Why You Should Reverse-Engineer Your Consulting Service Offering
Positioning a Consultancy, Business Development in Consulting
I received an interesting question from a partner in a consultancy. Due to the small size of the consultancy, he and his colleagues frequently get asked by buyers whether they have enough capacity – people and/or expertise – to deliver. “How would you react to that?” he asked me.
This is a really great question and not the first time the subject comes up in my discussions with consultants. And why wouldn’t it? From the clients’ perspective, this is a reasonable inquiry. Right?
Well, the inquiry is reasonable, but it does point to a larger problem in your consultancy. Allow me to elaborate.
Your positioning is off
I know this is probably totally unthinkable for many consultants, but if you get this question, RUN !!! This is the wrong client. You might get in trouble if you continue. Your pre-qualification went wrong.
The fact that you get this question will - in 90% of the cases - result in a weakened client relationship from the start. The buyer doesn’t trust you enough. Otherwise, you wouldn’t get that ugly capacity question.
And if you are desperate to get the deal, you will most likely try to twist your answers to convince the client to defend yourself. Or you will try to prove you can deliver by all means. In most cases, it will result in either a substantial negotiation loss of power at your end or in an over-serviced and under-charged project profile. Say NO!
I know I am a little black and white here because I hope it works cathartic for you. Let me explain a bit more.
It’s about you, not about the client
This question about the needed delivery capacity is all about you, not about the client. No, it’s not a difficult question or an overly demanding buyer. If you get into such an ‘inquisition’ recurrently, the positioning design of your consultancy is wobbly. You bet.
What does that mean:
- You either have targeted the wrong audience (e.g., too big/small, too complex,...) or your client pre-qualification process went wrong (by the way, I never had to pre-qualify, see topic 8 in this article);
- You are suffering from an inadequate assessment of the client's pains;
- You have twisted the pain narrative to fit into your capabilities and capacity, a frequent problem caused by exaggerated ambition or ego;
- You have developed an inaccurate problem resolution (for the false client pain) leading to a wrong service offering. I consider this as the ultimate disaster scenario (and you probably don’t realize it until you get challenged).
Recommended reading: Your Consulting Positioning Has the Single Biggest Impact on the Buying Decision
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Poor positioning is difficult to recover from
In workshops, I am always asking consultancy teams: what is difficult to recover from? I almost always get the answers: losing a client, losing a proposal, or losing a key player in the team.
At the end of the workshop, I always repeat the question. If everything goes well during the workshop, the participants understand how vital positioning is.
The new answer most likely becomes: the wrong positioning of our consultancy is the most difficult obstacle to deal with.
Why? Because more often than not, that’s the root of the rest of the problems:
- wrong clients make for a wrong fit;
- a wrong fit requires too much adjusting the service offering to please the client;
- trying to please the (wrong) client, will get you in vicious convincing and negotiating;
- and guess what happens: you will end up taking on (the wrong) projects for a highly discounted rate and the client will tell you what to do.
Entering a pitch with such an ambiguous or hazardous positioning is like leaving the garage with your car with insufficient oil and run-down tires. At some point, you will have to come back, repair it and start again.
If your positioning isn’t damn right, this can echo for years to come. That’s why I always urge consultants to externally validate their (new) service offering fast and furious (and iterate quickly to adjust).
As I explain in this article, as a consultant, you attract what you are, not what you want. If clients are asking you the wrong questions, you positioned your services incorrectly.
Solution: reverse-engineer your service offering
To correctly diagnose your bottlenecks, start from your capacity (!!!) and reverse-engineer your service offering.
Don’t target large-scale implementations in a multinational if you are a small team. But you can target such a multinational if you have a packaged solution with limited capacity needs. I strongly recommend checking out my earlier post on how consultants can regain control over their business by packaging their services.
I have several solo-consultant clients doing excellent work for large enterprises, and they never get the demoralizing ‘capacity to deliver’ question.
Before my consulting company iNostix got acquired by Deloitte in 2016, we were 7 FTE. A small consultancy, right? Despite the small size, 4 out of 5 large financial institutions in Belgium were our clients. Of course, we had a reverse-engineered service offering to be able to work for these large organizations with a small team.
Every small consultancy can win bigger clients. Why? Because their offering is limited to, e.g., diagnosis, development of implementation roadmaps, co-writing the business case for a new implementation, providing guidance to executives (advisory retainers), etc.
But it requires discipline (focus!) to stay in the lane and not twist your service offering narrative to get the deal.
So, to avoid getting the ugly capacity question, your consulting positioning is your starting point:
- laser-sharp definition of your client or audience
- deep understanding of the prototypical client pains
- finally, a problem resolution service offering based on those prototypical pains, reverse-engineered based on your capacity to deliver.
Delivery capacity by design.
Consultants receive a ton of questions from prospective clients: Can you deliver this within a week? Are you able to offer a discount? Could you oversee implementation? Can you also do this as part of your offering? Do you have the capacity to take on this project?
Sure, asking questions is how clients get to know us as consultants. However, many of these questions will not come up in the first place if you have a laser-sharp positioning as a consultancy.
Strong positioning, meaning: your focus is very narrow, you consistently share your knowledge with your audience (hence, helping them better understand your level of expertise, trustworthiness, and point of view), you pre-qualify and say no to the wrong clients and opportunities, and you clearly communicate your capacities through your (packaged) reverse-engineered service offering.
Recommended reading: Looking to Package Your Consulting Services? This Productization Model Is for You
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Hello, I’m Luk Smeyers, and I’m guiding consulting firms through the journey of growing their business by helping them transform into go-to experts in their market. 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.