Why consulting firms should target at least 70% referenceable clients

When I audit consulting firms to help them improve their positioning in the market, this is one of the standard questions I always ask: 

"Do you have at least 70% referenceable clients?"

It's one of the best possible measures to see how focused (or unfocused) the consultancy firm is. 

If they are far below 70%, I immediately know something is wrong with their consultancy’s positioning. Let me explain.

The referenceable client list (RCL) in your consulting firm represents your focus, expertise, and ability to deliver specific results by solving prototypical problems of your narrowly defined target audience.

Every opportunity that is brought to the table should be vetted against the firm's positioning, with the question posed: "Would winning this opportunity increase our perception as experts in our declared field of expertise, or decrease it?" (Blair Enns)

I see three main reasons why consulting firms are not achieving this critical 70% target

1. Fluffy focus and positioning

In my experience with auditing consulting firms, with an RCL <70%, either...

  • you aren't targeting the right companies, or...
  • you're not delivering value with the acclaimed expertise, or...
  • your offering is a laundry list of services.

In either case, it's time to reevaluate the focus of your consulting firm, your positioning strategy, and/or your value proposition.

2. Missing referenceable language

For reference-based business development to catch fire for your consultancy, you need to give your clients and prospects the ‘referenceable language’ you want them to use:

  • Target audience A struggles with problem X
  • Your consultancy unlocks prototypical problem X with expertise Y
  • Which gives your clients transformation Z

If not a majority of your former clients (>70%) are using this referenceable language, the reference flywheel effect of boosting the organic growth of your pipeline won’t exist.

3. Missing referenceable case studies

Writing referenceable case studies about prototypical work you are doing, is the standard of business development in consulting. Such case studies represent the proven bridge between a prototypical client problem and the expertise that can solve such a problem at a cost that makes sense.

Don’t forget, we are living in a buyer-centric consulting space and buyers want to buy outcomes, not your activities or services (output). Case studies are inherently outcome-centric and that’s why you need to spend substantial time developing them as a core component of your RCL-based business development. 

Unfortunately, what I am seeing all the time, is case studies full of 'activities', in a 'this-is-what-we-did' style. It's OK to mention what you did but without the outcomes, results, or impact of what you did, I don't consider it as a referenceable case study of your expertise. 

Here's my advice

Referenceable social proof is the backbone of any well-positioned, successful consulting firm.

It acts as THE accelerator for prospective new clients by sharing prototypical success stories and case studies linked to the specific expertise of the consulting firm.

When buyers do their research and they come across your RCL AND your outcome-driven referenceable case studies, imagine how much additional business development power you’ve created. 

I think you get the point (again): to achieve a >70% RCL, you will need a narrow focus of your consulting firm or practice, clearly (and openly) articulated to your target audience.

I've seen it many times when auditing consultancy firms, with a poor RCL, they were struggling with their organic pipeline growth in their specific expertise domain.

Why don’t you set the 70% RCL target to achieve within the next 12 months? It will accelerate your growth in the long run. Tried and tested. 

 

Luk Smeyers

Hello, I’m Luk Smeyers and I’m guiding consultants through the journey of growing their business by helping them transform into visible authorities.  I have been in consulting businesses for almost 20 years, in very different roles: as European CHRO in a global consultancy, as a startup founder in an analytics consultancy, and as a leader in a 'Big 4' consultancy, post-acquisition of the startup. I had the privilege of achieving global visibility as a consultant 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 growing that visibility in the past years. 

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