In one of my earlier articles – Regain Control as a Consultant by Packaging Your Services – I argued that offering tailor-made services to your consulting clients is a draining experience, especially if you are striving to offer upstream types of consulting services. I then advocated that consultants consider packaging their services and productizing their business model.
Following the publication of that article, I received a lot of questions from my readers and my larger network. So, I decided to further elaborate on the subject and go deeper into why this is my ideal approach, a step-by-step process, key success principles, pitfalls to watch out for, and a list of examples from other consultants.
There are many definitions, but most of what you will find is about the productization of online services, and that’s a different space than consulting work.
Let me use this definition from author Jonathan Stark:
A productized consulting service is fundamentally a service, but with product-like benefits that allow you to systematize and optimize the packaging, pricing, marketing, sales, delivery, and follow-up.
I’ve already explained the advantages of packaging your consulting services in my earlier article. For example, it makes pricing your services much simpler, it helps you narrow down your focus and deepen your expertise, it saves you a lot of time, and many more.
From the clients’ perspective, there is one more giant reason to switch to packaged services: they know exactly what they will be receiving and what it will cost.
I’ve been talking about this already several times: buyers have a short-term horizon these days (3 to 6 months), they are looking to solve their problems fast and reliably.
Productized services are the most inviting format for them to get your ‘expertise in a box’, reduce risk, increase decision-making and delivery speed, understand the scope and timing, outline their precise involvement and seize the final output/delivery they will receive. Sounds like a stroke of genius, not?
There are, of course, various ways to offer your consulting services in a packaged form. Here’s the 3-step process I’ve been using myself. I’ve discovered that it has wide applicability for consultants who are looking to offer upstream services (diagnostic/advisory support as opposed to implementation services).
This approach works equally well for solo experts and medium-/large-size consulting firms. It works for projects that are €15k and €500k in scope. It’s a unique way of conducting consulting projects and remain in the driver's seat all the time. Believe me, you can apply it in almost any consulting project. Yes, any.
I will go through each step individually.
Let me be straightforward with you. I would never start a consulting project again without PAID upfront discovery. I’d advise you to develop a solid diagnostic (probably with external specialist/scientific support) on the back of your expertise.
I’ve learned that most clients don’t understand their problem(s) or have difficulties explaining it accurately. The biggest win? You don’t write proposals. Never. You are not an order taker but an expert, an authority in your expertise domain.
Your diagnosis is your fixed-priced methodology to understand the client’s problem and is your stepping stone, your Trojan Horse to start the engagement. Clients commit to a precise and transparent project with a specific result in mind: understanding the outlook and specifics of their problem and receiving a roadmap (Step 2) for improvement.
Included in your diagnostic: every possible characteristic of the prototypical client pain you are specialized in. And all these characteristics are the input for your roadmap in Step 2.
Your upfront discovery or diagnosis leads to Step 2, creating a so-called roadmap. It is your critical strategic process of determining the actions, chronological steps, and resources needed to solve your client’s problem.
Roadmapping is often falsely assumed as the act of designing a roadmap. And indeed, a vital output of the roadmapping process is a roadmap :-).
However, creating such a roadmap requires a synthesis of all your knowledge and expertise. It determines all the significant components and the prioritization hierarchy to solve the problem of your client. And, most importantly, it also secures buy-in and support from executive stakeholders.
Apart from the solution components, the prioritization, the resources, and the stakeholder involvement, the upstream consultant leverages the roadmap to inspire the client to self-sufficiency. And promoting client self-sufficiency should always be a key responsibility of every upstream consultant. Reason: you don’t do implementation work yourself.
Here are a couple of resources you can use to help with roadmapping:
It doesn’t matter, being a big, small or solo consultancy, I’d advise any expert-like consultant to stay away from hardcore implementation work to protect your time and altitude of involvement (upstream, strategic). You can read my more detailed argument in my There Are Two Ways Of Doing Consulting, One Is Toxic article.
If you have excess capacity (e.g., in big consultancy firms), the roadmap (Step 2) is your starting point to sell implementation work. It has all the components of the problem-solving approach and you can decide which components you can provide implementation work for.
If you are a solo consultant, I’d advise you to stay away from implementation. You limit yourself to diagnosis, roadmapping, and providing high-level roadmap implementation guidance (the advisory retainer).
There’s a lot of great content about advisory retainers, here’s a great article from Hubspot (my business software). You can read all the pros and cons, reasons, costs, payment, etc.
But here’s how I see it: your client is buying ‘peace of mind’ over a longer period of time (e.g., 6 or 12 months). The client pays ‘access to you’ and you are available to them with your expertise. ‘Being available’ is the essential difference between ‘pay for access’ (upstream advisory retainer) versus ‘pay for work’ (downstream implementation work).
I’d always advise you to give the retainer a basic structure, such as reviewing the roadmap once a month with the team or the C-person (preferably) in a workshop format.
Two watch-outs I experienced with my clients:
It’s impossible to give precise details about the amount of revenue you can generate with a productized consulting approach. I’ve seen projects (with the 3 steps) varying from a few 10.000’s to almost a million. Especially in large-scale technology, the Step 1 diagnosis (or sometimes also called ‘feasibility study’) can be pretty big in volume.
Here’s what I learned in the past decade and what my consulting clients are putting into practice:
Having spoken to 200+ consultants, dozens of which were my clients, there are a number of great examples of consultancies productizing their services that I’ve aggregated. Have a look.
Example 1: Salesforce post-M&A integration consultancy (experts in merging Salesforce after enterprise M&A):Example 3: Retail demand forecasting improvements (experts in automating supermarket demand forecasting using AI):
Standardizing your services is an important element of the consulting business approach that I advocate, but it will only work if you change your mindset about:
Having said that, here are a few dos and don’ts of productization:
Here's a perfect example of what I'm talking about.
A consultant explained to me that she was selling her clients licenses of the tool she had developed. She developed the software tool for herself in the past years, to improve the quality, speed, and pricing of her consulting service. It was her way to productize her expertise. Well done!
But now she started selling user licenses for this tool to her existing clients. I consider this a big mistake.
What happened? She already lost 2 important clients who used her (productized) services in the past. They are now using the tool and told her they will be doing the work themselves.
The price of the license, that's what I was afraid of, was way too low to compensate for the client loss.
She asked for my advice. My answer is quite easy, there are only 2 ways:
It's either/or. Avoid a hybrid approach because it will cannibalize your upstream consulting work and erode your reputation as an expert.
Productizing your consulting services is an excellent way to become an expert in a niche area. It’s a time saver. Your clients will be happier and will know exactly how to recommend you to their network.
Productization is not about eliminating customization. It’s about having expertise deep enough that you can categorize your prospects’ pain points and needs. It’s about creating transparent expectations with your new clients and delivering a 5-star experience.
The consulting productization model that I suggest will work for pretty much any consultant, irrespective of the size of their consultancy or project scope, IF they deliver upstream work. While there are, of course, productization models for downstream consultants, this is not the path I urge my clients and readers to take – it’s a toxic way of running your business that will drain your resources.
Recommended Reading: Regain Control as a Consultant by Packaging Your Services
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