Common Traits of Successful Consultancies
Published: 17/04/2022
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Whether you’re a consultant or the owner of a consultancy, we encourage you to read this article. We recognise how competitive your industry is; therefore, we undertook a comprehensive examination of why some consultancies flourish while others fail. This is a detailed piece outlining the common traits prevalent in successful consultancies.
As of our publication, there are over 10,000 consultancies in the UK. Should you be reading this in the future, we assure you that the number is significantly higher. Simply put, the consultancy market is currently expanding exponentially and is still in its early growth stages. That said, it is evident that a saturated industry like this is becoming increasingly cutthroat. Research conducted by Responsiva on the latest data regarding consultancies has revealed that any business consultancy, despite their ever-increasing numbers, has a prospect pool of just 50 leads. So, why do some manage to secure multiple substantial clients while others struggle to remain viable?
In this article, we will discuss what winning consultancies are doing right and the practices they employ that you should adopt. Surprisingly, their secret consists of only two key elements: technology and people. We will explore both and explain the connection between them and how it serves as an engine that drives success.
It hasn’t been more than a decade since we experienced the rapid rise of agencies. Therefore, there is little wonder that many are struggling to distinguish them from today’s fastest growing business phenomenon - consultancies. While the two are indeed similar, there are some key differences.
Perhaps the most distinguishing factor between the two is that agencies are typically hired to concentrate on a specific aspect of the business that represents their niche. They are highly specialised in just one area, such as recruitment, SEO, content creation, and so on.
A consultancy, on the other hand, while also being the expert in its industry, focuses on the bigger picture. Instead of concentrating on stand-alone projects or individual business elements, it provides an overview and offers advice on long-term business development and growth as a whole. To put it simply, a consultancy is hired to create the overall strategy, while an agency is tasked with executing it.
Having distinguished the main difference, let us address the question you sought an answer to—what makes a consultancy successful?
While the concept of consultancy is hardly new, its rise in recent years has been significantly influenced by rapid technological advancement. We collect more data than ever before, which provides the insights necessary to assess and evaluate overall performance and to inform future steps. This is the primary reason why consultancies have suddenly become so prevalent and powerful. However, they must not stop here; they should continue innovating, as this is their key to the future.
One issue we often observe preventing consultancies from advancing is their attachment to legacy models. This typically signifies a refusal to alter certain methods, even when these processes are no longer as effective as they once were. Often, this reluctance to let go stems from a desire to hold on to something that has previously yielded success, in the hope that it will do so again. It is further reinforced by the fear that a new approach may not deliver better results and could jeopardise current progress. However, as the world undergoes digital transformation, consultancies are catching up, and it is crucial to understand what this entails: a disruptive, ground-breaking change to core processes.
Outdated processes often stagnate growth, as they are high maintenance. For example, reporting. If you are doing it manually, chances are you will spend hours, if not days, first fetching, then compiling, and finally analysing the data. You may have a well-established process you’ve followed for years, but is it an effective use of your time? The answer is no. Especially when there’s a vast market for solutions that can automate reporting for you, collecting and contextualising the data within minutes, thus only requiring you to analyse it. It might not have been available when you first devised your manual reporting process, but it is now. It offers a quicker, more accurate, and overall better method for addressing a repetitive task that can also be integrated into other workflows. Therefore, you should fully replace it with an automated solution and dedicate the time you reclaim towards tasks that require your direct judgement.
Similarly to agencies, it’s uncommon for consultancies to work with only one client at a time. Granted, the number of accounts tends to be lower in a consultancy due to the more holistic nature of their work, necessitating a deeper exploration of various elements. However, these clients are likely to be long-term and maintain constant communication with you. As the consultancy effectively guides the further development of their client businesses, a highly organised approach is essential. This renders project management and its capacity more critical than ever.
Basic Kanban boards and time-tracking spreadsheets that smaller agencies might rely on won’t suffice, even for a consultancy managing just one client. Indeed, returning to the previous section, project management is one of the processes that requires urgent innovation, and consultancies must genuinely embrace it to succeed. It involves more than merely allocating budgets and tasks or forecasting potential risks. While a consultant is not a project manager, they must possess visibility and control over processes such as cost management, expense approval, and several others. We previously addressed project managers with a call to innovate, and we believe consultants could find this just as beneficial.
The award-winning consultancies don’t just embrace technology to reap more data; they also enhance the overall efficiency and quality of their services. A troubling trend we have observed is that while consultants often encourage their clients to adopt digital solutions, their own businesses are not following this advice. This backslides into the reluctance to change core processes, such as invoicing. But what would clients think if they discovered that their trusted advisor is not eager to follow the advice they dispense?
Automating your business processes would make it easier to guide and enhance the quality of your clients' experience. Furthermore, this could potentially help your consultancy scale, as you would be freed from many manual labour tasks. There isn’t a single aspect of the business that couldn’t be automated - from marketing to legal, digital transformation is accessible across all areas of operations. Additionally, it becomes easier to advocate for efficiencies that you have experienced, and you will always have credible samples to provide. As you automate and innovate, you also become more knowledgeable and sophisticated on the topic, which enables you to serve your clients better.
The era of prioritising income generation is over. Nowadays, when both customers and employees have multiple options to choose from, one can no longer expect to succeed through previously effective strategies. Aggressive advertising, lengthy perk lists, or competitive rates do not work in today’s environment. Not unless they are supported by a mindset that prioritises serving people over profiting from them.
Onboarding is more than just bureaucracy. It is your opportunity to create a lasting first impression, clarify expectations, and establish the tone for future communications. An onboarding process that consists solely of document signing is devoid of spirit and provides a shaky foundation for both team and client communication. This is a critical moment that many overlook, failing to recognise its impact on business growth - yet we assure you it plays a significant role in your success. By investing in efficient and thorough onboarding, you equip people for success. For staff, it serves as an effective way to bring them up to speed quickly while educating them on both internal and external communications, thereby aligning them with the rest of the team.
Client onboarding is both similar and different. During this period, you not only communicate how you will proceed and discuss important matters such as requirements for both parties, but also introduce yourself and your team to the client. Consultancy heavily relies on trust—if your client doesn’t trust you, they are unlikely to follow your strategy, regardless of how masterfully crafted it is. Onboarding is where you need to begin forging that trust, primarily by positioning yourself as an advisor with a genuine human interest in helping your clients succeed. Support this with a detailed plan of action, emphasising that you will be there to assist at every step. Just as you would educate a new starter on the tools your company uses, introduce the client to your primary communication channels and other platforms that will be relevant throughout your time together.
The rise of remote work may not have been planned, but it has illuminated many opportunities that businesses were previously missing. This includes consultancies. Due to the extended duration of its mandatory nature, most companies have adjusted their workflows and communication to function outside the office. This means that companies which would have previously avoided outsourcing due to a lack of knowledge on how to manage external and remote staff members are now fully equipped to embrace it. Simply put, this has eliminated location-based limitations when it comes to accessing a talent pool. Depending on the area where your company operates, there may be a very limited number of specialists that your consultancy requires; and given that you likely have many competitors, they are all in very high demand.
Consultancies that grow rapidly are known to be flexible regarding their employees. Most were operating on a hybrid model long before the pandemic began. Whether it involves working with long-term contractors or allowing full-time staff to choose their preferred work environment, flexibility is undoubtedly the key to success. Not only does it allow you to cherry-pick the best specialists from around the globe, but it is also known to significantly enhance individual performance. Fifty-three per cent of surveyed workers revealed that flexibility massively improves their productivity as they can choose to work during their peak times.
You have most likely heard that word of mouth is the best advertisement a company can have. Regardless of the market or the industry, this remains true. Today, we rely on the feedback of others more than ever, and the Internet accommodates that need. Consider the last time you went out to eat—you’ve most likely checked the restaurant’s reviews before making a reservation. Consultancies are no different. This is why you must strive to deliver the best results and experience to your clients, so they can become your advocates. The modern consumer has the power to switch to another option at the slightest inconvenience. This means that even if you are delivering excellent results to your client but are not investing enough effort into communication, they are likely to leave you. Furthermore, it’s part of human nature to remember negative experiences more vividly than positive ones. Therefore, although you might have accelerated their business, their feedback may not meet your expectations simply due to their negative experience.
We’ve observed it repeatedly when consultancies go out of their way to win clients - which, given the competitive environment, is entirely understandable. However, once the contract is signed, the level of their effort tends to dwindle, leading to frustration and making the client feel betrayed and misled. The secret to success is to maintain the mindset you had while trying to bring them on board, even after they begin paying. This creates a consistent experience from the first touchpoint to the very end. If executed correctly, even upon parting ways, the client is likely to recommend you to their business partners or acquaintances, bringing in new leads. In other words, it’s a long game, but the reward is worth it. As long as you prioritise the client’s success over their money, you will always come out on top.
The popularity of consultancies means new businesses keep emerging, saturating the market with even more competition. By the time you finish this article, there will be around 10 new consultancies in your specific niche, ready to snatch your leads and clients. The best way to establish yourself and gain recognition is to be authentic. The world is suffering from corporate fatigue, and the ever-growing competition makes the uninformed approach seem outdated very quickly. Businesses are staffed by people, and every individual wants to be recognised as unique.
This is why, to be successful, you need to communicate your business values and vision consistently in everything you do, even if they differ from the ‘industry norms’. The way you present these values to the world and within your organisation is what defines your business. When you are guided by your company’s unique identity, you will naturally personalise the experience that people have with your consultancy at various stages of their journey. People may not always remember the interactions they’ve had, but they will always remember how those interactions made them feel. Being authentic, therefore, means delivering an experience that no one else can replicate, which ensures that you are remembered.
There are numerous consultancies, making it truly difficult to stand out, and the ‘best practices’ most of them follow certainly won’t facilitate that. While you shouldn’t entirely dismiss industry standards, the key to success lies in adding your own unique input to them. Given the rise and fall of agencies, your end client is well-versed in their needs and expectations regarding services, and they also recognise that they can easily replace you. This is why you must demonstrate to them that you are one of a kind and that you genuinely value them as a client.
This can be achieved by genuinely prioritising their success over their financial gain. Innovating from within will enable you to stay on top of things and gain first-hand experience of what works and what doesn’t, thereby allowing you to provide guidance you are absolutely certain of. The best consultancies don’t just direct their clients towards success; they create the path and then guide them along it.
What makes consultancy successful is the people—both within the consultancy and outside it. The digital tools of today allow you to better know and approach them, creating personalised experiences and meaningful relationships.
We want you to be successful. Let’s talk.