What types of ongoing pricing do they charge? What type of pricing structures exist? What are some of the 80/20 principles that can be applied to the consulting business? Examples and case studies are welcomed!
1. Let's define successful. Each of us has individual goals and only some of them are monetary. But I take it you are asking about how to make money consulting! I'd be very careful listening to the advice of a consultant who isn't successful by that measure. I pledged to never accept money from someone who makes more than I do. Why in the world would they need me to get to the next level when I haven't demonstrated both good ideas and the discipline to do it? I'm grateful to have been consulting for nearly 20 years, and here are some specifics (fees billed, by myself). I hit my stride four years in and billed $307,000. For the next four years, it rose every year until I hit $686,000. Then decreased the next four years during the recession, reaching $339,000. Then back up in 2007 to $804,000. Then a tad down each year during three spinal surgeries and recoveries. Then back up to a new high in 2011 of just over $1 million. Now I'm at a sane level. :)
2. Recognize the "blah blah me too lemming-like" marketing speak you'll read everywhere and plant a flag on ONE specific mountain instead. Make it your business to be the unquestionable SME (subject matter expert) to defend it. Ignore the really bad advice to put your eggs in one basket or to just follow your heart and the money will come. (There are a lot of people following their heart and struggling.)
3. Consider these very distinct stages in how you make money in consulting, in order:
a. Forget spreadsheets; see your hourly rate as a positioning tool.
b. Get a second shift job to keep from compromising while you build it.
c. Fill >60% of ALL the time you work w/ recoverable fees.
d. Maintain >60% with an increasingly higher hourly rate.
e. Move exclusively to package pricing w/o reference to hours.
f. Build scalable income (webinars, books, etc.).
4. Be friendly but not too accessible. Experts are not accessible in developed cultures.
5. Take two stances, concurrently. Be very helpful in giving away terrific advice for free as long as you don't personalize it. Then charge ridiculous amounts of money to do so.
6. Figure out why you're in business. I'd suggest these three things, in this order:
a. Make money.
b. Make a difference.
c. Enjoy the process.
If you don't charge enough, no one listens and you don't have an opportunity to make a difference. But just charging a lot of money is very emptying.
7. Take chances and be different. On my website I tell visitors who aren't a good fit, list all my prices, and list all my competitors. I'm not sure there's a business in the world that does that!
Best wishes to you.
I built a consulting company from 0 to 30+ employees in 4 years, so I got pretty good at this. A few ways that worked for us were (listed in no particular order):
1) Google Adwords to a free piece of content (ebook, webinar, etc)
2) Speaking at conferences, and being religious with "following up"
3) Leveraging our current customers for referrals early in our project (early is better then after)
4) Teaching our team how to identify opportunities when they were working with a customer to feed that to our account managers.
6) Create simple free apps that help your customers, it creates qualified leads for consulting.
Above all, do great work. If you're awesome and you can show your customers that you can scale that - without effecting their projects - then they will talk about you to everyone.
It takes many years to build a successful consulting business. I'm in my fifth year and I am now just at the point that I can cherry pick the clients I am most passionate and excited about helping. Here's how I gained traction....
1. Books - I've written three books plus numerous training manuals. A book is, in my humble opinion, the number one way for someone to get inside your head before they hire you. A book is like a brochure on steroids. In most instances my clients hired me because they read one of my books and then reached out OR I used the book to seal a deal that I was negotiating.
2. Speaking - I speak at lots of conferences and often make great connections by doing so. My team follows up to get appointments and then I use the appointments as an opportunity to see if my services are a good fit for helping them increase the productivity of their sales teams and/or for boosting office morale. I never take a client that I am not 100% sure I can help....I've turned down clients that are looking for services that I am not an expert at. Also, I often get hired to speak for large or mid-sized organizations. Keynote speeches are great for motivating a team for a week or even a month, but long-term results requires ongoing consultation and coaching so I always create a customized on-going consulting solution for any company that hires me for a keynote. Many of the firms take me up on it because they see that the keynote creates a spark in their team and they want to turn that spark into a flame.
3. Blogging - This goes hand in hand with writing books, but I give out tons of free content on my blogs. I have picked up clients from all around the world simply from the articles I've written.
4. Testimonials - How does a potential client know that you are worth your weight in gold? Testimonials from past clients. I do my best to collect those testimonials even though it's easy to forget to ask. Usually consultants are so focused on creating the results that the client needs that they forget to remember that the validation offered by past clients is often times the gas that fuels their ongoing business.
5. NSA - The National Speakers Association has been a huge asset to me in building my business. They have local chapters. I belong to their New England Chapter. Once a month the group meets to share ideas, insight, and more. The room is packed with others who have built awesome consulting businesses and from them I have learned the ropes and because of them I feel inclined to share what I have learned with others.
Good luck with your consulting business. Reach out if you need any additional advice or have more questions.
Most of the successful consulting business that I know of start their marketing efforts by building trust and being acknowledged as reference on their fields. They do lectures, participate and organize events and write articles to newspapers, magazines and respected websites/blogs.
At any time most of the income will be generated by 20% of the contracts and 20% of the contracts will consume most of the time the consultants have. The big secret is to align both 20% (to have the most of the income generated by the 20% that consumes most of the time) so that you don't waste most of your time on the clients that generate least results.
The charges usually will be using one of this three models:
* Per hour rates (sometimes with different rates for each kind of work/skill)
* Per result rates (an amount of the result increase or the result economy/decrease, depending on the type of the action)
* Per action rates (fixed amounts for specific actions/efforts)
If you want more examples, call me.
Some of the best clients I have from over the years came to me through some sort of course, article or blog I wrote. Building goodwill and trust with others pays off. When it comes to how much I give away vs. how much information I charge for, I use the 80/20 rule. I give away 80% of what I know for free and charge for the 20% that I feel sets me apart from my competition.
I agree with what Dan mentioned. Ask for referrals from existing customers, take speaking engagements to position yourself as an expert and blog. I'm going to try the Google Adwords.
Typically, I ask the client near the end of the relationship once I have produced an ROI. However, if you have a good relationship (client likes you) and have produced small wins, I'm sure the client would refer you prior to completion of the engagement.
Also, plant the seed mid way through the engagement/project to let your client know that you have identified other areas to work together which will increase client retention.
My business partner and I co-founded a marketing and business consulting company that is on track for our 3rd year as an Oregon Fastest Growing Company. Some things that have worked for us to grow:
1) Setting up good SEO on our site.
2) Writing regular blog posts.
3) Asking our customers and business network for referrals
4) Gathering great testimonials.
5) Getting regular endorsements on LinkedIn.
6) Helping our clients reach their goals (i.e. being good at what we do).
7) Establishing relationships with the local media.
8) Guest posting.
9) Developing strong relationships with people who are "connectors" in our target communities.
10) Attending important local events.
11) Hiring people who have connections in the community.