How To Focus On The Right Types Of Sales: A Case Study
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Consultants often ask me what is the right percentage of growth and over which timeframe should they achieve this growth. They want to know if their goal should be to double their sales or increase them by a certain percentage. In my experience helping numerous clients, what I find is that this is the wrong question to ask and the wrong focus when it comes to growth. Your focus should be on having the right types of sales, not on having new sales regardless of the type of work sold.
The easiest way to explain this is to imagine what would happen to your body if you ate cheeseburgers for breakfast, lunch and dinner for one year. You would probably not like the outcome. Your body, routines and lifestyle would need to adjust to accommodate your new diet. You would gain weight, not feel as good and even your identity would be impacted. In the same way, your consulting practice will adjust itself to deliver the types of projects you are selling and delivering. Again, it’s less about getting a sales number and more about getting the right types of sales.
The Wrong Sales Focus
As a case study for the point I am making, my company was once asked to help a consulting practice that admired strategy work. They believed it was the highest margin work. They would try to sell projects that were heavy on analytics, which is how they interpreted strategy work, and the projects lasted from two weeks to two months. You can imagine how stressed those partners were. They had to constantly find clients and close new projects every few weeks to keep their staff busy. They had to meet new clients all the time since the same client rarely wanted back-to-back strategy-type engagements. In each meeting, each client had a unique issue which the partners needed to wrap their heads around. They liked taking slides to meetings so they had to have a dedicated group of analysts preparing unique slides for complex issues.
Strategy work is hard and intense. The training also suffered since consultants were almost always staffed on projects, often on multiple projects. The best consultants did not have the time nor energy to train newer and weaker consultants. Eventually, the quality levels fell, which led to the partners having to rely even more on a small and dwindling group of star consultants who felt underappreciated and overworked.
It was also hard to forecast cash flows for the office. Projects were often canceled and postponed. Hiring behind a wave of multiple projects that started at the same time was a perilous task because there was no certainty of work after the projects ended. This in turn led to a lack of training because no one knew if the investment was worth it for the new consultants who might leave soon. Eventually, the firm shifted to using contractors who had different skills, styles and operating practices. The office struggled to grow sustainably. The staffing, morale, structure and culture of that office was the outcome of the projects they pursued.
The main recommendation we provided to this firm was to start measuring their long-term relationships with each client. Rather than celebrate a portfolio of strategy studies across numerous clients, we asked them to step back and think about what would happen after the initial study. If the initial study identified deeper issues to solve, like developing a new digital plan, why was the firm not helping the client? In effect, this firm had one product: A strategy diagnostic that they shopped around. We taught them to find important clients and build the skills to serve those clients on their most pressing issues.
Lack of knowledge and resources was never the issue, but the company had been making the wrong kind of sales. Their clients wanted more than strategy. While they had everything to succeed, including great relationships with local business leaders, the problem was the model of what they were selling never allowed them to grow and build a quality practice. Eventually, the firm was able to change its business model and fee structure in order to take a lifetime view of serving large clients.
Selling The Right Projects
Your offices, practices and consultants need stability regardless of what field you’re in. Growth is risky, and it’s a bet on the future. If you choose a sales model that is inherently unstable and relies on low profit margin or draining project types, it will be very hard to grow.
When cash flows are stable, your office can make big investments for the future. You can focus on getting talented and driven people on board, training them well and grooming them for the future. While strategy projects have a sexy appeal, a firm that is not designed to deliver them will sell them in an unprofitable manner.
This is a challenge especially for consulting boutique firms but also for larger firms. It’s relatively easier to sell smaller analyses or diagnostic pieces. Most firms consider this to be strategy work. However, what we find is firms get trapped in a cycle of being so fatigued on delivering these projects and selling more of them to cover their costs that it becomes very difficult to step back and analyze their business model. And it becomes even harder to find the energy, drive and resources to start implementing the changes needed.
The building block of a consulting practice is selling the right kinds of projects that provide stable and recurring anchors for growth. Some projects cannot allow for this. Strategy projects alone cannot do this and should be a gateway to longer relationships. The goal is to get the right kind of sales where the client tells you what the problem is and ranks it for you — then gives you the space to implement the changes.
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