Rick, a friend and colleague of mine, routinely sells millions of dollars in consulting projects for his boutique consulting practice. How?
Since Rick had the same question, a few years ago he analyzed 95 consulting proposals he had submitted in order to find out why some closed and others didn’t. Cool!
Then, he shared his results with me. Super, duper cool.
And now, I’m sharing Rick’s results with you. Liquid nitrogen cool!
One caveat: This analysis focused on why consulting proposals closed or failed, not on how to attract prospects and surface consulting opportunities in the first place.
Consulting Projects: How to Win ’em
Talk Directly With the Decision Maker
Do you still submit proposals to influencers and gatekeepers? Most consultants do.
Relentlessly pursuing the decision maker could double your consulting firm’s annual revenue.
Meet Your Prospects Face to Face
Rick’s a big believer in face-to-face meetings and has the frequent flier points to prove it.
While I’m not as keen on face-to-face, both of us agree that having personally met a prospect at some point in the relationship dramatically improves your odds of closing a consulting project.
Clarify the Need and Want for Consulting
The two, central questions you ask a prospect about his situation during a Context Discussion are, “What’s changed?” and “Why are you turning to the outside for help?”
Don’t be afraid to ask the second question. When your prospect starts selling you on why he wants a consultant, he’s simultaneously slamming the door on internal competition.
Avoid Bidding Wars
Obviously, your odds of winning go up when there aren’t competitors in the picture. The real takeaway here is to nurture relationships.
Relationships are the wellsprings that will feed your steady stream of non-competitive, consulting opportunities.
Discuss Fees Before You Submit Proposals
Have you skimmed over a direct, early conversation about your prospects’ budgets and expectations? If so, according to Rick’s research, you’ve lowered your odds of eventually winning the consulting project.
Asking about budget and fee tolerance is another, standard part of the Context Discussion that you should make a routine part of your discovery process. (Note you don’t have to give specific fees this early, just test for fee tolerance.)
Quickly and Persistently Follow Up
Notice the first word: Quickly.
Always respond to inquiries within minutes or hours. Not days.
Remember, you needn’t arrange all your ducks in a row before responding to a prospect. Just get the dialog started. That demonstrates you’re paying attention and your prospect is important.
In the consulting business, responsiveness rules.
Consulting Projects: How to Lose ’em
Fail to Work With the Decision Maker
According to Rick, 26% of his projects that never closed could be directly traced to his failure to work directly with the decision maker. ‘nuff said.
Succumb to Inertia or Internal Competition
Your biggest competition is always inside your prospect. Twenty-two percent of the consulting proposals Rick lost were due to inertia or internal staff.
If you’d like some ideas to overcome your prospect’s DIY mentality, read 4 Mind Shifts that Outwit Your Toughest Competition for Consulting Projects.
Price Too High Relative to Value
Out-of-line fees can cost you a project, but that shouldn’t dissuade you from high fees. Despite Rick’s consistently premium pricing, only 13% of Rick’s projects were lost because the client felt his fees were too high.
Yes, if you don’t convey the value of your consulting project sufficiently, your client may reject your proposal because of the fees. However, this is a rare occurrence and it should be a minor concern, not driving your proposals.
Enter Too Many Bake-Offs
Rick generally avoids competitive bid situations, yet he determined roughly 10% of his proposals were lost to a competitive consulting firm.
If you’re losing more than 30% of your proposals to competitors, then you either need an insanely efficient bidding process or a new, business-development strategy.
Realistically, you won’t know exactly why you lose some consulting projects. That was true for about 30% of Rick’s proposals, too.
Sometimes the cookie doesn’t crumble your way.
So what? Multi-million dollar consultants take that in stride. When you’ve created a rich stream of consulting opportunities, a loss here or there isn’t a big deal.
You’ve just read about one consultant’s self-assessment. What about yours? What’s the biggest reason your consulting firm has won or lost projects?
Text and images are © 2023 David A. Fields, all rights reserved.
How does Rick get his win/loss information? I assume that he is confident that they are telling him the truth when he asks why he lost an engagement. My experience is that when we lose an opportunity, the client is often reticent, unwilling, or uninterested in providing any feedback that helps to get better. Is there secret that elicits this information from someone who has decided that they aren’t going to work with you?
Great question, Derek. Rick has strong enough relationships with his clients that, for smaller projects, he felt he was able to get good information when he asked them. He also used his team to deduce what happened when he lost a project–for instance, he could triangulate on whether the client didn’t do any project at all or they went with someone else.
When a consulting firm loses a big project, I always recommend having a third party ask the three, post-loss questions for exactly the reason you suggested: clients tend not to give straight or correct answers when there’s a strong emotional tie to the project on one side or the other. If the consultant is deeply invested, then the client will try to assuage the consultants feelings and may fudge the truth.
Shout out to Pricing Solutions in Toronto for sharing their version of the three, post-loss questions: 1) what were the criteria for the decision; 2) how did we stack up against the criteria; 3) what could we have done differently, or what could we do differently next time, to win the project?
Great stuff, David. I’ll add that if you feel like you are guessing about why the prospect wants to work with you, whether you’re in budget, etc, when you create the proposal, go back and ask the questions to remove the guesswork. Doesn’t mean you’ll win everything (a 100% close rate means you probably need to take more shots on goal), but sometimes just having the right understanding going in can help dramatically.
Becoming the obvious choice boils down to a single word: Discovery. When you focus on inquiry and understanding your client (by asking questions), you set yourself up to win many, many more projects.
Reuben, you nailed it.
Outstanding content David. Thanks.
My only potential contribution is that I frequently provide an external pricing reference to help the client see the value of my proposal (at the university, on-site versus employee travel, or large consulting firms charge…).
Great addition, Gary. If your fees are lower than competition, then providing that reference can definitely be helpful.
Surprisingly, when your fees are super-premium, referencing the competition can also give you a boost. You’re essentially saying, “I’m expensive, I’m not afraid of being expensive, and I’m worth it.”
I appreciate you contributing your experience, Gary.
These points are right on the money. Thanks for the reinforcement.
I’ll pass your thanks along to Rick, whose dedication to understanding the ins and outs of consulting rainmaking has sparked many (many) hours of conversation. We’re lucky to have many, smart, committed consultants, including you, in this community, Tom.
Thank you for both reinforcing strategies that I have utilized over many years and providing food for thought and new thoughts on how to implement more effectively. I appreciate your commitment to the field and sharing of experiences, however, you do not address the reality of how SOME potential clients perceive consultants of color. As a well educated, highly credentialed consultant who is a woman of color, I and my colleagues have experienced subtantial amounts of unconscious or unintential bias. This is especially true when being considered for engagements: reporting to the Board or Executive Management; impacting enterprise wide profit and loss; or ‘mission critical’ engagements. Unfortunately, stellar expertise, ability to provide outstanding deliverables, and winning techniques are not necessarily the deciding factors.
BJ, thank you SO much for raising this important issue.
You’re absolutely right that I haven’t called out the specific issues that consultants of color face. In general, I haven’t written much about discrimination in the process of winning consulting projects or creating value, though it plays a significant role for different consultants in different parts of the world.
The more general point you’ve underscored is that clients’ hiring decisions are driven by emotional, “soft” considerations, not dispassionate evaluation of various consultants’ credentials. For the most part, our awareness of the importance of emotional divers works in our favor and allows us to win projects against bigger, more credentialed firms.
However, there are definitely times when the emotional drivers of choice work against us, and bias–whether intentional or not–is definitely one of them.
Thank you again for being willing to raise the issue and for being a valuable part of the consulting community!