Do Consulting Firms Know the Real Problems They Solve?
The High Cost of Focusing on Capabilities, Not Client Pain. In our conversations with consulting...
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“If only our partners worked together more, revenue would grow exponentially.” Ah, the illusion of cross-selling that many consulting leaders buy into.
The theory behind cross-selling efforts is simple – and justified: utilise existing relationships with clients to deliver more value to these clients.
In practice, however, cross-selling rarely works like that.
The problem isn’t the lack of effort. It’s not even about the principle of cross-selling. The problem is wrong design choices.
Without creating a set of connected services that centre around the same pain point and cater to the same target audience, cross-selling will most likely fail to deliver expected results as a revenue generation tool.
In this article, I will dive into why that is the case and offer an alternative strategy that high-performing consultancies excel at.
Why Cross-Selling Does Not Deliver on Expectations
We come across the problem of cross-selling frustration on a regular basis when working with consulting firms.
What do most of them have in common? What they call “cross-selling” is, in reality, a monthly scramble for extra revenue.
The problem in these consulting firms is almost identical: a business has multiple service lines with partners leading each group of services. Each group is optimised in its own silo – by capability, industry, or geography, for example.
This disjointed, significantly isolated mode of operating multiple service lines creates the following barriers:
- Competition: Service line leaders are not motivated to sell service offerings from a different service line for fear of losing their clients.
- Lack of thorough understanding: Even if service line leaders don’t worry about losing clients, they do not have enough expertise and experience selling a different set of services. They lack the depth of knowledge needed to explain in a straightforward way what pain points this group of services will help resolve and how it can impact the larger picture.
- Fragmented client experience: Oftentimes, clients end up receiving inconsistent, uncoordinated messages and proposals from different parts of the consulting firm. This leaves clients feeling uncertain about the capabilities of the firm, uninformed on how the different service lines come together to solve a larger underlying issue, and unsure how to proceed.
- Reactive business development: There is no culture or an established set of processes and systems that encourage and facilitate cross-selling. Instead, it’s done as a result of a meeting where a senior leader, anxious about revenue numbers, pushes service line leaders to engage in cross-selling. Or, once a month, the partners sit together, review client accounts and ask: “What else can we sell to clients A, B, and C?”
The Real Problem: A Disconnected Portfolio of Services
- We just need a unified business development strategy!
- We are missing an account-based management system.
- All we need is a synchronised go-to-market strategy.
We’ve heard it all from consulting firms trying to make cross-selling work.
Yes, in a few instances, these changes worked. Unfortunately, in most cases, they crashed and burned. Why? Because the portfolio of services is disconnected, and no amount of “unifying on the messaging” can fix a foundational problem like this one.
Consulting leaders are quick to blame revenue problems on sales and marketing shortcomings. However, that’s not the root cause. The problem in these consulting firms is of design nature.
Their service offerings developed organically over time. For example, one partner created an offering from scratch in response to a client request. Another one launched a whole niche capability after hiring a specialist. A third one expanded on the services offered to a key client.
Before long, this firm has a patchwork of unrelated services that lack a unifying proposition.
Instead of addressing the root problem and going back to the drawing board, leaders of these consulting firms choose to justify this chaos with “revenue diversification” arguments.
That’s why they continue to live in denial when profits take a nose dive and push cross-selling initiatives or hire dedicated business development specialists.
Recommended reading: Hiring a Business Development Leader Will Not Fix Boutique Consultancies’ Growth Problems
Cosmetic changes like “unifying messaging” rarely work either. Messaging can only amplify what’s already there. It can’t create alignment among disjointed services.
The Alternative? Portfolio Optimisation Design – Embedding Cross-Selling in the Design
So if cross-selling initiatives don’t work, what’s the alternative? Or rather, what are the conditions that make cross-selling seamless?
Portfolio optimisation design.
Portfolio optimisation is the strategic design and alignment of service offerings in a manner that collectively and individually, they support the overarching proposition centred around clients’ pain points. No single service exists in isolation.
Service portfolios can be optimised at the overarching level or, for larger consulting firms, at the level of service lines, industries, geographies, or other segmentation parameters.
As shown in the visual, at the foundation of portfolio optimisation design is an overarching proposition that connects the dots, linking the client’s pain points to the outcomes they want to achieve.
Service offerings are organised along a clear client success journey across the firm’s expertise domains.
Medium and large firms often have multiple industries or segments that they cater to. In such instances, service portfolios can be organised along those segmentations (industries, geographies, etc.). What matters is breaking the silos and presenting one coherent problem-to-resolution structure.
Recommended reading: How to Structure Multiple Value Propositions Without Losing Your Firm’s Identity
Consulting firms that go this alternative route and put time and effort into optimising their service portfolios around a proposition experience growth that’s delivered by design, not improvised:
- Cross- and up-selling becomes natural. It’s no longer senior leaders pushing the service line leaders to cross-sell. Rather, clients naturally progress through the portfolio as they are guided through the client success journey.
- Internal alignment improves. Since breaking the silos is at the heart of portfolio optimisation design, collaboration between teams becomes seamless. There is no competition for client ownership as the entire team aligned around the incentive to contribute to the success of a unified client journey.
- Value articulation improves. When services are connected around the same client outcomes as opposed to siloed internal departments, articulating value for individual team members becomes easier. This, in turn, makes it easier for clients to understand the entire journey and buy the portfolio of services – or at least the next logical step in the journey.
- Messaging gets unified. When value articulation gets clarified, external and internal messaging is strengthened. From sales and marketing specialists to junior consultants to senior experts – the entire organisation works on amplifying the same core message around the value proposition of the consultancy.
- Further optimisation and resource allocation become more efficient. When there is crystal-clear visibility into which services along the client success journey deliver outstanding outcomes vs which ones dilute the proposition, it becomes easier to continuously optimise it. Resource allocation becomes more efficient along the way as well – e.g., it becomes easy to spot which services can share systems, tools, or processes.
In Conclusion: Cross-Selling Is Not a Meeting Agenda Item
It’s a proposition design choice: how the consulting firm structures and communicates its portfolio so that growth is built in rather than bolted on.
When a firm’s services are designed around clients’ pain points and come together in a unified client success journey, cross-selling happens naturally.
The conversation shifts from “What else can we sell?” to “What is the next logical step in helping the client achieve the ultimate goal?”
Unfortunately, too often, cross-selling becomes a band-aid for siloed practices and/or revenue stress.
Sure, it might generate some short-term revenue, but it’s not sustainable and, as a result, without the service design foundation, not conducive to long-term growth.
Growth is designed, not improvised.
