| The 2024 edition of trends boutique consultancies should keep in mind has been published. Access the 2024 edition here. |
A new year gives consultancies an excellent opportunity to review their client work over the past year and brainstorm how to adjust their business development strategy to grow moving forward.
I have spoken to 100+ consulting leaders in 2022. I also hosted webinars, received countless emails with questions from individual consultants, read thought leadership content by consultancies, reviewed business plans of firms both small and large, and audited the positioning of 30+ consultancies and worked with those consulting firms to improve their positioning and business development in the market.
Here, I’m sharing the 10 most pronounced trends that I’ve observed in my projects, research, and audits. I urge consulting leaders to pay close attention to these trends – they can make or break a consulting business.
Here we go!
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A Consulting Trends Workshop for your consultancy? Would you like me to talk to your consultancy team, colleagues, or leaders about these trends and how to deal with them? I am conducting many workshops for consultancies to help them deal with these consulting industry trends. Booking inquiries via info@thevisibleauthority.com. Looking forward!
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#1. Business development in consulting is rooted in educating the target audience
#2. Consultancies embracing digital new client generation will grow faster
#3. Consultancies with weak positioning are less profitable
#4. Buyers’ behavior, habits, and expectations are shifting
#5. We have entered an era of deep specialization
#6. Clients want trustworthy consultancies that can deliver quick wins and long-term results
#7. Consulting leaders can no longer avoid actively participating in marketing
#8. Consultancies neglecting former and existing clients will struggle with poor marketing and business development ROI
#9. Legacy reputation and brand recognition will continue to fall in importance
#10. Consultancies using self-centered language will lose opportunities to those using client-centric language
“Thought leadership” is used too often to label any piece of content produced by a company or its employees.
In fact, 71% of executives say less than half of the thought leadership content they consume provides any sort of valuable insight.
Not all content is thought leadership. And not all thought leadership content generates the same ROI and business development results.
So what do decision-makers look for in thought leadership content? It’s quite simple, really. They are looking for answers to questions that keep them up at night. According to research:
Decision-makers are looking for evidence that the solution to a problem has worked – i.e., case studies. According to a study, this is the #1 most important criterion in B2B thought leadership. The depth of knowledge about the problem and how to solve it is #2.
As I explain in one of my articles, the way senior executives buy consulting services has changed. Above all else, they are looking for solutions that have proven to work, delivered by those with deep expertise.
The most powerful way for consultancies to communicate their capabilities to prospective clients is by consistently producing educational content that goes to the heart of the pain points of their target audience.
This content – in the form of blog articles, case studies, speaking engagements, webinars, podcasts, email campaigns, LinkedIn posts, etc. – should provide the kind of insights that only someone with deep expertise can uncover.
What’s more, this thought leadership content should inspire action. It should inspire the readers – the target audience – to change their pain-ridden status quo to reach new business horizons.
Recommended reading: Without Thought Leadership, Consultancies Will Fail
Digital marketing in consulting will continue to grow in importance. It’s not just a trend. It’s the reality we all live in – as consumers and as B2B buyers.
The sooner consultancies accept and embrace it, the sooner they can set up a digital footprint that delivers business results.
I always remind consultancies of the 90-80 rule. Nine out of ten service buyers will actively do their own research on a consultancy and its consultants. Unfortunately, eight out of ten firms automatically get rejected because their digital footprint does not point to a desired level of expertise.
The top three methods of finding consulting firms are:
And what does the general web search often start with? That’s right, with decision-makers googling their problem.
Consultancies that fail to produce relevant, authoritative, narrowly-focused content regularly will go unnoticed by Google’s algorithm.
And, in this day and age, if a business does not show up on Page 1 of Google (or, at the bare minimum, on the first 2-3 pages), it may as well not exist. 95% of all traffic is cannibalized by pages displayed on Page 1 of the search engine.
It’s no wonder that keyword research and search engine optimization is the second most important tactic utilized by high-growth consultancies.
Consultancies that neglect digital marketing? Well, they will never get out of the vicious downward spiral, always trying to play catch-up, desperately offering discounts, cold-calling prospects, and struggling to build a reliable pipeline of work.
Whether it’s service buyers doing their own search, coming across relevant consultancies, hearing recommendations from peers/colleagues, and then looking up that firm or consultant on Google and LinkedIn, it all leads to the same road – the digital space.
Consultancies must be acutely aware of what their digital presence – or lack thereof – tells their target audience: does it help prospects understand the depth and relevance of the firm’s expertise and/or does it encourage prospects to continue reading/listening/watching the advice or makes them close the tab in 5 seconds?
If consulting leaders want to be serious about growing their consulting business and starting to attract ideal clients in a more consistent and predictable way, they will have to get comfortable with digital marketing and business development. We live in a new digital-first consulting world (versus network-first). And this will not change anymore.
In 2022, clients were offered discounts by consultancies in 80% of the cases. In 2019, that number was 66%. Clearly, too many consultancies struggle with their positioning and business development efforts.
The thing about discounts is that this practice devalues a consulting firm's expertise and trains prospects and former clients to expect it.
What do consultancies that offer discounts have in common? Weak positioning.
Positioning is a company's place within a marketplace. It’s a statement, the way it is perceived on the market, and the parameters the consultancy sets for their own work and engagement with clients.
If it’s weak, there is a disconnect between what the consultancy does, how it markets the services, and to whom it markets these services. Competition is fierce. Consultancies that can’t differentiate themselves with laser-sharp positioning have no choice but to compete on pricing.
On the other hand, strong positioning makes it instantly clear to prospects whether a consultancy is a good fit for their needs.
Recommended reading: A Consultancy's Positioning Has the Single Biggest Impact on the Buying Decision
In one of my articles, I highlight 14 symptoms of poor positioning. They include things like:
What is the secret of highly successful consultancies? It’s their unwavering commitment to their strong positioning. They know exactly what they do well, who will benefit from their services, and how to show their expertise and the ability to deliver results.
These consultancies relentlessly say no to all irrelevant opportunities. They are extremely protective of their time. They decrease their costs by increasing efficiency, which comes from repetition, which comes from a narrow focus, which comes from laser-sharp positioning.
When it comes to profitability, there are many stats flying around. For example, according to this one, the average annual gross margin for consulting firms in 2022 was 53.6%. In my experience, that number is between 60% and 80% for highly successful and well-positioned consultancies!
This level of success can’t be achieved by consultancies that have internal and external misalignment – which is what inevitably comes out of weak positioning, and it often originates (and gets worse over time) from internal vision differences amongst the owners or partners
Marketing and sales are not communicating the same message as consulting leaders and individual consultants. Marketing or business development campaigns are not aligned with thought leadership pieces. Clients have no idea how to best recommend a firm.
A boat where every person paddles in a different direction doesn’t stand a chance of outperforming one where the force of every team member is directed towards a unified goal.
And I’ve seen it time and time again, internal positioning misalignment translates into substandard profitability.
Recommended reading: How Consultancies Can Get Started With Value Proposition Design (Without Getting Overwhelmed)
Decision-makers who purchase consulting services are increasingly resembling B2C buyers.
They google questions related to their pain points, consume content to better understand improvement opportunities, and read up on the “social proof” (review in B2C, case studies in B2B). They look for targeted solutions to very specific problems. They expect to be able to find all the necessary information online.
63% of buyers report that the pandemic had increased the number of people involved in an average purchasing decision.
As mentioned in the first trend here, they look to their peers and colleagues for recommendations. They conduct independent online research. They listen to expert presentations or podcasts and draw conclusions on a consulting firm's level of expertise and overall trustworthiness.
Consultancies that fail to adapt to this shift in buyers’ behavior and expectations will see constantly decreasing returns on their marketing and business development investments. Here are just a few examples:
It is crucial that consultancies pay attention to these evolving habits of their target audience. This understanding will allow them to build the right exposure and maximize it on the right channels.
Recommended reading: Consultancies Must Rethink the Way Their Prospects Buy
All major businesses in all major industries are suffering from all-time complexity in combination with a critical lack of the required internal expertise and no immediate availability of these experts on the distressed labor market.
The business challenges have never been so strenuous (to name a few):
Growth setbacks have started to surface almost everywhere due to considerable expertise gaps without a short-term solution perspective due to labor market shortages.
All these tormented businesses are looking for external expertise. The stress is huge, the pains are fierce. Businesses are desperate and often have no choice but to turn to specialized consultancies for support.
The hardships of the last 2-3 years have highlighted buyers’ emphasis on fast and predictable outcomes of working with a consultancy. They have very specific problems they want urgent help with. And it typically calls for deep expertise.
Recent research concluded the importance of industry knowledge and deep subject matter expertise (the 2 most important selection criteria, says this research) rose by 7% between 2020 and 2022. The importance of relevant experience and past performance rose by 4% in the same time period.
It makes sense, too. As consumers, that’s exactly how we behave. More often than not, if we need to have a washing machine fixed, we go to a repairman specializing in washing machines, not a handyman. If we have dental pain, we go to a dentist, not a GP. If we struggle with money management, we go to a financial advisor, not a life coach. We want to put our time and money towards stronger, more guaranteed results.
B2B buyers expect the same. 60% of organizations report lacking specific specialist skills. That means they will often fill in these skill gaps by going to consulting firms. Specialist consultancies with strong positioning and reputational footprint will be the first in line for these projects.
Consultancies need to fully grasp all the details, the background, context, relationships, characteristics, frequency, volume, the typical stakeholders involved, etc., of the critical pains of the target audience (in its narrow domain expertise).
For those who cover multiple expertise areas (keeping the options open out of fear of losing income), that’s totally impossible to accomplish, and prospects will ‘smell’ this quickly.
Specialist consulting firms can achieve stronger financial success and here’s why:
In the end, this sustainable profit builds the self-confidence and the belief of the consultancy to protect the narrow focus (read specialization) and provides the funding for continuous investment in the development of inspirational content and education (see trend #1).
When I talk to real, profound experts in consulting - consultants who have gone deep in their focus and expertise - they no longer feel the pressure of choosing between variation in the work or depth. Depth, they keep telling me, is their utmost variation.
Better profit is the ‘side-effect’ of specialization. While simple in principle, it requires strong discipline, deep commitment, and the ability to focus single-mindedly on a narrow area daily.
Recommended reading: Why High-Performance Consultancies Are Obsessed with Specificity
According to a study by Grist, 19% of executives are now zeroed in on the next 3 months, and 38% have their sights on the 3-12 month period.
This shorter time horizon has inevitably led to a shift to shorter selection lead time for new consulting companies (less patience) in combination with a much stronger focus on selecting visible experts with well-established social proof in their market or industry.
Clients are looking for consulting firms they can trust. They want to work with firms that can help them create an impact on the bottom line. They are looking for a fire-proof way to (internally) justify the investment into consulting services.
Buyers trust consultancies that clearly display expertise and the ability to achieve meaningful and proven results before they even engage with these firms.
Buyers don’t want to be sold. They don’t want to read or receive sales materials that say generic, pompous things like “We supercharge our clients to reach maximum performance levels.”
They want consultancies that understand the buyers' issues on a deep level. The ones that can place these problems in a larger context. The ones that have successfully implemented transformative projects for similar clients in the past and are freely sharing those success stories (including the ‘how’) in their communication.
Buyers want to see immediate results.
Tough economic times increase the scrutiny and accountability for every investment. Clients are under tremendous pressure to justify their spending on consulting services almost instantly. Of course, I’m not talking about results over a few days. But it is important for consulting firms to be able to show the difference their services make within a few weeks or months.
Buyers want to be set up for long-term success.
They don’t want services that put duct tape on a pipe that needs replacing. When they hire consultancies, even for short-term projects, they want a permanent – or at least long-term – improvement to their status quo.
As Source puts it, “This drive for faster, better consulting solutions is leading clients to classify consulting firms differently, a trend we believe will continue into 2023”.
That’s why it’s more important than ever that consultancies keep their ideal clients’ and these clients’ needs in mind in all their external messaging.
In 2023, consultancies that want to match their messaging to the expectations of prospects will replace websites that go on and on about how amazing their expertise is with ones that talk about the specific pain points they help address and how they do it.
It’s time for consultancies to stop with the useless bragging and embrace more educational, inspiring content.
Recommended reading: The Single Biggest Mistake Consultancies Make: Talking About Themselves
Consulting leaders must increase their engagement in marketing and business development activities.
81% of buyers want provocative insights that challenge their assumptions rather than validate their current thinking. Marketers simply can’t deliver that. They do not have the same level of expertise in the field as consulting leaders and individual consultants in a firm. It’s not their job to have the same depth of expertise.
A consulting firm can hire the most brilliant marketers or content writers who know SEO best practices, are fluent in various marketing automation technologies, and can efficiently manage social media accounts.
But, if consulting leaders are not driving marketing efforts by providing them with their leading thinking, the marketers are only getting set up to fail.
Recommended reading: Consulting Leaders, Stop Outsourcing Your Thought Leadership Responsibility to Marketing!
The new archetype consulting firm, openly sharing its expertise, doesn’t worry about making money but about educating its target audience to help them solve their problems (see also Trend #1). The result of not worrying about money is that they will make more money in the end.
Consulting leaders will need to step up in 2023 and get in the habit of sharing their leading thinking and the expertise of the firms/practice in a consistent manner.
They will need to work with the marketing teams on developing content calendars and promotional channels. They will need to lead by example, encouraging their team members to share their collective expertise in a way that educates the audience and inspires them to take action.
Recommended reading: Shaping Your Consultancy’s Thought Leadership To Accelerate Growth
I noticed that most consulting leaders dislike social media. Social media are an incredible medium to build trust in the consultancy’s expertise.
Consulting leaders tell me: "I can’t do that, I don’t have the time, I don’t know what to write about."
You know what? It’s like driving a car and not fueling it up because you don’t have time or you don’t like doing it. Your car will get stuck. Right?
If consulting leaders are not investing time and energy in developing and sharing educational content on social media or other distribution channels, they will soon be outperformed by their social media-savvy competitors.
The best consulting leaders from the new school consulting firms will be multi-platform educators, dramatically raising the awareness of the transformational improvement opportunities of the critical pain points of their target audience.
Marketing or external content writers are maybe great at rephrasing already accepted opinions but awful at spotting non-obvious insights that create radically different thinking. That’s the role of the consulting leader.
Only 12% of consulting firms have a fully implemented sales referral strategy, with those that do grow much quicker as a result.
How is that even possible? Aren’t we all aware of the fact that it’s significantly more expensive to recruit a new client than to keep a new one?
It costs 5x as much to attract a new customer than to keep an existing one. The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20%.
The fact that retaining clients and going after referenceable work is not a #1 business development priority for consultancies is mind-boggling.
“But I just don’t have time! Between lead gen and actually doing my job, when could I develop a nurture strategy?” That’s a typical response of consulting leaders.
Client retention and staying on top of past clients’ minds is not complicated. Consultancies must give former and current clients the chance to hear from them regularly by unlocking their inner teacher and never stopping giving valuable lessons.
Consulting firms should start producing educational content and then sharing it with their past and current clients – newsletters, individual emails, social media posts, etc.
Recommended reading: Why Do So Many Consultancies Neglect Former and Existing Clients? That’s Where the Money Is!
So much can be achieved in business development by keeping former and existing clients in the loop to nurture them.
An email list should be one of a consulting firm's most cherished marketing assets. This tool stood the test of time and generates the highest ROI of all marketing platforms.
However, the success of building and utilizing an email list varies from business to business. When consulting firms focus on quality and on sharing content that educates their audience, their email lists can generate superior results in the long run.
Quality should be in the thought leadership pieces consulting firms deliver to their contacts – authentic, with real insights, addressing key pain points of their target clients. These insights should be shared freely and regularly with former (and don’t forget former clients who changed jobs), existing, and future clients.
Consultants always wonder why I am talking about ‘nurturing existing clients’. The saying goes: they are already our clients, why should we nurture them? Well, it’s pretty easy: it’s good client management to structurally (not just between two project meetings) keep them in the loop of new findings, the latest research, new technology evolutions, recent case studies, etc. And, of course, it’s about possible upselling, cross-selling, or just plain retention management.
Many firms have been taking their visibility for granted. And they shouldn’t. The perception of a highly visible firm fell from 23.1% in 2020 to 14.6% in 2022. And it will continue to fall.
As I highlighted in Trend #4, buyers’ behavior and expectations are shifting. They are less impressed by how recognizable a consultancy’s brand is and more by the results a firm can demonstrate it can achieve.
As highlighted in Trend #6, buyers also seek proof of the consultancy’s ability to deliver outcomes. Brand recognition can only go so far.
Add to that the client-hungry, digitally-savvy competitors in the form of boutique firms that pop up daily. The ones that generously share their knowledge. The ones that engage their target audience through thoughtful pieces full of actionable insights and recommendations.
Brand awareness remains essential and is a great marketing and business development support. However, brands don’t solve problems, and consulting firms' ability to rely on their legacy reputation and brand awareness to compete against these ruthless, expertise-led (versus brand-led) newcomers will only decrease with time.
Expertise-led (bottom-up) is how differentiation gets created in consulting. Brand-led (top-down) is how awareness for that differentiation gets strengthened or scaled.
To quote an HBR article, “Vendor websites can strongly influence the search. Buyers at the research stage want to see an informative, easily navigated website, and have little patience for sites that fall short.”
The buyers are impatient. They have no time (or desire) to spend more than a few minutes glancing through a consulting firm’s website or documentation.
And the sad reality is that most consultancies’ websites suck. Big time.
Consulting is a competitive, trust-based business. Consulting firms need to have darn good websites with a proper structure, unparalleled proof of expertise, and influential educational content.
And most of all, these websites should organically generate demand for the firms' (focused and publicly announced) expertise.
It shouldn’t be a big ‘We-we-we’ show. It should be laser-focused on the pain points of the target audience. And that applies to every piece of communication outside of the website – thought leadership pieces, LinkedIn posts, pitches to prospective clients, speaking engagements.
Every piece of content should use client-centric language.
Most consultancies make the big mistake of telling their prospects an inside-in story:
It’s all about bragging about their so-called unique expertise, unique service, unique blah blah blah.
Here are just a couple of the MANY examples from consultancies I came across this year (the inward blah blah always starts with ‘WE’):
I urge consultancies always remember that buyers do their research at the expertise and problem level, not at the level of this inward braggy language! The buyer never ever researches or asks industry peers, ‘do you know a consultancy that can help us to unleash the power of our workforce?’!
The simple fact is: It’s not what consultancies think it is but what it does to their client.
To get the attention of prospects browsing through dozens of websites and thought leadership pieces as they try to identify the right consultancy is to show a profound understanding of their pain points and the level of expertise needed to address them.
No one is interested in self-centered, self-promoting bragging.
Recommended reading: Consultancies Can't Grow Their Business When Their Websites Suck
2023 is full of possibilities. And yes, I say that while fully aware of the anxiety many consulting leaders are experiencing over the looming recession.
But that’s exactly why consultancies should take the time to re-evaluate their current practices: their approach to business development, their positioning, the language they use to communicate with prospects, and so on.
A recession shocks the system, which means it will open up new opportunities. Consultancies that can anticipate these opportunities, align their (narrow) positioning to changing client needs, and use education-driven content to communicate value and expertise, can expect to come out on top.
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