Even the very best consulting businesses get stuck sometimes. The common bottlenecks in a consulting company are typically in one of three places.
- Lead generation (the constant grind of hunting down new clients)
- Client services (expanding scope creep killing the project's profit margin)
- Referrals and recurring revenue (no strategy for how to turn one project into many projects)
Most consulting firms are so busy scrambling to find work or scrambling to do work that there is little energy focused on refining their own process for delivering high level results.
Let's walk through the bottlenecks first.
Bottleneck #1: Your Target Audience is Too Broad
It doesn't matter if you are a technology consultant, marketing consultant, strategy consulting firm, or HR Consulting Firm...it's so hard to clearly explain ALL of the issues that come together inside your expertise. It's certainly hard to communicate each of the benefits specifically. Trying to talk to each of "sub elements" every time you engage someone is overwhelming, confusing, and darn near impossible.
You should stop. Focus on the audience you can help the most.
Bottleneck #2: Your Consulting Engagements are Too Custom
Your engagements are too custom. Your scope of services is already broad THEN you try to offer custom solutions for each of those services. You might fill out 100 RFPs (requests for proposals) and only get a favorable response back on two or three. Each time, you and your team exhibit heroic effort (meaning: you spend a lot of time/money) in an attempt to wow the prospective client. Then, in those few times you actually win the business, you have to continue negotiating until the client gets "everything" they want at the price you committed to in the RFP.
Not only does this approach destroy your profit margins, it is also incredibly hard to scale. It's just too custom. You should stop.
Bottleneck #3: You've Taken On Too Much Responsibility As the Leader
Your specific role as the leader is too heavy. You lead the prospecting efforts, client services efforts, and referral efforts. You are involved in every single part of the client's engagement...and it weighs you down. You aren't able to think about how to really scale your company, because you are involved with too much.
You should stop. Develop a proprietary system for how your company does business and delegate the parts that don't fit your highest and best use.
In fact, let's think together about a better model.
A better model...
Take a look at the grid below. Let's assume you've got three core solutions your offer: solution one, solution two, solution three. Then let's look at the actual business model. What has to be done so that you can deliver on each solution well?
There are three main elements. There is lead generation -- getting new leads in. There is a productized service -- your specific method for solving the problem. There is recurring and referrals -- what generates consistent revenue for your business.
Question 1: What do you do BEST?
Let's walk through these and how you might apply it. First thing is you've got to be honest with yourself as a company. What do we do best? Not what can we do, not what we plan to do, not what we thought about doing, not even what we do well. What do we do best? What is the statement we hear from clients that celebrates the BEST thing we do?
Question 2: Can you generate leads consistently?
Now that you know what the solution is you can begin to check off the boxes in the column. Lead generation becomes the very first metric to understand. If you cannot generate leads you cannot generate clients. So ask yourself, "Do we have a lead generation method specifically for this solution? Is there a way that we generate leads only for this thing?"
Let's assume you know how to get that done, then that gets a check.
Question 3: Do you have a structured way of delivering your BEST service?
Now, you must productize the service to give it predictability and dependability. Ask yourself, "Do we have a structured way of delivering this solution?" It might be four finite steps, eight finite steps, or twelve finite steps. It might take four weeks, 9 weeks, or twelve months to complete it. Time doesn't matter. What is most important is that you have very articulate phases, steps, or sections on how you deliver on that productized service.
Warning: the steps of your service might feel intuitive to you might be inclined to blow this part off. Don't do it. Take the time to spell out what you do. You will be surprised how much value is "embedded" in your service that you've forgotten about.
Let's say you've done this part already. Check that box.
Question 4: Do you have a method for recurring income or referrals?
Let's talk about Recurring and referrals. Once you've generated a very specific lead, for a very specific productized service, it is much easier to WOW your prospective client. You've focused on a specific problem in their world, promised a solution, and solved it.
Your client will respect the focus of the arrangement and will be excited to continue the relationship. How can you open the opportunity for recurring income? Simply offer check-ins or checkups on the original productized service you offered. They can be once a month, once a week or whatever makes the most sense for your business. You now a retainer arrangement in place.
Even if you do not have a recurring element, after you've wowed them with this product ties service you simply ask for a referral. Because they were wowed, it's very easy for the client to consider suggesting your name to someone else in their network.
A referral quickly puts a new lead at the top of the sales funnel. So if can see the picture unfoling, you now have a new specific lead, for a very specific service, and this begins a natural flow revenue that comes back into your business over and over.
Assess your own systems...
Since you've checked off the essential boxes on your very BEST service, is there a second service that needs to be assessed? Is there a third? The checkboxes make the assessments easy to execute.
A lighter load for you. More value to your clients.
Your lead generation is no longer sporadic. You aren't targeting "everyone" because you've focused on where your company is best. There are very specific things that you solve for. You are only interested in the clients who value what you have to offer.
Your don't have the pressure of overly customized engagements. You don't have to "shape shift" for each prospective client. Your productized service delivers specific value in a very specific way. Yes, you may tweak your process for one client or another, but the basic steps do not change.
Your load as the leader of the company is so much lighter. Here's why:
- You can hire someone in your company to specialize in lead generation. You don't have to do it now.
- Your client (productized) service can be supervised by another experienced team member. You don't have to do that now either.
- Your method for introducing retainer services or referrals is systemized. Yep, another thing you don't have to do.
Now that you have lightened your load, you can re-commit yourself to being the strategic leader of your business. Congratulations.
This IS a better model for your consulting company. Take a look at it, use it, apply it. Let me know, post a comment below, if you enjoy the framework.