Is a productized consulting model right for you? Exploring the potential benefits
You’ve worked hard, invested in your professional growth and repeatedly contributed to successful project outcomes. All of this effort has finally paid off: you’re now considered an expert in your field. And as such, you’ve decided to make your dedication and talent work for you by setting out as an independent consultant.
As you take the leap into this new world of opportunities you will immediately be confronted by the need to take important decisions about how you intend to operate in your new dominion. While there are several models that one can adopt, this article focuses on the three business models most often used by independent consultants.
1. The solo consultant model
2. The consulting firm model
3. The productised consulting model
Each one of these models has its own strengths and your choice of model will in large part depend on your approach to building a sustainable business.
1. Solo Model
Also known as the independent model, it allows for a certain amount of flexibility. You can establish your own rates and work at your own pace. You can pick which clients to work with and choose to take on projects that appeal to you. This model, however, requires you to wear several hats; as solopreneur you will need to invest a significant amount of time tasks like sales, marketing, accounting and legal admin work, all of which will time away from client service. This model works best for individuals who have just started the independent consulting journey since it doesn’t require you to incur any overhead costs. Here’s how you can make this consulting model work for you.
2. Consulting Firm
Are you getting great traction, and have more demand than you can handle as an individual consultant? Feel up to the challenge of building out a business? Then building out a consulting firm with staff (permanent employees, a network of associates, or a hybrid model) could be for you.
It provides the opportunity to leverage your network and expertise to win business, not to mention how it enables you to take on bigger projects and operate at scale. It is a very different proposition though building and running a consulting firm with its own pros and cons – have a look here to see if it could be for you!
3. Productised Approach
A productised consulting service is primarily a service with product-like features that enable you to organise and improve pricing, marketing, sales, delivery, and follow-up. With this model, clients know exactly what they will receive and how much these bundled services will cost.
E.g.: A traditional marketing consultant would establish short- and long-term marketing goals for a company, conduct market research, produce advice on branding, develop social media strategies and identify growth regions. The same consultant when delivering through a productised model would create different tiers and packages offering productised marketing services along with other business support services. The latter becomes ideal for companies/clients who need a modest amount of help in only a few areas. Some packages could look like the following:
Data focused: You offer to build out pre-launch audiences to enrich CRM data and campaign analytics
Growth focused: The priority here would be growth. You offer everything from pre-launch email list building to building out email marketing funnels and paid acquisition for B2B & B2C
When you’re just starting out it’s far preferable to focus on smaller cash flow gains rather than big successes. So, from a financial standpoint, productised advice is ideal for clients in need of an immediate boost.
Benefits and challenges of the Productised Model
This approach improves your operation’s repeatability and predictability. However, it should not be viewed as a substitute for working on prospects and pursuing other areas of business growth. As with any model there are both benefits and challenges with this approach:
- Create a valuable and marketable asset
- Recurring revenue potential
- Unlock the ability to rapidly scale
- Remove yourself from certain day-to-day activities
- Limited scope creep
- Monotony and lack of variety
- Little to no scope for customisation – cookie cutter model only
- Loss of personalisation in client relationships
If you are confident you can innovate around the challenges, then the next step is to determine if you have a viable business opportunity for this model of consulting.
Groundwork for a productised consulting model
The best approach to take when trying to lay ground for this consulting model is to draw on your own experience and observations to determine what aspect of your consulting can be productised. When doing so, it is important to consider the following:
- Recurring client challenges
- Regular queries and questions
- Look back at project outcomes and seek commonalties
This is a very important phase that needs to be based on actual client feedback and experiences – not based simply on what you think.
The key to success lies in your ability to solve these problems in a way that:
- Addresses the most prevalent challenges and solves them
- Offers fast and flexible solutions
- Demonstrates your understanding of desired client outcomes
- Once you have clarity on these aspects you can consider which activities to productise
How to productise?
- Selection: To productise your consulting services, select a portion of your daily business activities that you’d like to provide to your clients on a per-purchase basis and highlight its distinct benefits.
- Innovation: Using technology is often a non-negotiable aspect in model. Alternatively, use a self-developed technology to offer higher-quality consulting faster and at a fixed (high-end) charge. This takes more time and contains development costs but it has benefits. By using automated forms and self-developed knowledge bases, you can offer customised solutions to clients and retain an important element of personalisation.
Many roads one destination
You can use a blend of productised and personalised services to create a hybrid model – a business consulting model that combines the principles and advantages of many models into a unique solution. Whatever approach you decide on, it is important to pick the right fit for you. Do this and you will be positioned to address client demands and grow your consulting business.