In our experience, most consulting firms don’t struggle because of external pressures or poor financials. They don’t have a sales problem. They don’t have an expertise deficit.
They struggle because their consulting value proposition is weak, vague, or indistinguishable from others. Clients don’t feel urgency or see no reason to hire these consultancies.
This foundational problem then rears its ugly head in every aspect of running a consulting business – e.g., marketing efforts seem inconsequential, competitors constantly win bids for ideal clients, the pipeline of work is unpredictable, and so on.
While initial requests for help come to us from consultancies for a whole bunch of reasons, it is amazing how many come down to the problem of poor consulting value propositions.
Over time, it allowed us to map these consulting firms onto a quadrant – the consulting value proposition quadrant.
And that’s what I’d like to discuss in this article: the enormous impact a consulting value proposition has on the success – or lack thereof – of a consulting firm.
The value proposition challenge that can make or break a consulting firm
While there are countless ways in which a value proposition determines both a long-term strategy of a consulting firm and daily operations, there are six facets that a well-designed consulting value proposition shapes the most:
- It anchors services in a pressing business issue. A strong value proposition ensures that a consulting firm’s services are tied to a high-impact and urgent business challenge, not just a vague or optional improvement. Clients must need the expertise, not merely want it.
- It targets a specific audience/segment. A well-crafted value proposition clearly defines who the consulting firm is ideally equipped to help. Instead of positioning themselves for “any company with a problem,” successful consultancies focus on a well-defined client profile that has the budget and the urgency.
- It defines a clear, outcome-driven impact. A strong value proposition moves beyond broad service messaging like “we do strategy” to articulate specific results – “we solve X problem with Y results”. These consulting firms frame outcomes in a way that resonates with client priorities, showcasing deep expertise and understanding of the specific problems the target audience struggles with.
- It builds on a compelling signature methodology. A repeatable, structured methodology goes a long way in differentiating a consulting firm and enhancing its credibility. Instead of offering generic expertise, high-performing consulting firms develop a proprietary framework and reduce reliance on one-off, fully customised engagements that erode profitability. The result? Predictable outcomes – a massive advantage to offer to risk-averse service buyers.
- It shapes the client success journey. A consulting firm’s value proposition influences the entire client engagement lifecycle. It helps design a journey where value is reinforced at every stage, deepening the relationship and leading to more referrals.
- It informs thought leadership and point of view. A value proposition determines which key themes the consulting firm focuses on in its thought leadership. A strong value proposition helps consulting firms develop a strong, differentiating voice. It helps consultancies become known for solving a specific type of problem, rather than blending into the noise.
Recommended reading: Building a Winning Consulting Value Proposition
Downstream Damage: When the Value Proposition Fails
In the past years, we have observed that when consulting firms get the value proposition wrong, the performance declines in every part of the consultancy.
- Inconsistent client attraction: Client attraction efforts become inconsistent because the messaging of these consulting firms is too broad and fails to resonate with a specific audience. This makes lead generation unpredictable and unreliable.
- Value dilution: When a firm’s vague expertise is wrapped in fluff consulting jargon, it becomes indistinguishable from the rest of the noise. Prospects can’t grasp the firm’s true value. It becomes difficult to justify premium pricing, and consulting firms are forced into a race to the bottom where cost becomes the primary differentiator.
- Lower win rates and longer sales cycles: A weak value proposition leaves too many unanswered questions in the minds of potential clients, leading to hesitation and prolonged decision-making. Clients ask for more proof, additional case studies, and extra meetings before committing, increasing sales cycles.
- Pipeline instability: Without a strong inbound motion, firms become dependent on outbound efforts, constantly chasing new business instead of attracting it. This leads to unpredictable revenue pipelines and inefficient resource allocation. Furthermore, it forces consulting firms into a reactive mode, making it difficult to plan for growth or invest in long-term strategies.
- Constant pricing pressure: When a consulting firm can’t articulate its value clearly, clients evaluate it by simply comparing its pricing to that of other firms. Instead of evaluating expertise and impact, procurement teams treat the firm like a commodity, negotiating with the goal of driving fees down.
- Higher operational complexity: A vague value proposition leads consulting firms to accept too many different types of projects. This variability forces consulting teams to constantly adjust their approach, tools, processes, and methodologies for each engagement. This results in higher costs and wasted resources.
- Lower client retention: When a consulting firm’s value isn’t clearly defined and reinforced throughout the engagement, clients fail to see why they should stay beyond the initial project. Without a structured approach to delivering impact at every stage of the client success journey, consulting firms struggle to deepen relationships, leading to low repeat business and missed opportunities.
- More stress: The lack of a strong value proposition forces firms into survival mode. They are constantly scrambling to win business and justify their fees, which leaves them with no time or resources to intentionally design and execute a strategic growth model.
- Too much customisation: While customisation may seem like a way to add value, it often destroys margins by increasing project complexity, requiring excessive time investment, and making outcomes unpredictable.
- Growth tied to headcount: Without a laser-sharp, differentiating value proposition, firms can only grow by hiring more consultants to take on additional work. This model limits profitability, as revenue is directly linked to the number of billable hours the firm can generate.
The consulting value proposition quadrant
To help consulting firms understand how they stack up against other consultancies on the market, we have developed a value proposition quadrant.
You can use it to determine where your consultancy’s value proposition sits and what you should do to move to the ideal quadrant.
- Q4: The Gold Standard (Strong Value Proposition + High Need Problem): These firms solve a must-fix issue, and clients see them as the partners to call. Their pricing power is high, and most clients have a budget line item dedicated to solving this problem. Trying to become a highly profitable consulting firm? This quadrant is where you should operate.
- Q3: The Undervalued Expert (Weak Value Proposition + High Need Problem): The problem is real and high stakes, but the firm’s consulting proposition is weak. Clients struggle to see why this firm is the best choice. The opportunity exists, the expertise is there, but the consulting firm is underselling its impact.
- Q2: The Nice-to-Have Club (Strong Value Proposition + Low Need Problem): The offering is sharp and differentiated but doesn’t address an urgent priority. Clients might be interested but don’t have a budget line for it. These consulting firms close deals in good times but struggle when budgets tighten.
- Q1: The Consulting Graveyard (Weak Value Proposition + Low Need Problem): No urgency. No compelling offer. Endless selling cycles, price pressure, and slow-moving deals. These consulting firms spend more time convincing clients that the problem matters than solving it.
How consulting firms can move into the Gold Standard quadrant
In order to achieve the value proposition that high-performing consultancies operate with, businesses must shift their approach in two critical ways:
- Solve a truly mission-critical problem. Is there a budget line item for solving this issue? If not, it’s not urgent enough. Would inaction result in financial loss, regulatory risk, or competitive decline? If not, reposition. Q4 is about anchoring your value proposition in the most critical challenges the ideal clients face – the types of issues that require immediate solutions rather than optional or incremental improvements.
- Make the value proposition unmissable. Stop selling capabilities and start selling outcomes for specific buyers. Define a sharp, distinct methodology, not another version of what’s already out there. If clients say, “We’ve seen this before,” it's a losing game. Remember that clients aren’t buying frameworks, tools, processes, or experience. They’re buying results that solve their most pressing issues.
Why now?
“Alright, Luk. This all sounds good, but we don’t see a pressing need to upend our entire business at the moment. Just a couple of tweaks will suffice.”
I heard this type of response more than once.
Unfortunately, time is not a luxury that most consulting firms can afford.
Here's what Florian and I observe:
- The market is getting more competitive every week.
- The battle for attention has dramatically intensified.
- The AI hype fuels additional hesitation.
- Decision-making is slower.
- Budgets are scrutinised.
But the most significant risk is internal. Consulting firms that lack a compelling, must-have proposition will suffer more.
Most consulting firms never fully commit to a differentiated value proposition. They tweak it, water it down, remain deliberately vague, chase short-term revenue, and end up stuck in the wrong quadrant.
Winning is about owning the Q4, solving a critical problem, and resisting the pull to dilute the consultancy’s proposition.
Recommended reading: The Biggest Mistakes Consulting Firms Made in 2024
Final thoughts: Mediocrity doesn’t fuel growth
In a market that is only getting more competitive, a value proposition can determine whether a consulting firm is thriving or barely surviving.
Consultancies that fail to commit to a strong, differentiating value proposition that reflects the urgent problems of a narrowly defined audience will continue to struggle, chasing unpredictable deals and fighting constant price pressure.
On the other hand, consulting firms that design their way into the Q4 quadrant by anchoring themselves in an urgent problem will enjoy growth, not just revenue growth but profitability growth.
The question is: where does your consulting firm sit today? Are you surviving in default mode, or did you intentionally design the consulting proposition for high performance?
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