I've been giving this some thought for a stretch because right now management consultancies, regardless of industry, have at best a static pool customers (vs. a growing # of customers) with, again, at best, a fixed budget for outsourcing certain strategic activities to management consultancies.
At worst of course is a scenario where budget for that type of outsourcing is (or has been) reduced.
Assuming that the "pie" of revenues(mix of existing new & existing business) is not growing folks need to look at the marketing and biz dev component of their business as winning away customers from the competition.
There is really no other alternative when market conditions are showing stagnant or shrinking top-line growth.
The key selling point to customers for management consulting firms is that an org gains a high value added strategic (and/or tactical) partner.
Your business model must reflect that to the customer.
Historically consultancies will typically scale their business while marketing the value based on the equity holding partners who are usually the most experienced and hand off components of the client projects to junior partners who work for relatively small monetary rewards (relative to the partners), yet this practice winds up diluting the high value add value proposition.
Recently I've looked at some regional consultancies biz models and wondered how they sustain themselves..
Well, I think I've answered my own question !
Here's what needs to happen in this climate to win business:
Reduce number of junior partners the firm retains when project needs allow for it.
Equity partners get involved at the tactical biz dev level
Sr. Partners (equity or otherwise) pitch recommendations in appropriate client facing scenarios
Monitor scale of projects the firm takes on; if required leverage existing pool of junior partner relationships for those expanded client engagements.
Push your firms competitive advantage relative to industry niche
Refine or use creative pricing structures to entice new business and attract existing clients to provide additional project work.
At any rate, those were my thoughts on one or another bike ride last week..
Let me know if I can flesh this out differently, better, etc.
Wednesday, March 25, 2009
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1 comments:
I think this is by far the most important element: "Push your firms competitive advantage relative to industry niche." All the rest are secondary. I can see firms channeling money into their marketing department to come up with a way to create more profit without having to improve their product, but marketing works best simply through delivery of product to the consumer - identifying what the customer wants. If marketing strategies aren't immediately profitable, then just go back to the senior partners (or equity) and have them (re)define the product.
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