A new year provides consulting firms with an excellent opportunity to review their client work from the past year and consider how they can adjust their business development strategy to continue to grow.
Trend #1: Consulting business development is based on educating the target audience.
The term "thought leadership" is too often used to refer to content created by a company or its employees. So what do decision makers look for in thought leadership content? It's really quite simple. They're looking for answers to questions that keep them up at night. Decision makers are looking for evidence that a solution to a problem has worked - in other words, case studies. According to one study, this is the most important criterion for B2B thought leadership. Depth of knowledge about the problem and its solution ranks second, and the most effective way for consulting firms to communicate their capabilities to potential clients is to consistently create educational content that gets to the heart of their target audience's problems.
This content - in the form of blog articles, case studies, lectures, webinars, podcasts, email campaigns, LinkedIn posts, etc. - should offer the kind of insights that only someone with deep expertise can uncover. Moreover, this leadership content should inspire action. They should inspire readers - the target audience - to change their painful status quo and reach new business horizons.
Trend #2: Consulting firms that leverage digital new client acquisition will grow faster
Digital marketing in consulting will continue to grow in importance. This is not just a trend. It's the reality we all live in - as consumers and as B2B buyers. The sooner consulting firms accept and embrace this, the sooner they can build a digital footprint that delivers business results.
I always remind consulting firms of the 90-80 rule. Nine out of ten buyers of services actively research a consulting firm and its consultants themselves. Unfortunately, eight out of ten firms are automatically rejected because their digital footprint is not indicative of the level of expertise they are looking for.
The top three methods for finding consulting firms are:
Asking colleagues for a recommendation;
Doing a general search on the Internet;
Listening to an expert talk on a particular topic.
And what does the general web search often start with? That's right, with decision makers Googling their problem. Consulting firms that fail to regularly produce relevant, authoritative, and narrowly focused content are ignored by Google's algorithm.
If consulting firms are serious about growing their consulting business and attracting ideal clients in a more consistent and predictable way, they need to embrace digital marketing and business development. We are living in a new consulting world where digital is paramount (as opposed to network). And that's not going to change.
Trend #3: Consulting firms with weak positioning are less profitable.
The problem with discounts is that this practice devalues a consulting firm's expertise and educates potential and former clients to expect it. What do consulting firms that offer discounts have in common? Weak positioning. Positioning is a firm's place in a market. It is a statement, the way it is perceived in the market, and the parameters the consulting firm sets for its own work and collaboration with its clients.
Symptoms of poor positioning includes things like:
- Problems with constant client objections
- Accepting every new project just to fill up the pipeline
- Constantly dealing with lower management and needing a lot of approvals before they can tackle a client project
- Failure to deliver transformative case studies
- And much more
When weak, there is a disconnect between what the consulting firm does, how it markets its services, and to whom it markets those services. Competition is fierce. Consulting firms that cannot differentiate themselves through laser-sharp positioning have no choice but to compete on price.
On the other hand, strong positioning makes it immediately clear to potential clients whether a consulting firm is suitable for their needs.
What is the secret of highly successful consulting firms? It is their unwavering commitment to their strong positioning. They know exactly what they are good at, who will benefit from their services, and how to showcase their expertise and ability to deliver results.
What is the secret of highly successful consulting firms? It is their unwavering commitment to their strong positioning. They know exactly what they are good at, who will benefit from their services, and how to showcase their expertise and ability to deliver results.
Trend #4: Buyer behaviors, habits and expectations are changing.
Decision makers who use consulting services are becoming more like B2C buyers. They Google questions about their problems, consume content to better understand improvement opportunities, and read the "social proof" (reviews in B2C, case studies in B2B). They are looking specifically for solutions to very specific problems. They expect to be able to find all the information they need online.
As mentioned in the first trend, they turn to peers and colleagues for recommendations. They conduct independent online research. They listen to expert lectures or podcasts and draw conclusions about the competence and general trustworthiness of a consulting firm.
Consulting firms that do not adapt to this change in behavior and client expectations will invest less and less in marketing and business development.
Here are just a few examples:
A firm that shares educational, solution-oriented, and actionable content on LinkedIn is more likely to be noticed by a greater number of stakeholders in the prospective client's organization than a firm that mindlessly cold-calls and sends emails to said prospects.
A company that writes case studies highlighting results and how those results were achieved will build more trust with its audience than a company that just brags about numbers.
A company that shows up on the first page of Google for relevant search terms will generate significantly more leads than one that shows up on page 10.
Trend #5: We've entered an era of deep specialization
All major companies in all major industries are suffering from ever-increasing complexity combined with a critical shortage of required in-house expertise and no immediate availability of these experts in a tight labor market.
Business challenges have never been greater (to name a few):
Digital disruption threats
Post-covid supply chain confusion
Cybersecurity headaches
The exigencies of climate change
Challenges of hybrid working
Rising energy costs and war concerns
E-mobility and electrification dilemmas
Post-Covid employee turnover
Labor market bottlenecks
Inflation and recession worries
Almost everywhere, there are slumps in growth due to significant gaps in know-how, with no short-term prospect of a solution due to bottlenecks in the labor market. All these troubled companies are looking for external expertise. The stress is great, the pain is severe. Companies are desperate and often have no choice but to turn to specialized consulting firms.
The difficulties of the last two to three years have highlighted the importance buyers place on quick and predictable results when working with a consulting firm.
They have very specific problems for which they need urgent help. And that usually requires extensive expertise. Consulting firms must fully grasp all the details, background, context, relationships, characteristics, frequency, scope, typical stakeholders, etc., of the target audience's critical problems (in their narrow area of expertise). For those who cover multiple specialties (and keep their options open for fear of losing revenue), this is completely impossible, and potential clients will quickly "smell it."
Specialized consulting firms can achieve greater financial success, and here's why:
Specialization is the way to repeat similar projects;
Repetition of similar projects is the path to deeper expertise (and more project efficiency and less variability in results);
Deeper expertise is the path to irresistible value for the customer;
Irresistible value is the path to premium pricing;
Premium pricing is the path to sustainable profit;
A firm that shares educational, solution-oriented, and actionable content on LinkedIn is more likely to be noticed by a greater number of stakeholders in the prospective client's organization than a firm that mindlessly cold-calls and sends emails to said prospects.
A company that writes case studies highlighting results and how those results were achieved will build more trust with its audience than a company that just brags about numbers.
A company that shows up on the first page of Google for relevant search terms will generate significantly more leads than one that shows up on page 10.
Trend #5: We've entered an era of deep specialization
All major companies in all major industries are suffering from ever-increasing complexity combined with a critical shortage of required in-house expertise and no immediate availability of these experts in a tight labor market.
Business challenges have never been greater (to name a few):
Digital disruption threats
Post-covid supply chain confusion
Cybersecurity headaches
The exigencies of climate change
Challenges of hybrid working
Rising energy costs and war concerns
E-mobility and electrification dilemmas
Post-Covid employee turnover
Labor market bottlenecks
Inflation and recession worries
Almost everywhere, there are slumps in growth due to significant gaps in know-how, with no short-term prospect of a solution due to bottlenecks in the labor market. All these troubled companies are looking for external expertise. The stress is great, the pain is severe. Companies are desperate and often have no choice but to turn to specialized consulting firms.
The difficulties of the last two to three years have highlighted the importance buyers place on quick and predictable results when working with a consulting firm.
They have very specific problems for which they need urgent help. And that usually requires extensive expertise. Consulting firms must fully grasp all the details, background, context, relationships, characteristics, frequency, scope, typical stakeholders, etc., of the target audience's critical problems (in their narrow area of expertise). For those who cover multiple specialties (and keep their options open for fear of losing revenue), this is completely impossible, and potential clients will quickly "smell it."
Specialized consulting firms can achieve greater financial success, and here's why:
Specialization is the way to repeat similar projects;
Repetition of similar projects is the path to deeper expertise (and more project efficiency and less variability in results);
Deeper expertise is the path to irresistible value for the customer;
Irresistible value is the path to premium pricing;
Premium pricing is the path to sustainable profit;
Trend #6: Clients want trusted advisory firms that can deliver quick wins and long-term results
- This shorter time horizon has inevitably led to new consulting firms having a shorter lead time for selection (less patience) while focusing much more on selecting visible experts who are well-established in their market or industry.
- Clients are looking for consulting firms they can trust. They want to work with firms that can help them have an impact on the bottom line. They are looking for a secure way to justify the investment in consulting services (internally). Buyers don't want to be sold. They don't want to read or receive sales materials that say generic, highfalutin things like "We get our clients to perform at their best.
- They want consulting firms that understand their clients' problems at a deep level. Those who can put those problems into a larger context. Those who have successfully delivered transformative projects for similar clients in the past openly share those success stories (including the "how") in their communications.
- Buyers want to see immediate results. In tough economic times, every investment gets even closer to scrutiny and accountability. Clients are under tremendous pressure to justify their spending on consulting services almost immediately. Of course, I'm not talking about results within a few days. But it's important that consulting firms can demonstrate the difference their services make within a few weeks or months.
- Clients want to be set up for long-term success. They don't want services that tape off a pipe that needs to be replaced. When they hire consulting firms, even for short-term projects, they want a permanent - or at least long-term - improvement in their status quo.
Trend #7: Consulting leaders can no longer avoid being actively involved in marketing
Consulting executives need to increase their involvement in marketing and business development. A consulting firm can hire the most brilliant marketers or content writers who know the best SEO practices, are well-versed in various marketing automation technologies, and can efficiently manage social media accounts. But if consulting firm executives don't drive marketing efforts by providing them with their leading-edge thinking, marketers will only be doomed to failure.
The new archetype consulting firm that openly shares its expertise doesn't care about making money, it cares about educating its target audience and helping them solve their problems (see also Trend #1). The fact that they don't care about money means that they will end up making more money. Leaders in the consulting industry need to step forward in 2023 and consistently share their leading thinking and firm/practice expertise.
They must collaborate with marketing teams in developing content calendars and advertising channels. They must lead by example and encourage their team members to share their collective expertise in a way that educates audiences and inspires action.
Consulting executives need to increase their involvement in marketing and business development. A consulting firm can hire the most brilliant marketers or content writers who know the best SEO practices, are well-versed in various marketing automation technologies, and can efficiently manage social media accounts. But if consulting firm executives don't drive marketing efforts by providing them with their leading-edge thinking, marketers will only be doomed to failure.
The new archetype consulting firm that openly shares its expertise doesn't care about making money, it cares about educating its target audience and helping them solve their problems (see also Trend #1). The fact that they don't care about money means that they will end up making more money. Leaders in the consulting industry need to step forward in 2023 and consistently share their leading thinking and firm/practice expertise.
They must collaborate with marketing teams in developing content calendars and advertising channels. They must lead by example and encourage their team members to share their collective expertise in a way that educates audiences and inspires action.
Trend #8: Consulting firms that neglect former and existing clients will struggle with poor marketing and business development ROI
It costs 5x as much to acquire a new client than it does to retain an existing client. The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%.
The fact that retaining clients and seeking referral business is not a business development priority for consulting firms is mind-boggling.
"But I just don't have time! When can I develop a nurture strategy between lead generation and my actual work?" This is a typical response from consulting leaders.
Client retention and retaining the memory of past clients is not complicated. Consulting firms need to give past and current clients a chance to hear from them on a regular basis by unlocking their inner teacher and never stop teaching valuable lessons. Consulting firms should start producing educational content and then sharing it with their former and current clients - newsletters, custom emails, social media posts, etc. So much can be accomplished in business development by keeping former and current clients in the loop to nurture them.
An email list should be one of a consulting firm's most valued marketing assets. This tool has stood the test of time and yields the highest ROI of any marketing platform. However, the success of building and using an email list varies from firm to firm. When consulting firms focus on quality and sharing content that educates their audience, their email lists can yield better results in the long run. The quality should be in the thought leadership posts that consulting firms provide to their contacts - authentic, with real insights that address the key issues facing their target clients. These insights should be shared freely and regularly with former (not to mention former clients who have changed jobs), existing and prospective clients.
Trend #9: Reputation and brand awareness will continue to lose importance
Many companies have taken their visibility for granted.
As I highlighted in Trend #4, buyer behavior and expectations are changing. They are less impressed by the recognition value of a consulting firm's brand and more impressed by the results a firm can demonstrably achieve.
As highlighted in Trend #6, buyers are also looking for evidence of the consulting firm's ability to deliver results. Brand recognition can be limited.
Then there are the client-hungry, digitally savvy competitors in the form of boutique firms that are popping up every day. Those who generously share their knowledge. Those who engage their target audience through thoughtful posts with actionable insights and recommendations.
Brand awareness is still important and a great support for marketing and business development. However, brands don't solve problems, and the ability of consulting firms to rely on their reputation and brand recognition to compete with these cutthroat, expertise-driven (as opposed to brand-driven) newcomers will diminish over time.
Expertise (bottom-up) creates differentiation in consulting. Branding (top-down) is how awareness of that differentiation is strengthened or magnified.
Trend #10: Consulting firms that use self-centered language will lose opportunities to those that use client-centered language
Buyers are impatient. They don't have the time (or inclination) to spend more than a few minutes looking at a consulting firm's website or documentation.
The sad reality is that most consulting firms' websites are bad. In a big way. Consulting is a highly competitive, trust-based business. Consulting firms need damn good websites with proper structure, unparalleled evidence of expertise, and influential educational content.
Most importantly, these websites should organically generate demand for the firm's (targeted and publicly announced) expertise.
It shouldn't be a big "we-we-we" show. Rather, it should focus on the problems of the target audience. And that goes for any communications outside of the website - thought leadership posts, LinkedIn posts, pitches to potential customers, speaking engagements. All content should use customer-centric language. To capture the attention of potential clients who are scouring dozens of websites and thought leadership publications to find the right consulting firm, you need to demonstrate a deep understanding of their problems and the expertise needed to solve them.
CONCLUSIONS:
The year 2023 is full of opportunities. And yes, I say that even though I'm aware of the anxiety many consulting firm executives feel about the looming recession. But that's exactly why consulting firms should take the time to rethink their current practices: their approach to business development, their positioning, their language in communicating with potential clients, and so on. A recession shakes up the system, which means it opens up new opportunities. Consulting firms that anticipate these opportunities, align their (narrow) positioning with changing client needs, and use education-focused content to deliver value and expertise can expect to be at the forefront.