This article discusses the opportunities consulting firms have to generate consistently high growth by leveraging lead generation services.
Growth Opportunities for Mid-Size Consulting Firms
It’s no surprise there are so many players in the consulting industry. The United States alone has nearly half the world’s market share of consulting firms with just under 700,000 consulting entities generating $64 billion in revenue. Although the Big Four own about 35% of the market (click to open PDF) there is hope for smaller growth-minded firms to expand rapidly by leveraging lead generation services.
According to this study (click to open PDF) by strategic public relations firm Greentarget, the most successful mid-size consulting firms continue to increase their market share by focusing on specialization and differentiation. A major selling point is easy access to their most experienced senior consultants. Clients prefer this because it makes the business relationship more personal and efficient.
Although it may look easy, it can take years for a consulting firm to establish a unique brand identity. The broad market reputation large firms enjoy makes new client acquisition easier for them. But this wide brand recognition doesn’t usually exist for smaller firms, particularly those less than 5 years old. This puts a premium on self-generated (i.e. outbound) sales activity for small- and mid-size consulting firms.
A Nasty Growth Trap for Consulting Firms (and What To Do)
The challenge every small- and mid-sized consulting firm faces is this: You can’t sell when you’re billing hours and you can’t bill hours when you’re selling. Cash flows are great when your bench is fully employed on client projects, but most senior consultants then cannot afford to take time away to get out and build more business.
Lead generation in consulting firms frequently suffers. The lack of dedicated business development resources results in inconsistent sales activity. It’s a classic “feast or famine” problem.
Many firms also struggle to maintain strong client relationships once they enter high-growth mode. The partners get pulled in too many directions, and projects can quickly spiral out of control.
It’s critical for growth-minded consulting firms to establish a systematic lead generation approach to engage more prospective clients and set up initial discovery meetings with your partners. This can be done using dedicated trained lead generation specialists while creating market differentiation and value through the initial outreach and engagement stages.
The goal should be to get your top consultants involved with prospective clients early without forcing them to do lead generation. Consultants are typically very bad at lead generation in the first place, making the opportunity cost of pulling them off of billable work substantial. Without a consistent led generation process (and personnel) in place, sales activity becomes sporadic. The rate of new client acquisition naturally slows down. Growth suffers.
A lead generation system that feeds new client discovery meetings to your senior consultants creates an opportunity to build authority and relationships, and to close more deals based on expertise.
There is a natural tug-of-war between client delivery and sales in a consulting business. The only way to overcome it and grow quickly is to implement a well-defined lead generation program in place to “tee up” your partners and senior consultants with new conversations.
Common Barriers to Growth for Consulting Firms
According to Hinge Research’s 2018 High Growth Study: Consulting Firm Edition, there are five top threats most consulting companies expect to endure in the next 3-5 years:
These threats are not new — they go back decades in the consulting industry. The highest-growth consulting firms understand these challenges and institute repeatable processes to keep them at bay.
Now, let’s take a look at some common practices within consulting firms that make growth even more difficult.
Common Practices That Hinder Client Growth
If you manage a consulting firm, the promise of lucrative client relationships will always keep new competitors knocking on the doors of your clients.
However, small firms tend to have a structural disadvantage when responding to competitive and growth pressures. This leads to an “ad hoc” approach to growth planning which exhibits these symptoms:
- Over-reliance on your early successes to take your company to the next level. Many young firms generate their first clients by referral, handshake, or partner acquisitions. A few of these clients turn into steady business for years. This creates a false sense of market control and leads to “sales channel blindness”. Successful high growth consulting firms incorporate multiple non-traditional sales channels into their sales lead generation mix to generate high-quality leads in a repeatable manner. This ultimately helps them to beat out the competition and grow in tight markets. We’ll cover how they accomplish this later on in the article.
- Over-reliance on partners to bring in new clients. Heavy reliance on the firm’s partners to generate new client relationships is very risky because the departure of a big partner will immediately impact both internal operations and the bottom line. The search for a new partner to replace lost business can take years. (It should also be note that founding partners may bring in a few key relationships, but this does not mean they are necessarily good at new client acquisition starting from scratch.)
- Constantly “hustling up business” while trying to deliver services. Most small consulting firms find themselves in this quandary especially when they are focused on traditional in-person networking tactics to generate new clients. It is difficult for consultants to bill clients when they are prospecting. It often results in sales dead ends and higher operational costs. Inconsistent prospecting results in inconsistent leads. Splitting the time of your highest billing consultants between delivery and sales rarely generates optimum sales results or the highest quality service delivery.
- Experiencing a plateau after initial success. Consulting firms whose growth slows eventually lose key partners and clients, which leads to a cycle of replacement and a long business plateau. Companies prolong this when they panic and resort to old school sales techniques because they lack a repeatable lead generation process. High-growth companies not only have established processes, but include non-traditional channels such as lead generation services whose sole job is to proactively drive qualified prospects into discovery meetings.
Common Growth Responses
When small consulting firms go into panic mode to address flat or negative growth, they usually fail to fix the underlying sales process. They fail to understand the role of lead generation and collaboration between sales and consultants.
Here are two common reactions to slowing growth and some things to consider:
- Build a small sales team to generate leads and close business. This is possible, but consulting is an authority business. Many firms bring in sales staff without any sort of account structure, sales kit, sales support / leadership team, CRM pipeline stages, or even clear service descriptions. The sales team must be properly resourced, trained (it takes years to become an industry expert), and given adequate time to find their feet at your firm. Otherwise, they’ll just sink or swim in a knowledge-based industry.
- Pair Salespeople with Consultants. Salespeople know how to sell, but ultimately they must interface with potential clients and involve an authoritative expert such as a senior consultant or partner in discovery meetings, demos, and other presentations. Likewise, consultants don’t normally have deep experience in sales, and must facilitate the salesperson’s role by providing supporting knowledge and credibility. If this is not well-understood, and the two parties do not have a clear game plan on how to work together, it can put your firm’s credibility and messaging at risk.
How Leading Consulting Firms Overcome Growth Barriers
Hinge Research’s market study (click to open PDF) reveals four top strategies that growing firms institute to keep ahead of threats. These constitute major differences compared to their non-growth counterparts:
Aside from employing more technology, high-growth companies systematically use non-traditional strategies to keep their brands visible and differentiated.
One Solution: Systematic Lead Generation for Consulting Firms
Systematic lead generation is a key element of the growth formula for consulting firms.
The role of lead generation in a consulting firm is to drive qualified prospects to your partners on a consistent basis. Sales development representatives generate new interested client leads, orchestrate technical discussions, demos, and in-person meetings, but leave the expert consultants to lead them. Salespeople add more value by owning, focusing on, and driving lead generation.
Senior executives should rarely be involved with lead generation. Canvassing the market, doing outreach, and generating initial discovery call appointments is the domain of trained lead generation specialists using sophisticated tools and research sources. Consulting executives need specialized lead generation support to get them into more qualified discovery meetings, which they turn into new business with their knowledge and expertise. If they are involved, it typically is done inconsistently and interrupts high-value client business.
Inconsistent lead generation will result in missed opportunities. A repeatable lead generation approach is more dependable, cheaper, and leads to shorter sales cycles. It’s a key growth strategy that consistently moves the dial for the business.
How Lead Generation Services Drive Consulting Firm Growth
Hinge Research’s groundbreaking study highlights the potential of lead generation services as part of an upgraded consulting firm sales strategy:
- They expose your firm’s knowledge, brand and expertise to the marketplace. This is done on a consistent and repeatable basis, which is a top practice among high-growth consulting firms.
- Your firm engages prospects with top quality content in highly-targeted campaigns. This captures more qualified sales leads and results in higher sales conversion rates. Every prospect is researched and identified as a high-value target at the front of the process. It’s quality over quantity.
- Campaigns use multiple outbound sales channels to reach prospects and dedicated specialists to manage the process.
Two-Stage Lead Generation Plan
Stage 1: Content and Knowledge Sharing
An effective lead generation service for consulting firms designs, creates, and shares content and knowledge material that educates potential clients. This content must be unbiased and deliver high-value information. As a consulting organization, it is important that you represent your company with authority and ensure that your best information is pushed out to the right prospects.
Following are just a few examples of content pieces that can be developed and shared as part of a targeted client acquisition campaign:
- Blog posts
- White papers
- Small event invitations (networking, speaking events, etc.)
- Email & LinkedIn campaigns
Stage 2: Sales Development Team Follow-Up
Once the team generates qualified leads, the sales discovery and client qualification process begins. This process is focused on engaging potential clients in friendly conversations, and inquiring about their interest, challenges, capacity to purchase a solution, and timing.
Once a qualified potential client is found, an appropriate meeting or presentation is arranged by the sales executive and your partners and/or senior subject matter experts. Sales “hands off” the prospect to your consulting team to progress the relationship. Often, the sales executive will guide the process so partners and consultants follow up in a timely manner, ask the right questions, and receive negotiation support.
This process generates more sales for your existing consulting team with a much shortened sales cycle. Your consultants can spend more time focusing on billable client work, generating higher productivity, while achieving the client growth you are looking for.
FunnelProfit delivers onshore B2B Lead Generation Services that leverage high-quality content and multiple outbound channels. We guarantee delivery of qualified sales leads for your team while conducting business with integrity and quality. You can learn more about our lead generation services by scheduling a call with one of our experts here.