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Exactly When to Travel to Win Consulting Projects

Jay James, CEO of Big JJ, Inc. emails you about a potential consulting project he’d like your consulting firm to handle. At the end of your follow-up call with Jay, he suggests you meet with him and his senior team in person to discuss the consulting opportunity. Reaching Big JJ takes a solid half day of travel. Should you go?

Consultants frequently ask, “Should we spring for airfare to visit a consulting prospect?” The more pertinent query is, “Should we use an entire day to meet one consulting prospect in person?”

Meeting consulting prospects in person is an expensive proposition in terms of time, and results vary.

One consultant I work with built his $6 million firm almost entirely on in-person meetings. He and his senior colleagues spent the majority of their time on the road.

In contrast, I’ve rarely traveled to meet prospects while building my firm. But rarely doesn’t mean never. (If the in-flight meal includes tiramisu, I’m on board.)

The Travel Formula below includes four considerations to guide your travel decision.

[Size of Project] x [Likelihood of Winning] x [Sales Contribution][Value of Time]

If the result is positive, then travel to pursue the consulting project.

Otherwise, move the opportunity forward via phone, video meetings, and email.

Factor Value Explanation
Size of Project ? Give your best guess. Are you looking at $10k, $50k, $100k, $250k, $500k, or $1 million?

Do not include the value of any potential follow-on projects.

Likelihood of Winning X-25% Another estimate. Do you think it’s very likely (i.e., 90%), a toss-up (50%), unlikely (10%) or somewhere between those?

Subtract 25% because you’re overly optimistic. Trust me, I know you and you think you win more deals than you actually do.

You can factor in the strength of your relationship, whether you’ve met the prospect in person before, and other influences into this one number.

Sales Contribution 10% As a rough rule of thumb, you should be investing around 10-20% of revenue into marketing (i.e., building visibility) and 10% of revenue into your sales efforts (i.e., pursuit of specific projects).
Value of Time ? I’m not a big believer in day rates, but I do think you should have a rough idea of what a day of your (team’s) time is worth to you. Round trip to Big JJ’s site is a full day of travel time. It might even be two.

(Note, this is the reverse of the classic-but-misguided approach of determining your day rate based on your desired annual revenue.)

 

Example:

If Big JJ strikes you as a 50/50 shot of winning a $100,000 consulting project, and you want a typical day to produce at least $5,000 in revenue for the consultant(s) traveling to the meeting…

$100,000 x 25% x 10% – $5,000 = -$2,500

Stay at the office. Use that travel time to drum up a consulting opportunity that’s larger or more likely to close or both.

My suggestion: post this formula somewhere it’s easily accessible when the travel question comes up.

I’m curious about your experience. How much of a difference have in-person meetings made for your consulting firm?


20 Comments
  1. Will Bachman
    January 3, 2018 at 6:40 am Reply

    David,

    Great question and great post!

    Ray Dalio recommends putting your principles on paper so they can be examined (and adopted or challenged) by one’s colleagues, and you are certainly role modeling that.

    Three reactions to your formula:

    1) Consider the value of the meetings that you can have with other people – both former clients as well as other professional contacts – while you are in town to visit the CEO of Big JJ, Inc. A friend of mine, one of the top executive recruiters in the U.S., maintains a list of people he would like to catch up with face-to-face, organized by city. When he has a client meeting in any city, he always makes it a practice to have at least one other meeting and preferably several with folks on that list.

    So it might make a difference if Big JJ is based in a remote small town vs. a city where you know dozens of people you’d like to see.

    2) I’d argue it is a mistake to ignore the value of potential follow-on work. If Big JJ is a small company that is hiring consultants for the first time and probably won’t do so again anytime soon, that is a very different situation than if Big JJ is a Fortune 100 company where you could have the opportunity to do similar work with multiple business units.

    Investment decisions ought to consider the option value that is created by the investment, and I’ve found in client work that when strategy looks only at the immediate return, you are likely to underinvest.

    3) Not to complexify matters too much, but the day rate portion of the equation should consider the actual opportunity cost of your time. While your typical “day rate” might be X, if you don’t actually have a project right now and won’t be billing that day when Big JJ wants to meet with you, then the opportunity cost is probably something less than X.

    • David A. Fields
      January 3, 2018 at 8:21 am Reply

      Hooray for bringing up issue of follow-on business! You’re absolutely right, of course, Will. The value of additional work from the prospect could be considered.

      In fact, in my first iteration of the article I included a number of additional factors such as follow-on, type of project, and type of client. For instance, I know that over the past 7 years, my average consulting client is worth 1.78 projects, clients who start with a certain type/size initial project have an average lifetime value over 3.5 times other clients, and a certain “demographic” of client delivers, on average, almost 10x the lifetime revenue of any other client.

      Ultimately, for the purposes of the article, simplicity won out; however, if you have the data and the wherewithal to add other factors into the formula, then go for it! If you don’t have the data, I’d be cautious with considering follow-on business. Consultants routinely overestimate the likelihood of winning follow-on business and the value of that business, which is why it’s so common to be burned by “foot-in-the-door” loss-leader projects.

      The value of other people you could meet is a very interesting suggestion, and something I hadn’t considered. Again, I’d suggest some caution in using it in the calculus. At the time you’re weighing travel to Big JJ, you presumably have no active opportunities on the table with other prospects in the neighborhood. An unidentified project of unknown size from an undetermined client strikes me as a happy side-benefit of travel, but not a great justification.

      Finally, to the question of opportunity cost. If you don’t have a project right now, you should be Building Visibility and Connecting. Meeting in person is a high-impact, low-reach, time-intensive Connecting tactic. During that same time you could be making 15 phone calls to your Network Core, writing a compelling article, reaching out to speaking venues, researching your Fishing Line, and so forth.

      If, as you said in your previous point, you could meet with a number of other prospects at the same time, then there’s considerable merit in thinking, “This is really an investment in in-person networking, and it’s subsidized by a decent chance of winning a project with Big JJ.” Balance travel against the opportunity cost of other business-building investments, not against the lack of project work or else you’d travel anywhere for any amount of time at any cost when you have no active project work.

      Thanks for your incredibly thoughtful addition to the article, Will. You’ve helped make the entire discussion much richer.

  2. Sam Klaidman
    January 3, 2018 at 7:51 am Reply

    If you decide not to go what would you say to decline without totally killing the opportunity?

    • David A. Fields
      January 3, 2018 at 8:40 am Reply

      Gracefully turning down an invitation while moving the opportunity into the win column is harder than saying, “Sure, I’ll be there.”

      First, keep the conversation Right-Side Up by responding to Jay’s invitation with something like, “We could definitely consider an in-person meeting. What are your thoughts on what that meeting would look like and what we would accomplish?” Jay’s feedback will guide your follow-up.

      For instance, if Jay says he wants his senior team to learn more and to weigh in, you could offer, “Getting their input makes a lot of sense. Before we pull everyone in for a full meeting, I’d like to give each of your team a brief call to introduce myself and get a preview of their opinions. Is that fair?” Those phone calls allow you to increase the likelihood of closing the project.

      No matter what Jay says, you have the opportunity to suggest approaches other than travel that will meet his needs. To make those suggestions, though, you have to understand his needs. Right-Side Up thinking strikes again!

      Outstanding question, Sam.

  3. Kenneth Russell
    January 3, 2018 at 9:06 am Reply

    Hello David,

    Excellent article. It really got me thinking on what factors are most important and of course it is not as obvious as it would seem. Your equation makes a lot of sense.

    I am curious, why don’t you consider the actual cost of the travel itself? I’ve been able to get my clients to agree to pay when I had to travel to meet with them. I had a meeting come up a couple of months ago that I would have to either pay for myself or ask my partner to cover the cost (he is the one with the money). The equation above is definitely positive in this case so it met that criteria for sure and the airfare was cheap so win-win.

    My point is that this was a quick up and back (so only one day total) and the airfare was low but heading overseas or across the country has a much bigger price tag (plus hotels and food that honestly has shut down my ability to go much more so than the cost of my time or the potential that I won’t get the project. Maybe it is because I am still small but actually investing money vs the potential of what I might make is still significant and I really cannot ignore it.

    Thanks

    • David A. Fields
      January 3, 2018 at 9:48 am Reply

      Kenneth, the short answer to your excellent question is: focus on bigger projects.

      If your typical consulting project is only worth, say, $10,000, then travel costs become very significant (and building a lucrative consultancy is considerably more difficult). If, on the other hand, a typical engagement is $100,000 or $1 million, then travel costs aren’t worth considering.

      Location matters too. If I’m considering an eight-hour trip that includes a stop-over and three-hour drive to reach Melville Montana, it costs what it costs. But if I’m considering an eight-hour trip to Lisbon, Portugal, a certain someone is going to insist she comes along, and suddenly I’m looking at two business-class airfares, 5-star hotels, and a three-day tour of Lisbon’s finest chocolate establishments. (In case a certain someone is reading, Lisbon was just an example. Stop packing.)

      Seriously, Size of Project, is more important than travel costs. If travel costs have you down, that’s your signal to think about how you can win larger engagements.

  4. Catrin
    January 3, 2018 at 10:14 am Reply

    Great article, David. I’ll have some math to do 🙂

    I will say, we have gotten pretty lucky not going through the above calculation thus far, but most of our travel at the moment relates to expanding scope in existing projects. We, therefore, mostly focus on strengthening the relationships, which tends to be the biggest roadblocks for not getting scope. We have done so very successfully with European travel (gave us recurring extra scope over the course of the last 2 years of the magnitude we couldn’t have foreseen and almost a second project we didn’t know existed). Not knowing it would pay off per your calculation, I’m confident to say, it has at this point and still continues to produce return.

    We have gone to Europe once a year for the last 3 years, just to meet with folks and plan on continuing this routine, because it is so important to connect with folks in person. They just won’t share certain things on the phone that they do over a cup of coffee (or some European delicious chocolate).

    But for new projects, your insights are invaluable! Thanks for sharing!

    P.S. I see you fixed the “email required for posting” thingie 😀

    • David A. Fields
      January 3, 2018 at 10:29 am Reply

      Catrin, you’re skilled at creating, nurturing and leveraging relationships. That’s not luck. It’s the result of your careful attention to improving your relationship capabilities.

      You’ve also highlighted a very important distinction. Unless I’m mistaken, your annual, European trips are visits to existing clients with whom, in most cases, you have active projects. In contrast to the Big JJ example described above, I’d characterize what you’re doing as “Walking the Halls.”

      Walking the Halls is one of the most effective approaches to winning follow-on business. Plus, since follow-on business is easier to win than is new business with a new client, traveling to Walk the Halls usually pays off. I’d evaluate travel to Walk the Halls differently than travel to visit a new, prospective client.

      Congratulations on your successes, Catrin. You’ve provided an illuminating case study in the benefits of investing in relationships consistently and diligently. Thank you for sharing your experience.

  5. Debbie
    January 3, 2018 at 10:17 am Reply

    David, Can you say more about the Sales Contribution part of the formula? This is good timing as I’m finalizing budgets for 2018. A bit confused about whether it’s 10-20 % for both marketing and sales efforts combined or 10-20 for marketing plus another 10 % for sales? What other rules of thumb have you found helpful for investing in ones business?

    • David A. Fields
      January 3, 2018 at 10:44 am Reply

      Debbie, the effort to win business typically eats up 20-30% of a well-established, well-run consulting firm’s revenue. A reasonable rule of thumb is around 10% of revenue is direct project pursuit and another 10-20% is opportunity creation (a.k.a. visibility-building or marketing). I wouldn’t get upset if those numbers rose to, say 40% in total. Also, as Will alluded to in an earlier comment, if you don’t have much business, then your investment in winning business is substantially higher relative to your revenue.

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