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 © 2020 David A. Fields, all rights reserved.