I am often asked how we have seen the consultancy market change in the last six months.Remember that the majority of our consultancy clients are in the bracket between £500k and £25m turnover (or are blue chips trying to reach the small business market/audience).
So here goes.
- Potential clients who had difficulty knowing why they were buying or were unable to see the benefit of a specific project have put their projects 'on hold' - good news for everyone - no-one needs a client who isn't convinced of the value you are adding to their business!
- Clients have become more results-focused - hurray!
- Clients have recognised the need for real, tough decisions and to stop playing around the edges - hurray!
- Clients have become willing to pay more if they have the confidence that they will get the results they desire - a good thing!
- The demand for (strategy) awaydays or two-day workouts as well as for masterclasses has rocketed. We are doing more work that is sharply focused and with defined outcomes - a good thing!
Consultancy has never been and should never have been seen as a good thing like 'motherhood and apple pie'. This was often the case pre-recession. I think that some clients had taken that view and as a result they had lowered their expectations from an assignment. This was a disgraceful state of affairs for all concerned.
On balance, the recession has been a good thing for the industry:
- Poor consultants have been exposed for what they are - unable to deliver, although this has been at some cost to their clients
- New consultants enter the industry at a very high rate but their lack of track record or credibility is spotted by most - I hope
- The franchise-type businesses focusing on selling consultancy careers are doing well but I cannot (and would not comment) on the quality of their consultants' work
- Organisations focusing on delivering results are going from strength to strength.
In summary, the recession has allowed the trustworthy, serious consultancy players to separate themselves from the rest (through their action and results).
The industry needed this shake-out as its reputation (as totally unregulated.... or as 'someone who borrows your watch to tell you the time') has often been totally justified.
RELEVANT LINKS
'Cheerful' Robert Craven on video back in Sept 08 on Recession Will Shake Out Bad Companies
9 comments:
I recognise that you work with 1m+ t/o business. While we have struggled to attract their attention you clearly talk their language and hence you do so well.
Our experience in Business-Link-land is that many (smaller) businesses are at a loss as to what to do or how or when.
Enquiries have rocketed but for most of these businesses it is too little too late when they come to us.
It is a failing of the industry that we have not captured the imagination or confidence of our client-base.
Our larger clients (1m + t/o) are a different kettle of fish. More professional in their approach to almost every aspect of their business, these people have been more realistic and more strategic in their outlook and less likely to come a cropper. Having said that we have found that they have a real demand for fast action and quick turnaround.
It is shame we cannot always respond accordingly.
Jim
BL
It's also important that you set and discuss your fees with the Client in the right way.
The Client will want a quick fix, as Jim points out, but if the Consultant is charging by the hour, they will want a slow fix. This is a conflict of interest, i.e. it is not Win-Win.
However, if you help the Client articulate the full value of having their problem solved, and then set your fees accordingly, on a fixed fee for a fixed result basis (having already determined that this is profitable for you), then you achieve Win-Win!
For the Client, Win-Win is a bargain investment for a huge value return, and for the Consultant it is a highly profitable reward for their efforts.
If you don't get this, you need to find out more about Pricing By Value, otherwise known as Value-Based Pricing.
I know it works for me!
David
We are an accounting practice and have changed from charging by the hour to to charging a fixed price. (Robert's advice.) As he predicted, we work harder to be more effective/efficient and the client demands as much as possible. There is a caveat about charging for extras and additonals so everyone wins. As the client becomes more demanding so he/she also becomes more 'dependent' on our service.
Simon C
Accountant
Nice video. Only just spotted it. Shame about the eyes.
Bonnie
Our experience is that clients want results-driven activities now. As a web design/marketing company we find that clients are finally focussing on results and not just make-overs. At last we can have a sensible conversation with them and talk ROI (Return on Investment) and not jus pretty pictures and logos.
Tim C
Most cons are doomed
Jonathan
Most cons are doomed
Jonathan
We are an accounting practice and have changed from charging by the hour to to charging a fixed price. (Robert's advice.) As he predicted, we work harder to be more effective/efficient and the client demands as much as possible. There is a caveat about charging for extras and additonals so everyone wins. As the client becomes more demanding so he/she also becomes more 'dependent' on our service.
Simon C
Accountant
The difference between entrepreneurs and most consultants: http://su.pr/62mBHw
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