How Consultancies Can Get Started With Value Proposition Design
This article was last updated on 25 January 2024.
“What is your consultancy’s value proposition?” I often ask consultancy owners and their firms’ leaders this question – typically during the introductory call with a qualified prospect.
The ability to answer it + the answer itself give me a good idea of the type of consultancy I will be working with.
- Some commence a 5-minute monologue outlining the services, the years of experience, and the impressive credentials of the consultants. This tells me that their value proposition is not client-centric, and there’s a good chance this consultancy has a lower win rate.
- Others explain that the value proposition depends on the prospect’s unique needs (huh?). This often indicates that the consultancy tries to be everything to everyone and is in the race to the bottom, often competing on pricing.
- A few have no idea what I’m asking them. This often tells me that the consultancy’s owners don’t have a viable growth strategy mapped out.
- And now and then, I receive a concise, impressive answer that, in under a minute, tells me what problems the consultancy can solve, what types of clients they target, and the outcomes they achieve for these clients. This is when I feel the firm is on the right track and may only need my help finetuning their strategy.
The majority of answers, however, fall into one of the first three categories. And that means we usually start work in the same place: designing (or re-designing) the value proposition.
In this post, I’d like to share a straightforward value proposition design approach that Florian Heinrichs - a former Accenture marketer and consultancy marketing expert - and I co-created in the context of a joint client.
I aim to explain that value proposition design is a manageable process. It’s about taking a thorough – and honest! – look at what and how the consultancy does, evaluate how closely the consultancy’s offering matches the prospects' needs, and then crystalize the learnings into an impactful definition.
Value proposition design is straightforward but requires commitment
Many boutique and medium-sized consultancies skip the value proposition design step altogether. The founders often come together based on their shared area of expertise, they come up with a list of services that their consultancy will offer, and then leverage their network to get things going.
Unfortunately, as the consultancy grows, the owners find it more and more difficult to win enough projects to maintain growth and establish financial health and stability. (This is often when I get a call request from these owners.)
I also witnessed many consultancy owners putting together a value proposition statement by summarizing all their services and slapping on all external messages. There is no intentionality. The consultancy looks like 1,000 other consultancies doing the same.
Why is that? Why are so many consultancies failing at this foundational task?
Based on my conversations with consultancy owners and leaders, I see two main reasons:
- Consultancies don’t see it as a foundational or important factor in their operations.
- Consultancies hesitate to start designing (or re-designing) their value propositions because they don’t know how and think of it as a complicated, resource-consuming process.
Answering the first reason: Value proposition design is one of the most crucial aspects of establishing the growth foundations of a consultancy. It impacts everything: how the consultancy positions itself on the market, how it pitches its services, how it is managed internally, what types of clients it takes on, and what kind of prospects it confidently says no to. It’s a compass that consultancy owners use in their decision-making.
As for the second reason: I understand where the consultancies are coming from. There is a lot of literature on value proposition design. While I, due to the nature of my work and a genuine appetite for the subject, devoured so many of these books and took time to process and take in the learnings, consultancy owners may find it overwhelming.
That’s why Florian and I felt the need to simplify the process for consultancies. To make it less intimidating.
Now, this is not to say that this is a 1-day process. It does require a great deal of introspection, reviewing old projects, conducting in-depth interviews with the target audience, and thinking long and hard about how to create a concise narrative that encompasses the consultancy’s expertise, how it goes about it, who it helps, and what it helps achieve.
However, these are all pieces of a puzzle. What simplifies the process is understanding how these puzzle pieces come together. Understanding the end goal makes every step more intentional and manageable.
The value proposition canvas
Here is the canvas that Florian and I have developed to help consultancies understand the large picture that puzzle pieces will come together for.
I go into more detail explaining the elements of the canvas in this article on the template that consultancies can use to introduce themselves, but here’s a quick recap:
- Clients come to us because… This is a high-level summary of the overarching problem area the consultancy helps its clients with.
- They usually struggle with… Here, consultancies provide specific pain points typical clients struggle with within the overarching area.
- They typically are… Here, it’s about stating what type of audience the consultancy works with/targets – the industry, the types of companies, and the job titles within the companies.
- What they can achieve with us… It’s about explaining the prototypical outcomes the consultancy achieves for its clients.
- Here’s how we help… In this part, the consultancy should give a high-level summary of what working with it entails.
- Trigger point(s) to call us... Here, it's about showing a deep understanding of what circumstance/business needs prompt prospects to finally pick up the phone and call for help.
- Our entry service... Consultancies should be able to point to a service that typically kicks off a collaboration with a client – for example, a discovery/diagnostic service.
- Thought leadership pillar themes... Consultancy owners and leaders that have an education-driven content strategy should be able to name 3-4 overarching themes that the consultancy addresses on a regular basis.
When a consultancy fills in all these boxes with its specific answers, it will have a value proposition statement that they can use in pitches, that they can turn to when making strategic and day-to-day decisions, that they can go back to when determining whether to take on a specific client or not.
As explained by Florian Heinrichs
It's primarily a tool to facilitate discussions about POSITIONING first and foremost ... but we get there via discussing all the other elements you've mentioned.
Examples of value propositions designed based on the canvas
To further help consultancy owners picture the final destination of the value proposition design process, I’d like to offer a few examples of what this could look like.
Example 1: A boutique data analytics company (focus: supermarket chains)
- Clients come to us because their sales forecasting process delivers inaccurate results.
- They usually lack internal expertise on what data points must be considered and which advanced models can be made operational and provide the most reliable outcomes.
- They typically are Sales Leaders, COOs, or Chief Supply Chain leaders of multinational supermarket chains, with important stakeholders such as CFO, CIO, Inventory & Warehouse leaders, and Category leaders.
- We help our clients achieve a more accurate sales forecasting system that, on average, reduces costs by 5-10% and delivers forecasts with >90% accuracy.
- How do we help? Our client work usually involves a feasibility study - a comprehensive assessment of existing forecasting processes, available data sources, and technology infrastructure - followed by a 4-6 months engagement encompassing data cleaning & integration, model selection, testing/piloting, and implementation/operationalization.
- Prospects typically call us when they experience consistently poor results in their sales forecasting and fail to identify the root cause.
- A feasibility study is the first step in our engagement with clients as it helps us understand the scope of the problem and it provides our clients with valuable information on the underlying issues.
- Our content strategy primarily focuses on educating our audience on the main mistakes companies in this industry make when setting up their sales forecasting processes, best practices in building relevant tech stacks, and trends that sales leaders must be aware of to maintain agility and competitiveness.
Example 2: A digital marketing consultancy (focus: international e-commerce)
- Clients come to us because their digital advertising ROI is low.
- They usually struggle with the lack of knowledge of the latest digital advertising best practices and optimization strategies.
- They are typically senior marketing officers of large international e-commerce brands with sizable advertising budgets.
- We help our clients develop internal capabilities to set up cost-effective digital advertising campaigns that increase the ROI, on average, by 30-50%.
- Our work with clients typically starts with an audit of their current digital advertising strategies and performance, leading to developing a customized, effective digital advertising strategy. We then facilitate the hands-on implementation of this strategy, including campaign setup, content development, performance monitoring, and real-time optimization. We also provide comprehensive training to the client's marketing teams, equipping them with the knowledge and skills to manage and refine their campaigns in the future independently. The engagement concludes with a detailed review of results and recommendations for ongoing improvements, ensuring we boost their immediate ROI and build their capacity to sustain these gains over time.
- Our clients usually reach out to us when their marketing campaigns fail to deliver expected ROIs or following an acquisition of smaller brands that display poor marketing results.
- The entry point for our clients is the audit that we conduct to understand the scope of the project, identify problem areas, and build an improvement roadmap.
- Our thought leadership content centers around the following topics: best practices in setting up and running digital advertising campaigns, examples of common mistakes that e-commerce brands make in their advertising and customer funnels, and identification of trends that will impact the industry in the next 12-24 months.
Example 3: A boutique strategy consultancy (focus: regional publishers)
- Clients come to us because they want to diversify their revenue streams.
- They typically struggle with the lack of expertise in setting up paywall-based and advertising-based revenue strategies, and their past experiences with trying to set it up on their own resulted in significant drops in user engagement.
- These are typically chief revenue officers at regional news publications and online platforms.
- We help our clients identify the bottlenecks of their unsuccessful attempts to diversify their revenue streams and create internal stakeholder alignment around a roadmap that enables them to launch and successfully grow the new streams within 6-12 months.
- Our client engagements start with an audit identifying bottlenecks in prior revenue diversification efforts. We then co-develop a data-driven roadmap for revenue diversification tailored to each client's unique context. Our roadmap integrates paywall and advertising strategies while considering user engagement. We drive internal alignment through workshops, and with our continuous support, we empower clients to successfully grow their new revenue streams within 6-12 months.
- Prospects tend to reach out when numerous internal attempts at adjusting their advertising and paywall-based monetization strategies fail to bring reader engagement numbers back up.
- Every client engagement starts with a discovery service, where we take a close look at the client's data, analyze their past strategies, assess their resource capabilities, and determine which stakeholders/teams/departments should be involved.
- Our thought leadership strategy is based on educating our audience about which metrics they must regularly assess and focus on to improve their revenue streams, strategies for audience growth and engagement, and case studies on publishers that successfully introduced new monetization strategies.
Example 4: A boutique sales consultancy (focus: enterprise software)
- Clients come to us because of their poor sales closing rate.
- They find themselves investing increasingly more resources into the sales process just to maintain the same level of sales revenue.
- They are typically national and regional sales leaders of large enterprise software vendors.
- We help our clients diagnose the root of the problem and modernize their sales process, consistently resulting in a 20-40% cost reduction in sales and typically a 10-20% increase in sales revenue in Year 1.
- Our work with clients typically entails an in-depth analysis of their current sales processes and performance metrics. We identify the underlying issues contributing to low closing rates and high sales costs. Leveraging our extensive enterprise sales expertise, we design and implement a modernized, efficient sales process tailored to their needs. This includes streamlining sales operations, enhancing sales training, and integrating advanced sales tools. With our ongoing support and monitoring, clients can reduce sales costs by 20-40% and increase sales revenue by 10-20% in the first year.
- Clients come to us when their profit margins display a downward trend over a period of at least 6 months or following an expansion that fails to produce an expected increase in revenue.
- A diagnostic service is the first step in our work with clients. It allows us to get a solid understanding of the parameters of work, get to the bottom of the problem, and prepare an improvement roadmap.
- We primarily focus on the following topics in our content marketing efforts: nuances of sales strategies that work in the field of enterprise software, explaining the decision-making process and the buyer journey of buyers of enterprise software solutions, and providing pointers on what external and internal factors most commonly impact the performance of sales teams in this field.
All of these examples are relatively easy to process. They deliver the most valuable information to a prospect in under a minute. They explain who, why, what, and how. And this is where consultancy owners should target to end up upon completing their value proposition design process.
Every statement in the value propositions above requires careful consideration and analysis, gathering information, interviewing past clients and prospects, comparing the financial outcomes of past projects, looking at cost optimization opportunities, and so on.
These value proposition statements do not come together out of thin air.
It’s never too late to start with the value proposition design process. Whether it’s a newly formed consultancy or one that’s been around for several years and whose growth has stalled – the importance of getting the foundational blocks right can’t be underestimated.
Value proposition design is not a feel-good exercise. It’s about setting up work parameters based on which all internal operations and external messaging will be based. It’s about the DNA of the consultancy.
This a critical skill to master in every consultancy.
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Hello, I’m Luk Smeyers, and I’m helping mid-sized consultancies become high-performing consulting firms. I have been in the consulting businesses for more than 20 years, in very different roles: as European CHRO in a global consultancy, as a founder of a mid-sized analytics consultancy, and as a leader in a 'Big 4' consultancy, post-acquisition of my consultancy. I had the privilege of achieving global visibility as a consulting leader, and I never had to sell, persuade, or negotiate as a result. I have now bundled all those experiences, expertise, know-how, research, reading, successes, struggles, and failures from managing and advising consultancies in the past years.