A small project with a new client could pave the way to a long-term, lucrative relationship with your consulting firm. Alternatively, it could waste your time with a low-margin, low fee engagement.
Let’s say your consulting firm has forged a connection with Esther Bunnie, CEO of Cad’s Berries, a multi-national player in the chocolate novelties market.
Cad’s Berries is completely missing the digital chocolate boom, and your consulting firm could help. If you play it right, Bunnie’s company could become a large portion of your consulting firm’s basket of clients.
Let’s look at four, common scenarios.
Four Foot-in-the-Door Scenarios
Scenario #1:You’d like to offer a Digital Cacao Transformation project; however, when you realize Bunnie doesn’t have the appetite for a full transformation, you offer a few variations of a Cacao Nib engagement to get your consulting firm’s foot in the door. Cacao Nib projects are quite small, but they preserve your premium fees and high profit margin.
Scenario #2:When it’s clear Bunnie would reject a Digital Cacao Transformation project, you propose a few flavors of a Cacao Shavings Remix engagement. The Shavings projects are small and you offer them at a substantial discount to get your consulting firm’s foot in the door.
Scenario #3:Your initial offer to Bunnie is the small scope, low fee, highly repeatable, foot-in-the-door project that your consulting firm recommends to virtually every new, prospective client. You call it a “One Square” project and it gives clients a taste of working with your consulting firm.
Scenario #4:Since Bunnie is reluctant to swallow a large, transformation project, you offer to dig a bit deeper into Cad’s Berries’ data. The output from your analysis, which you’ll conduct for free as a bid to get your consulting firm’s foot in the door, will give Bunnie a more robust, data-based indication of the upside from a transformation project.
Have any of these scenarios worked well for your consulting firm?
We’ve seen three of the four scenarios (#1, #3 and #4) effectively act as the tip of the spear for small consulting firms to establish healthy, new client relationships.
However, Scenario #2 delivers questionable, long-term results. Cutting your margins on your consulting firm’s first engagement with a client sets a precedent that can be difficult to reverse in future projects.
Most consulting firms find their lifetime customer value is substantially higher among clients that start with a larger engagement.
Therefore, as your consulting firm grows, raise your minimum threshold for projects and shift toward Scenario #4. Free is better than low fee.
If you do choose to offer a small project to pry your way into a new client, explicitly explain to your client from the outset that the first engagement is an appetizer and that your standard fare is substantially larger.
You’ll also enjoy more success if you craft a proven path from your consulting firm’s entry-point to larger engagements. This is particularly important if your consulting firm offers a standard, foot-in-the door engagement, as described in Scenario #3.
Net: Don’t discount, offer a small project if you know how to consistently leap from small to large, and eventually abandon bite-size projects entirely.
What has your experience been with foot-in-the-door projects?
Text and images are © 2021 David A. Fields, all rights reserved.