Originally posted on Deltek.com. Link here: The Key to Consultancy Success: Balancing New Business and Client Service
By Guest Author Jason Mlicki, Principal at Rattleback
2023 will prove to be a fabulous year for most consulting firms. That said, a variety of mixed signals point to a more difficult time in the year ahead. The most successful firms will likely grow right through the malaise by virtue of their unique ability to manage exceptionally well at the intersection of pipeline and delivery. This blog looks at three aspects of these high-performing firms.
2023: A Record-Breaking Year for Consulting Firms
My firm, Rattleback, is a leading provider of marketing consulting, industry research, and thought leadership development for professional services organizations. Based on our latest consulting firm research conducted in July 2023, this year is proving to be a record-breaking one for most firms. In fact, 80% of firms tell us that their overall financial performance either “somewhat” or “substantially improved” in the first half of this year relative to the same time a year ago.
This performance is underpinned by a variety of success factors, including:
- A robust growth in leads – 57% of firms generated more leads in the first half of 2023 relative to the latter half of 2022.
- An even healthier growth in pipeline – A whopping 67% grew their pipeline in the first half of this year.
- Comparable growth in deal value – Commensurately, 66% of firms grew their deal value in the first six months of 2023.
Taken together, demand for firms’ expertise is up, and they’re using this leverage to charge more, deliver greater value, and grow their top lines.
Consulting Firms Sales Pipeline 2021-2023
“Excelling at the Intersection of Pipeline and Delivery”
Walking the Tight-Rope of New Business and Client Service is the Top Growth Challenge
Despite all the positive returns, there are more than a few challenges facing the market for consulting services in 2024. From the Federal Government’s aggressive rate hikes to ongoing wars and political stagnation, there are a wide range of factors presenting headwinds for firm leaders. And those are just the external challenges beyond our control.
When we point the lens at challenges we can control, we find firms feeling the after-effects of a period of rapid growth. When asked what they see as their #1 challenge to future growth, firms ranked equally their ongoing ability to “generate enough quality leads” and “keep existing clients highly satisfied.” Taken together – it’s clear to us that managing at the unique intersection of pipeline and delivery is the single most pressing, yet controllable, challenge firms face to future growth.
Top 5 Growth Challenges for Consultancies
Three Key Capabilities of High-Performing Consultancies
As it turns out, the fastest-growing firms (those with over 20% revenue growth) are exceptional at managing this intersection. In fact, 81% rated themselves as “extremely effective” here, compared to just 6% of their peers.
So, what’s their secret sauce? What is it that these firms do differently to simultaneously build and sustain a robust new business pipeline while delivering stellar client service? We conducted a “Leaders vs. Laggards” analysis of the data to find out. Our analysis revealed three key capabilities of high-performing consultancies.
Mindsets, Systems, and Discipline – The Secret Sauce of the Top Performers
- The Right Mindset – To start, the best firms bring a unique mindset. They recognize that siloed functions within a firm stifle the business’s ability to grow. In these firms, marketing and delivery teams engage in regular knowledge sharing. They collaborate to develop high-value marketing programs. And they embrace the competing dual metrics of client satisfaction and utilization as critical measures of their firm’s progress.
- Effective Systems – The best firms are much more likely to be highly vested in the systems to drive success in business development and client delivery. They have the necessary CRM capabilities to accurately predict what’s going to close and when. Simultaneously, they have the project management tools necessary to have clear visibility into backlogs, bookings, and delivery. In short, they’re not flying blind. They understand the risks of overbooking and underbooking and have invested in the systems needed to keep both from happening frequently.
- Operational Discipline – As any good consulting firm will tell you, a system is only useful if it’s paired with the right operational discipline. The best firms embrace this philosophy full-stop. They hold regular sales meetings without fail. They adhere to CRM and project management best practices. This discipline enables the systems to create the value for which they’re intended. It reinforces the right mindset. It’s effectively the motion that turns the crank on the flywheel to growth.
How Consulting Firms Excel at the Corner of Pipeline & Delivery
By all accounts, 2023 is going to be a record-breaking year for consulting and professional services organizations. But how do you manage that growth? I hope you’ll join us on November 16 at 2:00 pm ET for what promises to be an insightful hour. We’ll share the findings of our latest research into how the fastest-growing consulting firms excel at the intersection of pipeline and delivery. And we’ll offer tips on increasing your pipeline while managing growth effectively. For more information or to register, click here.
About Jason Mlicki
Jason Mlicki has been advising professional services firms on marketing matters for over 20 years. He writes about marketing and growth strategies, thought leadership development and lead generation on his agency website, Rattleback.com. Also, he co-produces the professional services marketing podcast, Rattle & Pedal.