25 Positioning Lessons Every Consultancy Should Internalize
Positioning a Consultancy
I can’t say it enough – positioning matters.
Consultancy positioning is the pivotal act of clarifying what problem(s) a consultancy is solving for which specific audience and how its approach is achieving that.
A consultancy’s positioning is its strategy. As Michael Porter said: “Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different”.
How a consultancy designs its positioning and later communicates it both internally and externally will make or break a business.
Perhaps not in a year, maybe not in even 2 or 3 years. But firms with weak positioning will inevitably find themselves in a downward spiral, chasing every possible opportunity, overstretched & overburdened.
Some of them, I’ve seen it multiple times, are barely keeping their heads above water due to poor margins, caused by too low prices, project inefficiency (lack of repeatability), chaotic resource allocation (never sure about ‘the day after’), and high cost of client acquisition (chasing clients).
That’s why I religiously share my advice on positioning via both the blog articles and LinkedIn posts.
Here, I’d like to summarize the 25 LinkedIn posts I dedicated specifically to the subject of positioning. I hope all consulting leaders that read this post take their time to read through each piece of advice and lesson that I learned over the years.
Sure, it’s better late than never to design laser-sharp positioning. But it’s even better now than later to do so.
#ConsultingPositioningFriday Posts on LinkedIn
- Poorly positioned consultancies will struggle to explain typical outcomes of their work.
Here, I explain the powerful difference between introducing a consultancy by explaining what it does versus highlighting what clients typically achieve when working with the firm.
- Most consultancy’s positioning sucks!
Positioning is a foundational element. If a consultancy has weak positioning, it’ll negatively impact its business development, marketing, service development, client retention, and other vital processes.
- Recession looming? Time to review the consultancy’s positioning.
Recession periods force established systems and processes in the state of shock. This presents lucrative opportunities for consultancies that are able to revise their positioning and pivot correctly.
- Consultancies must stop comparing themselves with competition.
Strategic positioning of a consultancy does not depend on competitors. Rather, it depends on factors like a deep understanding of the target audience’s pain points, connecting these challenges with the problem-resolution capabilities of the firm, and becoming the go-to expert.
- Here’s a case study of a highly profitable consultancy.
I provide real data and numbers from a mid-sized consultancy firm whose gross margin is way - WAY - above the market average, and explain how the firm was able to achieve that.
- Show me a consulting P&L, and I will explain the quality of the consultancy’s positioning, focus and specialisation.
Here, I explain why profit margins of well positioned, narrowly focused and deeply specialised consulting firms almost always are significantly higher than that of consultancies that target multiple expertise domains in an effort to protect short-term revenue.
- One of the biggest mistakes in consulting: offering a Royal Buffet.
Consultancies whose business development pipelines have stalled should first and foremost reevaluate their positioning. Those that try to cater to too wide an audience will inevitably face the problem of diminishing returns.
- Positioning in consulting is either driving growth or slowing it down.
Great positioning in consulting drives growth. Poor positioning slows down growth. It’s as simple as that. Here, I explain why.
- Consultancy owners, with their great emotional commitment, often are the bottleneck for disciplined positioning.
In an attempt to protect short-term revenue and, oftentimes, because of their egos, consultancy owners tend to say yes to all prospects. Over time, however, that dilutes positioning and negatively impacts the revenue and profits.
- Good news! The need to update a consultancy’s positioning is often a sign of growth.
Going back to the drawing board and reevaluating a consultancy’s positioning is not necessarily bad news. Quite the opposite – often, it’s a sign that a firm has outgrown its current positioning and should pivot towards a more profitable strategy.
"The problem is not the crowded consulting market, the problem is the consultant. In a world full of self-acclaimed experts, don’t ever think that your consulting services are what you think they are but what they do for your client. It’s not what it is but what it does. Never forget that sentence again!"
- Deliberately withholding information? Consultancies are fooling themselves.
Consultancies that invest time and effort into sharpening their positioning should not withhold that information from the public. In fact, they should proudly declare their new positioning on the website, marketing collaterals, in conversations with prospects – everywhere. Keeping all options open is foolish.
- Take a deep breath, narrow the focus and become the very best, top-of-mind consultancy for just ONE thing.
The ultimate goal a consultancy should have for its business development is prospects inviting to complete projects as a result of a reputational footprint as a consultancy. However, that’s never going to happen for firms that are not known as the go-to experts in a narrow field.
- Poorly positioned consulting firms have no choice but to compete on pricing.
Here, I provide a quick list of self-assessment questions that will tell whether a consultancy needs to get more explicit about the target audience and its problems to be solved.
- A common mistake consultancies make in difficult economic times?
Creating a bunch of new services to catch more opportunities is a common mistake consultancies make when panicking about revenue in tough economic times. However, it’s a risky game that most likely will cause more damage to revenue long-term.
- Prospects will struggle to get approval for working with a poorly positioned consultancy.
The “we-we-we” stories that consultancies tell their prospects don’t get the internal approvals in the prospects’ businesses. What does? The “here are the pain points we can solve for you” and “here is what your business will be able to achieve” stories do get those approvals.
- Breaking the myth: a narrowly positioned consultancy can still offer a wide range of services.
Through two examples of former clients, I explain the difference between offering a wide range of services as a generalist firm and offering an integrated, connected set of services as a narrowly positioned consultancy.
- A laser-sharp positioning as a consultancy is the foundation of rock-solid employer branding.
Prospects are not the only ones who check out potential consultancies. Candidates do as well. And top talent wants to work with firms that have the reputation for excellence and deep subject matter expertise.
- Laser-sharp positioning drives a consultancy’s efficiency and profit.
Well-positioned consultancies are more likely to achieve a much higher degree of decoupling value delivery from the effort. For them, there’s no direct relationship between revenue growth and headcount increase.
- Luk, how to answer the question ‘Why should we hire your consultancy?’
This question often puts consulting leaders in the defensive mode and, as a result, prompts generic answers about the years of experience and the wide range of services offered. Consultancies that have a strong trust base with their audience, on the other hand, don’t get asked this question. The target audience already knows.
- Swim lanes are there for a reason, yet consultancy co-owners frequently jump lanes.
Way too often, consulting leaders jump lanes – say yes to opportunities that are outside of the internally agreed-upon positioning. It’s tempting but, ultimately, damages the business.
"Without a strong positioning as the go-to experts in the market, consultancies will get pulled into everyday commodity work, taking orders from lower level team members of the client, getting measured on ‘hours performed’ instead of ‘outcomes delivered’. At low rates, beaten up by procurement. With inferior profit. Totally unattractive for top talent. Heck."
- Is the expertise of your consultancy perceived as an essential spend?
When prospects trim out the non-essential spending, consulting firms that are worried about its impact on their business should go back to their positioning and determine why their services are deemed as non-essential. Clearly, the positioning requires some serious revisions.
- The positioning book ‘Obviously Awesome’ had a significant impact on me. The author: April Dunford.
The book's subtitle: “How to Nail Product Positioning so Customers Get It, Buy It, Love It”. While the book is targeted primarily at tech companies, the positioning insights and strategies in the book are highly relevant to consulting.
- What is the link between consultancy positioning and my gravel bike?
This is a reminder to consultancy owners and consulting leaders to think WHY they are in business. Ultimately, it’s to have the life we want. And if business development and growth are not helping achieve this ultimate goal, it’s time to revise how the business is being operated. And that starts with the positioning.
- Here’s how a BPE approach transforms consultancy positioning.
BPE stands for ‘Bridging-Problem-to-Expertise’. It’s a way to get rid of meaningless, generic, vague language that too many consultancies utilize. It’s a way to communicate the value- and problem-resolution-driven approach of a firm.
- The story of a consultancy cutting back 30% of services and improving its profitability.
It’s a summary of how a consultancy I’ve been following for the last 6 years managed to pivot its positioning and implement a strategy that allowed it to achieve stronger results with (eventually) less effort.
Consulting firms that:
- rarely receive invitations and requests for expertise
- struggle with tough client objections
- hardly ever say No to incoming opportunities irrespective of how relevant they are to the core business
- constantly feel the need to twist the expertise narrative to ease the pitch
- regularly offer discounts to close a prospect
- struggle to provide transformational case studies
should take a long hard look at their positioning. These are just a few symptoms of a poorly positioned consultancy.
And, unfortunately, this downward spiral of barely getting enough projects to sustain a business will continue until the consultancy implodes.
Recommended reading: Positioning in Consulting Is an Exercise in Irrelevance and Here’s Why
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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.