3 Types of CEO. Listened to a podcast interview here of Reid Hoffman sometime ago, but most distinctly remember his comment about the 3 types of CEOs. As the founder of Linkedin, he enjoyed the CEO role at first, but as the company grew, he enjoyed it less and less. Why? Because it was a different job – even… Read More »
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It rained last Sunday in Atlanta. Spent a few hours working on a jigsaw puzzle in the kitchen while drinking coffee and eating chocolate. The good life. Get a good puzzle. Sometimes, you want to do something mindless besides binge-watching Netflix. Yes, yard work is good. A 4 mile run is good. So are old-school, jigsaw puzzles. Easy ones. Attractive… Read More »
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Gap analysis is exactly what is sounds like – figuring out how far you are from a particular goal or target. Consulting firms do this all differently. It takes many forms, but is super common. In fact, I can’t think of any project where we did not include at least one gap analysis somewhere. Nothing fancy. While… Read More »
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We recently asked over 25,000 consultants about their approach to pricing and fees as part of our 2017 Consulting Fees Study.
Below you’ll find the results from our survey as well as my commentary and observations.
The most common pricing structure and approach for consultants is project based pricing.
However, when you combine hourly rate and daily rate pricing (both are often, but not always, driven by number of hours involved) the ‘Hourly’ driven approach has the majority at 41.3%.
Consulting fees based on a monthly retainer equal 15.1% of the total.
43% of consultants who participated in the survey earn $5000 or less per project.
About 15% earn $5,000 to $10,000 per project.
13% of consultants earn between $10,000 and $20,000 per project.
13.9% of consultants charge on average between $20,000 and $50,000 per project.
8% of respondents charge $50,000 or so per consulting engagement and about 6% charge over $100,000 per project.
A whopping 80% of consultants would like to earn higher fees. While about 20% are happy with that they are currently making as a consultant.
The chart represents monthly income.
Almost 50% of all consultants who responded to this survey are earning less than $60,000 per year as a consultant.
However, 22% earn up to $120,000 per year and 20% earn up to $240,000 per year.
A minority of this group currently earns between $300,000 and $1.2M or more per year.
54% of consultants run a high margin and usually very profitable consulting business and enjoy a 60% or greater margin.
The largest single majority, at 25.5%, enjoy an 80% margin or better. Few businesses have such a great margin.
About 22% of consultants run their consulting business at a 30% or lower margin.
23.7% of consultants have been consulting for over a decade. 35% or so have been consultants for over 7 years.
Close to 40% are new to consulting and have been consultants for less than two years.
A large majority, almost 60% of all respondents are based in North America.
While Europe, Asia and Africa being the next largest with about 33% collectively.
The next thing I did was look deeper into the data and cross-reference different categories. Here are some additional insights for you.
Consultants earning over $20,000/mo are split almost equally between project based fees and hourly and daily rate pricing structure. This is the same for consultants earning $10,000/mo or less. On question we’ll look at in a further study is “The intensity and number of hours worked to generate a certain level of income.” I believe we’ll see consultants using a project based fee approach will conduct their work with more freedom, flexibility and less time intensity.
While consultants who try to figure everything out themselves and don’t take the time to really learn how to grow their business the right way or are not committed to consistently implementing are the ones that struggle.
Another interesting finding is that many consultants are earning well into six-figures in their first 1-2 years as consultants. And this study showed that there are plenty of consultants who have been consulting for over 10 years and yet still struggle to create a high-level of income.
Why?
My observation from coaching and working with hundreds of consultants is that those that focus on their marketing and have a clear plan of action are the ones who most often reach six-figures, then into mid-six figures and then create million dollar consulting businesses – and this can happen quickly.
While consultants who try to figure everything out themselves and don’t take the time to really learn how to grow their business the right way or are not committed to consistently implementing are the ones that struggle.
The consulting industry continues to grow as we see the number of consultants who are new remains strong.
What other questions would you like answers to? Let us know and we’ll share them in the comments below or include them in our next Consulting Fees Study.
To all those that participated, a big thank you!
If you enjoyed this study and feel it would be helpful for people you know please click below to share it now on social media:
2017 Consulting Fees Study is a post from: Consulting Success
“That would absolutely freak me out,” my client said.
“Why is that?” I asked.
“Well, because lots of things could happen…” the client responded.
I went on to explain the reasons for considering offering a guarantee. And by the end of our coaching call, my client knew exactly what to do.
You can find plenty of research that suggests the benefits of offering a guarantee. Conversion Fanatics found that adding a guarantee increased sales 26%.
Neil Patel also found that offering a guarantee increased his sales by 21%.
Now if you’re following this discussion closely, you’ll notice these examples are for products, not services.
So, can consultants benefit by offering a guarantee on their services?
Here’s the thing. Don’t guarantee something you can’t control.
Well, let’s consider the example of BBBK, a pest-extermination company owned by S.C. Johnson and Son. In a HBR article many years ago, Christopher Hart shared how BBBK was able to charge ten times more than its competitors and still maintain a disproportionally high market share in the areas where it was operating at the time.
“But Michael, I’m a consultant, not a pest killer,” you might say.
Yeah, I know, but look for the similarity in the situation, not just the differences.
When you open your eyes to opportunity, you will see it all around you.
BBBK provides services to its clients that include restaurants, high-end hotels, and other businesses. Like a consultant, they are serving the B2B market.
One consultant in the big data and analytics space has a low-key guarantee that reads:
“We bring experience in big data and analytics to help ensure that your business can access data for insights that enable better decisions and create value. We guarantee results.”
Another consultant in management gets much more specific with his guarantee:
“My fees are based on your unconditional satisfaction: If you do not feel full value was received, you can decide how much value you received and pay only that or nothing at all.”
And here’s one from a consultant in the engineering space:
“I will deliver the results we agree to. If we don’t achieve them within the timeline agreed, and as long as you’ve followed my recommendations, I will continue working with you to deliver the results at no additional cost.”
Some consultants worry that guarantees are risky and choose not to offer them.
I think that’s short-sighted and a weak reason not to offer one.
Think about it. If your clients weren’t happy with the work you’ve done together, wouldn’t you do whatever you could to ensure they were happy?
Even without a formal guarantee your goal, if you care about your clients, is to always provide them with value.
If you agree with this, it’s as if you are already offering a guarantee but simply choosing not to state it – which means you’re not getting the benefits that doing so provides.
The main concern consultants have is that each project comes with variables that are out of their control. Which means that even if they do their best and perform their work flawlessly, the project may still not be completed on time.
Not necessarily because they didn’t do their part, but simply because something happened with the client or company that delayed or changed the timeline.
Here’s the thing. Don’t guarantee something you can’t control.
You see, a guarantee will help you win more attention, interest, and trust. It will probably create more opportunities to have conversations with your ideal clients.
If your guarantee states that you will complete the project on time and on budget every time, ensure that you also state this is based on the client keeping up with their responsibilities and timeline agreed to.
A guarantee is a two-way agreement you make with your client. Both sides must stick to their obligations for the guarantee to be valid. If a client doesn’t put in the work or implement your recommendations, there’s no way they will get the results you both discussed and agreed to.
Some consultants mistake a guarantee for a contract. The two are not the same.
While you may choose to add a guarantee to your consulting website, you certainly aren’t guaranteeing that it applies, or is offered, to any company in the world.
You see, a guarantee will help you win more attention, interest, and trust. It will probably create more opportunities to have conversations with your ideal clients.
And it is those conversations that will enable you to determine whether the buyer is the right fit and whether you feel comfortable extending your guarantee to them.
If you’re going to offer a guarantee, do it with pride and make it count. Here are x tips to keep in mind:
That is the question my friend.
Offering a guarantee is not a requirement for success in the consulting business.
There are many examples of consultants who do not offer guarantees and run thriving practices.
… and there are plenty of consulting firms that do offer them and do exceptionally well.
So should you offer a guarantee?
It depends. Consider these questions to guide your decision:
If your answer is yes to any of the above, you could benefit significantly by offering a guarantee.
Would you like my help to develop your marketing and messaging together so you can attract your ideal clients and create a marketing system that keeps your pipeline full of opportunities with high-paying corporate buyers? That’s exactly what we help consultants with in our Accelerator Coaching Program: Apply Now
Should Consultants Offer Guarantees? The Answer May Surprise You… is a post from: Consulting Success
The Financial Times wrote a short scathing article on the management consulting industry here. Some valid points, but clearly a quickly assembled article with a Warren Buffett quote and visual used as a wrapper. If you are going to argue that a $133 billion industry is a “curse”, do a good job. Calling consulting a curse is 1) odd… Read More »
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Everyone understands inventory. It’s the stuff sitting on Home Depot’s shelves. It’s the frozen pizzas in the freezer. The unsold house in the neighborhood. The empty hotel rooms and empty movie seats. Non-billable consultants are no different. Non-billable consultants should either be selling new projects, or they are inventory. It’s complex. Inventory can be tricky… Read More »
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“The question that faces the strategic decision maker is not ‘what his organization should do tomorrow.’ It is, ‘what do we have to do today to be ready for an uncertain tomorrow’?” — Peter Drucker This quote is right-on. Without writing a New Yorker-length article, 6 things: 1) Question. Leaders are in the “ask the right question”… Read More »
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“Michael, what’s the best way to get more clients?” is a question I’m often asked.
While many online ‘gurus’ will try to convince you there is a BEST way to get clients, there isn’t. They want you to believe that whatever they are selling is the only way to grow your business. It isn’t.
The best way to get more clients is to figure out how to get in front of them – effectively and consistently. Ultimately, the ideal scenario is to ensure your ideal client sees you often and wants to talk to you.
You need to take three crucial steps to ensure you get that conversation with your ideal client.
You want your strengths and passion to align well with the way you get in front of your ideal clients. It should work for you, not against you.
Don’t worry about doing these steps perfectly right off the bat; the key is to take action and move forward with them NOW.
Here are the three:
I. Establish Ideal Client Clarity. The most successful consultants understand who their ideal clients are and who they aren’t. They establish clear criteria for identifying who their ideal clients are and focus only on these people.
This is critical, because once you have clarity on your ideal client you can move to the next step.
II. Create a Magnetic Message. You can do all the marketing in the world, but if your message doesn’t resonate with your ideal client your marketing will suffer.
So, after establishing clarity on your ideal client, develop a message that gets the client’s attention. Your message must resonate with them and make them want to speak with you to learn more.
III. Devise a marketing plan to suit your abilities.
Some consultants jump from one shiny object to the next. They ride the latest trend when it comes to marketing. But just because someone says “Facebook ads are the best,” doesn’t mean they are right for you.
The critical issue here it to come up with a marketing strategy compatible with your strengths and passion. If you dislike speaking, creating a marketing plan with a focus on speaking probably isn’t going to get the results you want. You won’t be excited; you will postpone it, which means you won’t take as much action as you should.
Instead, figure out what you are good or great at and build your marketing on that platform.
Second, it’s critical the marketing tactic you choose will work with your ideal clients. Suppose your ideal clients are 70-year-old executives in Japan. Although you might love doing webinars, using them with such seniors could extinguish your clients’ interest.
You want your strengths and passion to align well with the way you get in front of your ideal clients. It should work for you, not against you.
Now, if you’ve worked through these three points, the next thing you’ll want to consider is what type of marketing is going to be most effective for you.
Here are six ways to market professional services that not only will help you to land more clients, but will also build your authority in the marketplace.
Writing a blog is a great strategy if you’re willing to make the commitment. It takes time to write and it can take time to see results from doing this.
View it as a long-term investment in your business – one that will pay great dividends if you’re willing to put in the work and give it some time.
This has been great for us at Consulting Success. We have over 900 articles on this site, and attract almost 50,000 people to the site every month.
Some of these people will become clients and we will work with them, in some cases for many years.
When it comes to marketing, I love using leverage. A great example of this is trade publications.
Almost every industry has multiple trade publications. Some are association newsletters; others are formal magazines, journals, even websites.
The benefit is that many trade publications have hundreds, thousands, and sometimes hundreds of thousands of readers, so a trade publication’s market reach can be phenomenal.
If you enjoy interacting with a room full of ideal clients, speaking can be an amazing approach to win more business.
Even if you don’t have your own list, even if you’re unknown in the greater marketplace, writing for trade publications can put you on the map.
The key here is to identify the publications that have a readership made up of your ideal clients.
I’ve helped many clients in our Accelerator Coaching Program develop a plan to get featured in their own industry’s trade publications.
This has quickly led to them being seen as an authority, and has generated many inquiries for their services.
Webinars are a very powerful and effective way to connect with many people at one time.
Your webinar attendees get to learn from you live and are able to interact.
This takes authority building to another level because not only do you have the chance to teach and share your expertise; you form a stronger bond with attendees because they feel closer to you after hearing your voice on the webinar.
Setting up a webinar is easy. There are many great services you can use, such as GoToWebinar, Zoom, even Google Hangouts.
The other benefit of webinars is that you get to do Q&A with attendees. This is a great opportunity to learn what your ideal clients care about and can teach you a lot about adjustments and improvements you may want to make in your marketing and messaging.
Here’s a tip when it comes to webinars. Don’t conduct them only for your own audience or list. Find associations, organizations, bloggers, and others who have an audience comprising your ideal clients and offer to do a webinar for them.
Leverage is created because this approach is one-to-many.
If you enjoy interacting with a room full of ideal clients, speaking can be an amazing approach to win more business.
Many industry associations, non-profits, and other groups are looking for someone who can come in and speak to their members. Most libraries can provide access to Associations Unlimited, a service that searches and finds local, national, and international associations.
You can speak to make money, but a great approach is to use speaking as a marketing tactic. Even if you don’t get paid to speak right away, speak for free, because as long as your ideal clients are in the room, your talk will power up your chances of winning significant business.
To get started, list all the organizations and groups your ideal clients belong to or in which they participate. Then reach out to each organization and find out the opportunities they offer for you to speak.
One of the most effective and least used approaches for getting in front of ideal clients is to go direct.
Identify who your ideal clients are, compile a list, then get their contact information.
Once you have that, you can start reaching out.
Your outreach shouldn’t focus on selling. Rather, it should position you so you appear on your ideal clients’ radar. Once they know you exist, they will be more inclined to speak with you. But don’t stop there.
To ensure success with your outreach plan, continue reaching out to your ideal clients and share valuable materials and information with them.
These materials support your expertise and authority. And doing so keeps you top of mind.
With this approach, you don’t have to spend months or years developing content and waiting for your ideal clients to come to you. Reach out to them in a way they appreciate; a way that will attract their interest in hearing from you and seeing what you have to share.
We help clients in our Accelerator Coaching Program for Consultants with this approach and have fine-tuned it so the marketing and outreach can be automated to a degree. This will save time and ensure your marketing always works for you, even if you’re busy delivering on a client project.
One of the best ways to attract more business is to focus on your existing clients and do everything you can to help them achieve great results.
If you focus on serving your clients, they will appreciate you. They will want to continue working with you and will be much more likely to refer others to you.
They will also be more open; in fact, they will be happy to have you ask them for referrals.
How do you develop relationship capital? Start by having a long-term mindset. Recognize that in this (consulting) business, everything is about relationships.
Make your clients your number one priority, and always look for ways to add more value for them. See yourself as a partner in their success.
When you do this sincerely and genuinely, your relationships will become stronger and your business will gain momentum. It will naturally attract more ideal clients like your current clients, and you will receive more referrals.
You don’t have to engage all six of these marketing tactics to have a thriving consulting business. You can use one and be successful.
Whichever one(s) you choose to focus on, commit to them. Choose excellence over mediocrity. Avoid jumping around from one to the next just because you see or hear about something new.
Marketing your consulting business and getting clients doesn’t have to be hard. It certainly doesn’t have to be complex. Keep it simple. Stay focused and implement.
If you’d like help in developing a marketing plan specifically for your consulting business, apply for the Accelerator Coaching Program for Consultants. We work with a select group of consultants to help them improve their marketing strategy, attract more clients, increase their fees, and grow their business. Apply Now
6 Ways to Promote Your Authority and Get Consulting Clients is a post from: Consulting Success
