5 Challenges Confronting Most Consultancies - Part I

This article highlights the insights of author Luk Smeyers, who has explored the challenges commonly encountered by consultancies and offers potential solutions.

In recent years, Luk has analyzed the positioning and business development models of more than 50 consultancies. Also, he engaged in detailed discussions with over 100 leaders from consultancies of various sizes to address the challenges they face in developing their businesses and to identify the underlying issues that impede their progress.

Luk observed many similarities in the difficulties consulting leaders face, which they often report in their efforts to grow their businesses. This article will focus on the most common and prominent challenges.

The foundation of Luk's evaluation process, which consultancies can adopt, involves assessing the alignment between the market's perception of the consultancy and its growth expectations and objectives. We won't delve into his evaluation’s details in this article, as it is a straightforward process that deserves further explanation beyond this article. However, we will discuss the principles underlying Luk's assessment approach, which focuses on verifying the alignment between market perception and the consultancy's expectations and goals. Specifically, he seeks to understand the following:

• How does the consultancy market itself?
• How does it attract new clients?
• What is the current client profile compared to the ideal client profile?
• How do ideal clients perceive the marketing message and business development efforts?
• What internal processes does the firm follow to formulate and communicate its message?
• Is there alignment among teams—from leaders to individual consultants, marketing executives, and junior researchers—regarding its message and how to express it?
• Are there any gaps or divisions in how its message is communicated to current and potential clients?

Luk often finds that the challenges consultancies face run deeper than superficial issues. They rarely stem from simply selecting the wrong social media platforms for marketing or neglecting a few metrics.

The issues he encounters with consultancies are usually symptoms of more significant problems ingrained in their operations.

5 challenges confronting most consultancies

1. Substandard Positioning

When a consultancy lacks strong positioning, its target market is left confused about what the firm does, how it operates, and why its services are valuable.

Moreover, these firms lack an appropriate framework to prioritize their clients, educational initiatives, and business development efforts. Weak positioning leads firms to accept any incoming projects just to maintain a steady workflow. This diminishes their expertise’s value and forces them to lower their fees to remain competitive. 

Poor positioning impacts every marketing effort, from messaging to social media posts and conference participation, as there is no unified message that everyone in the firm can rally around and promote.

Client referrals and case studies fail to showcase the consultancy’s unique value without effective positioning. As consultancies shift their focus away from non-ideal clients, they may become more relevant to their target audience, but achieving this requires both courage and discipline.

How to Address Substandard Positioning Challenges?

Luk advises consultancies to analyze their target audience thoroughly.

Who are they? What challenges do they face? What results do they expect? Are these challenges superficial, or do they reflect deeper issues that need addressing in a broader context? Luk encourages consultancies to conduct regular and structured research on their clients to stay updated on their needs and circumstances. Once the target audience is identified, positioning should be developed based on a problem-solving value proposition. Consultancies should not treat positioning reviews as mere routine tasks. Instead, these reviews should be seen as opportunities for growth, development, thoughtful reflection, and alignment with emerging market trends. 

Reworking this fundamental component results in substantial advancement, regardless of whether the current positioning is inadequate or no longer suits the firm.

Positioning is never static. A consultancy may have primarily focused on executive work. However, over the years, the firm's expertise has deepened, and it has achieved a higher level of engagement and strategic advice. Positioning should reflect this upward growth.

2. Strong Inward Vision 

A prevalent challenge for consultancies is maintaining a strong inward vision, often due to ineffective positioning. When positioning is optimal, it naturally fosters a client-oriented mindset.

Luk has observed that many consultants and consultancies struggle to move beyond their inward vision, often expressing sentiments like, "We excel at this," "We are unparalleled in that," "We are unique," "We are award winners," "We have extensive experience," "We are innovative, pioneering, enthusiastic, results-focused, client-centered, and work as a team," among others. 

This inward vision is often driven by pride, passion, or a strong belief in expertise, and sometimes by arrogance. Luk understands that, as he has experienced it himself. However, it's essential to view this from a different perspective. Clients are not interested in a "we"-centric narrative. They are indifferent to a firm's long history of experience. What truly matters to them is whether the consultancy has a proven track record of tackling specific issues—even with just a few years of experience. 

Prospective clients do not care if a consultancy claims uniqueness; they seek assurance that the firm can comprehend their challenges and provide relevant solutions. Ultimately, clients want results and trust in their consulting partners and experts whose knowledge surpasses theirs. It is all about the client and their needs. Inward vision and self-focus are unproductive.

How to Address Inward Vision Challenges?

Consultancies must pivot their messaging from an inward perspective to an external one. Client-oriented messaging should take precedence in all communication efforts. The service offerings should evolve from being output-centered (This is what we do) to being results-oriented (This is what can be achieved).

Consultancies must redirect their focus from themselves and their "unique services" to their potential and current clients’ problems and obstacles.

Luk suggests that consultancies consider the following questions when developing their communications, whether it's a social media post, a website advertisement, an email to a potential client, or a case study: 

• Where does the client fit into all of this?
• Who are the target clients?
• What client problems can the firm solve?
• What specific transformation can the consultancy achieve to address these typical problems?
• What is the firm's perspective on these typical client issues?
• What value or impact will the firm's consultants deliver?
• Where does the company's value proposition lie?
• Where is the specific social proof related to the value proposition?
• What educational resources and advice does the firm offer to help solve problems?

Consultancies should take the time to reassess and refine their messaging to ensure a client-oriented communication approach. 

In Conclusion

This part of the article highlights two common challenges consultancies face, and Part II will continue to address the remaining challenges.