Every consultant must understand the fundamentals of sales
I'll be honest, in my earlier consulting days I didn't have much time for the sales people in the consultancy that I worked.
They were always lauded as the most important people in the business - heck, they even sat on a mezzanine floor overlooking the lowly consultants. The necessary evil required to turn sales into actual cash through delivery.
It was only once I started my own consulting business that I realised just how important and how valuable the role of sales is. And how challenging it can be!
I still don't think sales people trump consultants in importance. It's more of a symbiotic relationship. Two-sides of the same coin.
Of course, if you're a solopreneur or a micro-business, the chances are you're doing both sales and delivery. Oh, and probably marketing too.
Back in my days as an employed-consultant, I understood the role of marketing even less. It didn't occur to me that marketing led to sales, as dumb as that sounds! That was primarily because, in the firms I'd worked in, they didn't really do a whole lot of marketing.
You can recognise firms like this because they say things like, "We're the best kept secret" as though it's a good thing!
The truth of the matter is, without marketing there can be no sales. And just as important if you only focus on winning work through referrals and repeat business.
Anyhow, we're not here to talk about marketing. We're focusing on the next step in the process - Sales.
The 5 most common sales mistakes
Sadly, the vast majority of consulting businesses are surviving on fewer clients than you can count on one hand.
And those with more clients often find that half of their revenue, or even much more, comes from just one or two.
It's through marketing that you generate leads. But it is through sales that those leads become prospects and ultimately, clients.
Having been in the consulting industry for over 20 years, I see the same mistakes being made in sales time and time again.
So tell me, do any of these sound familiar to you?
I know, I know, small firms can be very enjoyable to work with. Especially start-ups.
But here's the rub. They don't have: a) any money, or b) much opportunity for follow-on work.
And it's the latter that is the biggest problem.
You see, the amount of effort it takes to sell to a small business is really no different than it takes to sell to a large business.
Yet with a medium to large-sized business there's much greater chance of follow-on work.
In fact, for my largest clients I've been consulting to them for over 15 years! The smaller firms tends to only provide projects that last a few months.
Not only that, but smaller firms tend to want a pound of flesh and more. They can be really challenging to work with. That's because they don't see your engagement as an 'investment'. Instead they see it as a 'spend' from their own back pocket.
So, if you're serious about scaling your consulting business, you need to be shooting for mid and large-sized clients!
I'm sure you've heard it before. "Can you just pull together a straw-man project plan for us, then we discuss it in the pre-sales meeting?"
Yes, sure, I love nothing more than working for free!
In fact, this scenario happens a lot more frequently when you're pitching to work as a sub-contractor.
You need to understand the value that you provide as a consultant, and that value needs to be paid for.
You can charge for such requests as part of scoping exercise that can be discounted off of the bigger piece of work. What you shouldn't be doing is giving away the intellectual property value that you spent many years obtaining!
The consulting sales process is all about understanding the client.
Knowing what their current situation is, and what outcomes they're seeking.
It's only once you get back to the office, process this information, then consider your approach, can you even start to think about the levels of effort involved.
Now, it might be that the thing you consult in is very formulaic and you can very accurately estimate the likely fees. If that is so, then you might choose to give the client an indicative idea.
The trouble is, whatever you say when asked, "How much is this likely to cost?" will be set in stone, no matter how much you caveat it.
The challenge you then have is if, once you've determined your effort, there is a big variance either up or down from your indicative fee.
So contrary to popular view, giving an indicative fee increases the risk of losing the engagement later in the process.
I'm going to be blunt here. Selling on T&M is unethical!
Because it incentivises you to work on an engagement as much as possible, whilst your client is encouraged to get you to work on their project as little as possible.
In short, it sets you and the client up to oppose each other!
Often, T&M is a sign of laziness. Rather than really getting to understand the client and their challenge in the sales process, instead you rush to get to the close and offer a simple T&M solution.
T&M does have its place - for example, as an initial scoping exercise when it's not clear what work will be required. But otherwise, it should be avoided and fixed fees used.
Ideally, a value-based fixed fee, or an Outcome Fee as I like to call them.
Look, as far as I know, there's never been a client in history who didn't say that their requirement was urgent!
Urgent, that is, right up until the point that they have to sign it off!
The mistakes that I see many consultants make is to get the proposal in and completed as soon as possible.
The problem with that approach is that you create a reaction similar to when you go shopping!
Let me explain. You walk into a store, you see a nice jumper, then the first thing you do is to look at the price. From there you then decided if the look and feel of the jumper warrants the price. Gone are any thoughts on what the jumper might do for you - how it will make you feel, whether it will keep you warm, whether it's suitable for the event that's coming up and you're going to.
Your only focus becomes on justifying the price.
This is exactly what happens when you price an engagement before the client is emotionally (and logically) bought into the outcomes that you will be providing.
I teach a specific sales process that's all about slowing down the sale.
Getting the client bought into the outcomes that you're going to provide first, and only then determining what your fee will be.
You need to negotiate first on the project scope. What you're going to do, what the client's going to do. Up until that point, you risk putting in a fee that is significantly overbid or underbid.
And you're just as likely to lose a project from underbidding as you are from overbidding.
Rushing the consulting sales process is counter to a successful engagement.
The more time you spend focusing on understanding the client's challenges - whether positive or negative - and their desired outcomes, the more easy it is to determine a fixed, value-based fee. And the more likely you are to successfully close the sale.
Engagements are won primarily on how well you demonstrate an understanding of the client's wants and needs, and convincing them that you can provide the desired outcomes. They are seldom won on being the quickest to submit a proposal!
Once you understand the value that you can provide, you can then set a much clearer brief for the delivery process. This comes full-circle as you'll have great evidence to create a powerful, client-focused case study in support of your marketing efforts.
So we can see that the sales process is an absolutely crucial element to many other aspects of running a consulting business.
Of course, within the process itself is the pricing of an engagement. Setting your fees.
Too many consulting businesses have limiting beliefs and views that there is this thing called a 'market rate'.
There really isn't.
You must structure your fees with not only an outward facing, client-biased approach, but you must also be inward-facing. You need to know what your minimum equivalent day rates are to break even, and to hit your revenue and profit goals.
If you don't know these, how can you possibly define meaningful fees?
Success in B2B consulting sales is not just about your win ratio.
It's about ensuring that you can deliver and meet the profit expectations. This is not solely a responsibility for the consultants charged with delivery.
Even if you're a solopreneur, you still need to be aware of your profit on sale versus your profit upon delivery.
The Sales Mastery programme focuses on implementing an end-to-end sales process that ensures you can successfully close outcome-based fee deals. And that those engagements have a high likelihood of resulting in high profits.
The programme consists of 8 modules, as follows:
The Sales Mastery programme is designed for you to work 'on' your sales process with the aim of improving your win ratio, and spending less time engaging with tyre-kickers.
The programme consists of four components:
These components have been designed to overcome many of the failings we've experienced ourselves in training and coaching programmes. Specifically, to overcome the general ineffectiveness of online courses, the programme includes a weekly group coaching call.
If you have an existing B2B consulting business and you have landed clients...
If you are about to start your consulting business and are yet to land any clients but want to know how to effectively take them from lead to prospect to client...
If you are currently, or would like to, sell your consulting services to medium and large businesses...
If you are prepared to get face-to-face with your clients (this programme is NOT for online-only businesses)...
...then this programme is for you!
(Total cost is £1,791)
Unfortunately, the term 'Consulting' is vague and ill-defined. Often it gets confused with the term 'Coaching'.
We have a firm belief that, whilst the activities of a consultant and a coach may be similar at times, a consulting business is very different from a coaching business.
To enTo ensure absolute clarity, we created our Manifesto to layout the aspirations required for our courses to be of benefit to you.
The Sales Mastery programme is aimed at three groups of people:
The Sales Mastery programme is for business-to-business consulting businesses that aim to sell their services to medium and large businesses. You don't have to be just yet, but that must be your aim.
The course is not suitable for consulting businesses that only sell to consumers, or for those people looking to work from their laptop on a beach!
In my quest to build successful consulting businesses and teams I've tried every approach to making a sale that you can think of.
In the Sales Mastery programme we only teach what we've proven ourselves to have worked in the real-world, not a laboratory.
It's based on fact and real-world application selling consulting to mid and large corporates as consulting businesses from 1 to tens of thousands in size. The course is created by an active management consultant who is selling to some of the world's largest firms in their respective sectors. It's not created by someone who's just a business coach, and only really has experience selling to solo, micro and small businesses.
We do still love theory and new ideas, but we test them first to prove them before we train them.
That's why you won't hear us make unsubstantiated claims.
I never liked the term homework when I was at school, let alone now I'm an adult!
But in short, if you want to get the most out of this programme - and truly gain a return on your investment - then you must complete the work. It stands to reason.
It's up to you how fast you progress through things, but like anything in life, the more you put in the more you'll get out of it.
Yes. Recording of the group coaching calls are made available.
No-one needs another shelf ornament!
Everything you need while you’re in the program is accessed in the private member area online.
The benefit of this to you is that, for as long as the materials are available, you get access. That includes updates created after your 8-weeks in the programme.
If we’ve missed anything, or there’s something you need to know, then send us an email at: firstname.lastname@example.org
Creator of Consulting Compass
Hi, I'm Martin. I always knew I'd run my own consulting business one day.
And after nearly 20 years of being an employed consultant, I went out on my own.
If only I'd have known how hard it really would be!
Anyway, 5 years on and I was still in business, despite there being so much conflicting information out there about how to run a successful consulting business.
That's why I created the Consulting Compass framework. To teach people what I believe and know is the best way to start, run and grow a successful consulting business.
Copyright - Consulting Compass