According to the MCA 2021 Member Survey some firms reported a decline of 40% of income across the year while others were up 20% to 30%. 

Those that have thrived during this period are the ones that were already at the forefront of market trends that have gained momentum in recent years.

Here we examine the dominant trends that will continue to impact the industry and how this affects consultancy’s approach to business and client development.

When clients are paying for consultancy services, they want to see a return on their investment. With the current economic uncertainty, consultants across the board are under increasing pressure to deliver satisfactory outcomes.

This can often result in over-servicing the client, which eats into profit margins. It’s therefore integral to be able to effectively negotiate, so both you and the client are happy with a completed project.

Recent research has revealed that consultancies see competition from new firms (42%) as a more significant challenge than larger firms (35.4%). Why is this? 

Clients are becoming increasingly frustrated with the approach of some of the longer established firms and  newer firms are entering the market with more disruptive, agile business models.

Niche, specialist consultancies are increasingly grabbing market share by providing subject matter experts – specialists in the client’s sector. This in turn provides better value and better outcomes for the client.

Utilising big data 

Big data is not a new concept. However, an increasing trend we have seen is the growth achieved by consultancies that are able to best leverage this data.

When working effectively with data, consultants can identify trends and opportunities. Rather than waiting for clients to come  with a problem to solve, you can identify problems before the client is aware of them. This could be existing clients or identifying similar prospects that are likely to face the same future market issues.

By taking a proactive approach and spotting these opportunities, consultancies can lock out competitors and win more new projects from their clients. This is why we are seeing an increase in technology firms that are taking consultancy business from those with a more traditional business model. 

Spotting opportunities in a dynamic environment 

The use of technology and big data is one way of identifying issues, opportunities and trends that could impact your clients.

However, you shouldn’t underestimate the insight your consultants are gathering, through everyday interactions with clients. Rapid change has occurred, regardless of the sector your client’s operate in. Business models have had to adapt quickly in a fast-moving environment.

Consultants need to be able to spot the opportunities that their clients’ pivots are creating. All consultants need to have the mental agility and the commercial agility to spot opportunities and effectively communicate them.

We often see junior consultants spotting opportunities but not seeing it as their place, or having the confidence, to discuss this with the client. In short, your teams can’t just rely on a senior partner, who’s not as involved in the project, picking up on this insight. Junior consultants need to feel empowered to discuss these opportunities, which will lead to further projects.

79% of professional services firms say expanding inside key accounts is critically or very important to driving company growth over the next 12 months 

Taking joint responsibility for business development

One of the biggest issues that particularly affects small and medium sized consultancies is an over-reliance on key personnel to bring in new business. Not only does this impact the consultancy’s ability to scale but it also affects equity value. Which is why it’s critical to remove that single point of failure. After all, if there’s one consultant who has all the contacts and brings in the majority of new business, it’s a huge challenge to replace them if they are tempted elsewhere.

It’s critical to implement a culture and a set process where all consultants are responsible for winning new projects. In the short term, this takes the strain off individuals and reduces the cycle of feast and famine. In the longer term it makes your consultancy more attractive to potential investors or as an acquisition target.

If your consultancy has achieved growth organically, with a documented process that can be easily replicated, then you are a lot more investment proposition than a competitor that has achieved growth through acquisition.

By focussing on the client, spotting the opportunities for growth in their industry, you are viewed as the trusted adviser, rather than the “sleazy salesman” pushing a commoditised, one size fits all service.

We would advise consultants to stop thinking about developing their business but developing their clients’ business. When you’re adding value to clients, helping them grow then you’re providing the outcomes that act as the foundation for expansion and growth.

Critical to this is really getting into your client’s shoes.