the project at hand and your expected outcome. Establish a general format for the RFPs so that when the completed forms are returned, you can compare consultants in an equitable and efficient manner.

If your project isn’t primarily technical, then finding a consultant with the exact expertise you seek — say, creative redesign for a business-to-business catalog — may require a bit more legwork on your part. Try the following:
- ask your cataloging colleagues for referrals;
- visit trade shows to hear consultant speakers and/or meet them in the exhibit halls;
- peruse industry trade journals (such as this one); or
- check out online directories.

Focus your search on consultants who have hands-on experience in the area in which you need assistance, a good reputation in the field and category expertise, says George Mollo, president of GJM Associates, a Nanuet, NY-based consultancy specializing in merchandising operations. Mollo ties together merchandising analysis, planning and inventory management with marketing and creative.

“Usually all of these areas are silos within a catalog company, but I’m able to bring them together for a more holistic approach,” says Mollo, an industry veteran who spent many years in management roles at Lillian Vernon, J. Crew and other catalog companies.

John Kinsella, a Petaluma, CA-based consultant who specializes in strategic catalog planning, operations and marketing, agrees that you should look for consultants who have real-life cataloging experience. In this way, he says, the consultant can provide more value-added services. “Often catalogers ask for help in one area, but they really need help in something else on the boundaries of that problem,” says Kinsella who previously held management positions at Illuminations.com, Smith & Hawken and Williams-Sonoma.

“For example, a cataloger may say they need freight auditing assistance, but they also may need help with a merchandising strategy,” Kinsella continues. A consultant with hands-on cataloging experience, he notes, undoubtedly can offer a comprehensive analysis of your operations and practical solutions for improvement.

Benefits to Your Catalog

Ittner says in 2002, when he was working for another catalog, he hired an inventory planning specialist who worked with the company for eight weeks. “The consultant confirmed that our own internal procedures were valid, while also helping us tighten those procedures and decide on timing of rebuys,” he recalls.

In addition to helping you solve primary and secondary problems, consultants can help educate your staff. Says Kinsella: “I subscribe to the theory not to just give fish to a hungry person but to teach him how to fish. I like to educate and train staffers so they don’t need me anymore. I want to help them devise long-term improvement strategies. A quick fix is not a long-term strategy.”

Mollo agrees, adding: “By hiring a consultant, you get long-term gains for a low-cost investment.”

For example, Mollo says he can put in place an inventory management process in a catalog, and that process enables the company “to avoid hiring someone with a six-figure salary. They can hire someone at a lower base salary, because we’ve put the systems in place already. The new staffer simply has to follow the plan.”

A consultant also can help you improve your multichannel operations. For example, says Kinsella, “If a merchant has a Web presence and wants to start a catalog, I can leverage the strengths that company has in online commerce and bring catalog industry best practices to them. Such practices would take them years to figure out on their own.”

Next Steps

Both Mollo and Kinsella recommend that you interview consultants before hiring them. Develop a screening process similar to that used when hiring employees. Will the consultant fit well in your organization? Are the consultant’s techniques and expertise appropriate for the job? You can interview consultants both in person or via the telephone.

And unless you know the consultant well, definitely check references — catalogers who’ve used this consultant in the past. If possible, get a list of the consultant’s clients and randomly call a few — often a better tactic than calling just the one or two clients the consultant recommends.

When checking references, ask about the consultant’s ability to diagnose problems, implement solutions and facilitate adequate commitment and consensus from your staffers who will work with the consultant.

Once you’ve settled on a consultant, draw up with the consultant a detailed letter of agreement. Says Kinsella: “I do agreement letters in excruciating detail. It should be a proposal that articulates what the consultant will do exactly; with whom he or she will work; how long the job should take; when the consultant will get paid; and how much it will cost the cataloger.”

Mollo adds that the letter should state exactly what deliverables you expect from the consultant. “Define the scope of the project, and understand that there frequently is ‘scope creep.’ That is, you’ve brought in a consultant to do one task, and before anyone realizes it, the job has moved beyond its original scope.” Having the objective clearly stated in the RFP or the agreement letter, then, can help keep a lid on scope creep, Mollo notes.

Caveats

While the benefits of utilizing a consultant can be significant, you still must be cautious about whom you hire and under what conditions.

“If there’s a lack of clarity about what needs to be accomplished,” says Ittner, “you could get caught in an open-ended agreement. A consultant’s agreement can be renegotiated if needed and mutually agreed upon.”

Understand also that Rome was not built in a day. Says Kinsella, “I once worked with a cataloger who wanted to reduce backorders, and we reduced them by 80 percent. But it took six months to do it. We had to touch not just forecasting, but also vendor relations, supply chain management and everything else in the continuum. You have to give the consultant enough time to affect all of that change.”

Additionally, beware of consultants who aren’t objective. “After doing some analysis, the consultant may tell you that what you’re doing really is the best procedure,” says Mollo. “But the reason for that advice shouldn’t be just to tell you what you want to hear.”

Finally, be wary of consultants who charge very little for their services. “A good consultant has to charge for services. The lowest-cost solution may not be the best,” says Kinsella.

Costs

As to be expected, costs for such services are dependent upon the nature of the job, its length, necessary travel, etc. It’s helpful to have an idea of your boundaries regarding costs before you begin the negotiation process.

In general, consultants charge by the day (per diem) or by the project. Kinsella offers an example: For catalogers who are scoping out services, he’ll go in for a three- or four-day assessment of company operations, interview employees, and look at their processes and systems. For such a service, he’ll charge a day rate.

He’ll then head back to his office and devise a checklist of services he thinks that cataloger needs. “It’s almost like a grocery list,” he notes. “They sign up for as much as they want.” Once the cataloger has selected the services needed, Kinsella devises a timeline for the tasks and negotiates a project rate.

He also works on retainer for some catalogers. “They’ll book me for x number of days per month for the duration of our agreement,” he explains. “This way they get their money’s worth from me every month.”

Mollo says that a consultant’s reimbursable expenses should encompass normal out-of-pocket expenses such as airfare, hotel and meals.

Says Ittner, “We’re lucky that we’re in an industry where a lot of the skills necessary to be successful are readily available. There’s a range of very qualified people who can help and really add value to your organization.”

George Mollo can be contacted at (845) 627-0788.

John Kinsella can be contacted at (707) 776-4665.