We work with consultancies every day, examining their business models, business development approaches, sales cycles, external messaging, marketing strategies, and financials.
As we compare what high-performing consultancies do differently from run-of-the-mill firms, we observe a widening gap in performance and profitability. This gap is driven by drastically different approaches to how these consulting firms perceive and communicate their value.
We refer to these approaches as the old and new consulting models.
In this article, I’ll explain the difference between the two models and why one challenges consulting firms while the other fuels strategic growth.
The old model is essentially built around going to market by selling a capability: "We are experts in X. Who here needs X?"
These firms are selling their capacity: “Oh, you need X? Great, we’ve got 10 people who are excellent in X available.”
Capability and capacity selling.
As a result, most of these consulting firms usually do project-based work and grow rather opportunistically. Since they haven’t clearly defined how clients should best apply their expertise, they end up taking on almost any project that seems like a fit.
That’s how most consulting firms get started, and it’s a valid model. However, it is not fit for long-term growth and scaling.
This old model is under increasing pressure today. With the rise of freelance/contractor platforms, software solutions, and AI, clients have many other ways of accessing expertise and capacity, and many of them come with a much more straightforward proposition.
There's also more competition than ever. With large firms downsizing and tech companies shedding staff, many more experts are launching their own consultancies.
Consulting firms that operate under the new model don’t promote raw capabilities. Instead, they sell outcomes, specifically what clients want to achieve: “We will help you achieve X.”
Instead of showcasing their capabilities, they define the typical business problem they can solve, paint a clear picture of the transformation that can be achieved, and lay out a structured path to success.
By educating potential clients on the impact of the transformation, they position themselves as partners in solving real client challenges, not just providers of expertise.
The two approaches dramatically shift how a consulting firm positions itself in the market. This shift is often a significant leap for both boutique and larger firms.
A - fictional - example: from “we help with digital transformation” to a much more specific propositionSo, how can a firm begin to design its refined proposition intentionally Let’s start with a vague, capability-led statement like “We help with digital transformation.” A more outcome-oriented approach would involve asking sharper questions:
By reframing and reorienting the firm’s capabilities and services around these questions (an exercise we like to ground in a consultancy’s recent successes, utilising a framework what we call the ‘best engagements review’), the proposition may then evolve into a clearer expression of the firm’s focus, expertise, and transformational value. Think…
These aren’t final taglines—they're directional examples. However, they highlight a key principle: lead with the pain point or desired outcome. Once you’ve opened the door with a relevant proposition, you earn the right to explain how your firm delivers it. Remember, though, that value proposition design is not about finding a clever new slogan for your services. It’s about anchoring your proposition in the specific business issues your target clients face and articulating the concrete transformation and outcomes you help them achieve. |
Recommended reading: There Are Two Ways to Run a Consulting Firm. One Drains Profitability.
The two core problems with capability-selling consulting firms:
a) Buyer behaviour: they aren’t aligned with how buyers search and buy professional services. Potential clients do their homework; they seek problem-resolution expertise/experience, not mere capabilities.
b) Commoditisation: they often end up in a “commodity position” as they sell vaguely explained (laundry lists of) services to an unspecified target market (not explaining the ideal client profile) and are not particularly differentiated.
When consulting firms focus on promoting their capabilities, this may occur:
Growth blocker: Ultimately, in the long run, it impacts growth. Client acquisition costs are higher. Due to the high variance in projects, creating consistent success stories or retaining clients effectively is challenging. Moreover, even when consultancies detain clients, it is often by saying “yes” to almost everything, which adds complexity to the consulting firm's management.
The result? Even when it appears on the surface that a consultancy is growing, its margins erode over time, creating financial instability.
Recommended reading: How to Structure Multiple Value Propositions Without Losing Your Firm’s Identity
Proposition-led selling in consulting helps clients understand how to use a consultancy's expertise. In other words, it specifies the target audience, which problem(s) are solved, and clarifies the benefits and outcomes clients can expect, reducing confusion and helping them make informed decisions.
Now, shifting from the old to the new model isn't as easy as hammering out new messaging or updating your website. It requires a foundational shift in how the consulting firm thinks about itself and how it goes to market.
There are a lot of barriers to making that change. Here are some common ones that we’ve come across in our work with consulting firms:
The era of winning work by listing capabilities and services is over. Today’s clients are no longer buying breadth. They’re buying clarity. Confidence. Outcomes.
Shifting from the old to the new model, from capability selling to proposition selling, demands more than a new pitch deck. It requires a redefinition of how the consulting firm positions, sells, and delivers, starting with how it defines its own identity.
It’s not an easy leap. But it’s the only path to:
Pricing power based on perceived value.
Longer, deeper client relationships.
More predictable, sustainable growth.
In our experience, the consulting firms that break away from the default old model and commit to a sharp, issue-led, and outcome-based proposition outperform, not occasionally, but consistently.
The future belongs to the new model.
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