Growing a Consulting Firm is Hard Work.
Of the fastest growing firms, 81% excel at balancing business development and client service.
Because most firms are project-based each year brings a higher level of client attrition than other organizations would find comfortable. Generating 30% top-line revenue often requires finding as much as twice that from new clients. Yet, delighting existing clients is generally job number one. Without a healthy base of highly engaged, trusting clients growth is simply impossible. At times it feels like walking a tight-wire.
As it turns out, managing at this intersection of pipeline and delivery is critical to growth. In fact, of the fastest growing consulting firms, 81% excel at managing this unique balance. If you want to figure out how to grow your firm, there’s no better place than there to start.
A Delicate Balance: Managing at the Intersection of Pipeline and Delivery is the Top Challenge to Firm Growth
Consulting firms saw sizable growth in 2023, but sustaining success will require managing better at the unique intersection of business development and client service.
For the third straight year, we commissioned research to better understand the challenges firms face in driving growth. This year, we specifically looked at the progress firms are making in building high-performing lead generation programs, sustaining a strong business development pipeline, and balancing business development and client service.
This year’s survey included 269 U.S. based firms with revenue greater than $5M.
MOST FIRMS GREW BETWEEN 2020 – 2023
For most firms, the last three years have been good ones. For the third year in a row, leads, pipeline value and revenue are all up. In fact, the majority of firms reported growth in these areas with 57% generating more leads and 67% growing their pipeline through the first 6 months of 2023, compared to the last 6 months of 2022. In total, 80% of firms tell us that their overall financial performance has somewhat or substantially improved in 2023 relative to the first half of 2022 (which was a great year for most firms).
LEAD GENERATION AND CLIENT SATISFACTION ARE SEEN AS THE TOP GROWTH CHALLENGES
To look more narrowly at the topic, we asked firm leaders to rank order five specific growth challenges. Despite most firms reporting they are seeing more leads, 28% of firms ranked “generating enough quality leads to build a healthy new business pipeline” as their number one challenge. This tells us that for a lot of firms while the quantity of leads is there, the quality of ideal clients they’re attracting may not be. Interestingly, an equivalent percentage of firms see keeping clients happy as their number one growth challenge.
Taken together – it’s clear to us that managing this balance of new business and delivery is the single most pressing challenge to sustained growth in most consulting firms.
Most firms feel they’re effective in this area. Though, as we’ll find later, the firms that are exceptional at managing this delicate balance bring unique mindsets, systems, and processes to the task. And, they’re much more likely to drive high growth as a result.
WORKING MORE EFFICIENTLY AND RETAINING KEY PEOPLE – THE BIGGEST CHALLENGES FIRMS FACE WHEN BALANCING NEW BUSINESS AND CLIENT SERVICE
Next, we looked more narrowly at the challenges related to the unique art of managing at the intersection of business development and client service. For mid-sized firms, it’s a fine balance allocating resources to marketing and business development while also providing clients with stellar service.
Managing client work efficiently topped the list, with 26% saying it’s their number one challenge. And in second and third place? Attracting and retaining either “talented client delivery leads” to manage the work or “talented consultants” to deliver on the work.
Somewhat to our surprise, firms see finding great people to guide client relationships as more difficult than finding capable teams to deliver. Even though the gap is slim, it reinforces that client service talent continues to be in especially high demand.
Lastly, operational efficiency ranked as the #1 hurdle. This tells us that many firms believe they still have room to optimize workflows, improve resource allocation, and accelerate overall operational performance.
A HEALTHY REMINDER – SALES, MARKETING AND DELIVERY ARE INTER-CONNECTED
The best firms realize that all these things are inter-connected. High-performance lead generation programs require healthy collaboration between sales, marketing, and delivery teams. Delivering on client promises requires great people both managing and delivering the work. Highly engaged people lead to highly engaged clients. And delighted clients provide robust client referrals that result in a healthy pipeline. In the pages that follow we’ll explore how the best firms build this virtuous circle that makes it happen.
How Clients Buy: Deconstructing the Modern Buying Journey
Some of the best research on B2B buying over the last few years highlights a variety of new “buying behaviors.” While some of the behaviors are new, has the process really changed? We think not.
The process by which clients hire consulting firms feels messy and chaotic. Clients struggle through a malaise of identifying and prioritizing their biggest organizational challenges. They form cross-functional buying groups to diagnose those challenges and select potential firms to hire. And sometimes they drag those firms through a gauntlet of information requests and interviews to make a decision. Having a model to describe how it all works is critical to 1) prioritizing marketing resources and 2) isolating your marketing and business development strategies.
We developed the Rattleback Arc of the Client’s Journey to make sense of it all. This model represents the 4 stages a client goes through on their journey to becoming a client — learning, vetting, discussing and hiring. It presents a relatively clean view of how clients navigate their way
through the process of first discovering a problem to be solved to eventually working with your firm to solve it. It’s clean and it’s simple. But does it hold up in the face of everything that’s happened over the last 5 years?
The short answer is yes. But, before we get there, let’s look at how client buying behavior has changed or accelerated over the last 5 years. Based on Gartner’s research into B2B buying, we see 5 notable trends:
Trend 1
Purchases Being Made by Larger Groups
Almost all clients are seeking to build internal consensus on a purchase long before they agree to make it. They recognize that the success (or failure) of any endeavor hinges on gaining buy-in from within. This is particularly true of any consulting project. If everyone agrees a project needs to be done and can see a vision of a better reality, they’re much more likely to be an ally in the journey.
As a result, clients increasingly rely on buying groups to make decisions on which firms to evaluate, short-list, and hire. As of 2019, Gartner estimated the typical buying committee for any B2B purchase grew from roughly 5 people to nearly 11. In practice, post-COVID, a buying committee can be as large as a client chooses to make it. There are no limitations. How many people can we cram into one Zoom call? There’s your buying group. Clients will involve people both up-and-down and across the organization throughout their buying process. This is true whether you meet all of them or not.
Trend 2
More B2B Purchases Represent Organizational Change Initiatives
The purchase of consulting services has always represented a desire for some level of organizational change. But it appears that many more B2B purchase decisions are increasingly connected to larger organizational change initiatives. Even that simple salestech integration that seems straightforward on the surface might require significant process and behavioral change throughout the organization. In fact, B2B buyers estimate that half of the purchases they make will have some implications on organizational structure.
What does this mean? It means that a client’s decision to hire your firm hinges heavily on the confidence they have in their organization’s ability to change. Even a consulting assignment you see as tactical in nature may represent some meaningful level of organizational change management needed to realize the benefits. You must account for this in all your marketing and business development activities.
Trend 3
The Buying Process Is Even Less Linear
Buying and selling models have depicted the process as a simple, linear progression forever. This, of course, has never been true. The Arc of the Client’s Buying Journey was purposely structured as an arc for this reason. It represents all the activities that clients must accomplish in order to hire you. To some extent, clients have always bounced back and forth between these different activities rather than exploring them in a sequence. Now, it’s just more visible because so much of the buying process is digital.
Gartner describes this as the “jobs to be done” that a buying group must accomplish to make a purchase decision. They argue that clients essentially loop in and out of the jobs on their journey towards a purchase decision. Also of interest is that they point out that these “jobs” are being done both “digitally” and “with a sales rep” equally and simultaneously.
Trend 4
Content is Confusing Not Illuminating
The content explosion of the last 15 years simply has no bounds. During the pandemic, every firm marketing and editorial leader we spoke with told us the same thing. “We published more in the last 3 months than we did in the last 3 years.” This continues unabated with AI adding kindling to the fire. The number of podcasts have grown exponentially over the last 15 years. The cost of this explosion is now coming to roost. Collectively, we have flooded the zone with content. There’s simply too much for clients to deal with.
The worst part of this is that clients find much of this information to be conflicting. They’re not sure what to believe or what solution to trust. This leaves them confused. And it exacerbates their very real instinct to … do nothing!
To be clear, this does not mean stop publishing. It does mean, however, establishing strict quality standards for what you publish and when you publish it. And it also means making sure that everyone in your organization understands it — particularly those that are expected to sell from it and deliver services based on it.
Trend 5
Clients are Spending Less Time Meeting with Sellers
On average, when making a B2B purchase, clients are only spending 17% of their time meeting with potential suppliers. Obviously, this percentage shrinks when you isolate the time a buyer spends with any one firm. In fact, Gartner estimates that only 5-6% of the total buying time might be spent with any one individual firm.
As it relates to hiring a consulting firm this is only true for some firms. For firms that have positioned themselves as a recognized expert or trusted advisor, this percentage goes up dramatically. In fact, we would argue that clients are spending more of their time with firms that occupy that space in their minds. They’re turning to those trusted advisors to help them make sense of the noise in the market.
Where else are they spending their time? Notably, clients are spending 27% of their time “researching independently online.” In fact, it’s the place where clients spend most of their time in the purchase process. So, yes, that thought leadership that’s flooding the zone is getting consumed. Predominantly online.
This predilection for an increasingly digital experience extends itself into the discussion, hiring and delivery process as well. Sometimes by request, other times by necessity, clients have become much more comfortable with digital-first or digitalonly buying experiences. As an example, one of the research partners we work with has collapsed the entire hiring and delivery process into a “conversation free” digital experience. All information pertaining to a research request can be submitted online. A quote is provided through DocuSign. A survey draft can be written, uploaded, approved, and deployed through their web-based portal. And survey results are dropped right into our Survey Monkey account. And it can all happen without a single conversation.
IN SUMMARY: THE ACTIVITIES ARE CHANGING BUT THE BUYING PROCESS REMAINS THE SAME
Yes, clients are exhibiting new buying behaviors. They’re spending more time online. They’re spending less time with your people (unless they see them as a true expert and trusted advisor). They’re buying more cross-functionally. They’re involving more people in the buying process. They’re more concerned about validating that they’re making the right decision. And they’re hyper focused on building internal consensus.
The 4 stages — learning, vetting, discussing, and hiring — remain largely unchanged. These 4 stages exist to help clients solve the “jobs to be done” within the buying process. Your job, from now and forever more, is to help clients do each of their buying jobs more easily and effectively.
Taking Control: Embracing a Value-Based Selling Approach to Guide New Clients into Your Firm
The traditional business development playbook for professional services firms is on life support. To thrive in today’s competitive environment, embrace an expertise-first approach that puts you in the driver’s seat.
For decades, professional services firms followed the same playbook — build personal relationships with potential clients and let business follow in time. This model relied on rainmakers leveraging their networks to land new accounts. This was largely done in person. The operating belief was simple: “People do business with people they like.”
Today, that kind of thinking could be the reason your pipeline has tapered to a slow, inconsistent drip.
As we pointed out in Chapter 2, clients’ buying behaviors have rapidly evolved, making casual relationship-building incredibly difficult. In the digital-first buying era, your connections are only as strong as your Wifi. And that’s not your only challenge.
Buying committees now span functions, geographies, and levels. Consensus must be built between disparate stakeholders. In this complex environment, clients increasingly do business with people they THINK like.
RELATIONSHIP-FIRST SELLING IS HINDERING YOUR FIRM’S GROWTH
The traditional sales approach — reliant on relationships first — hasn’t evolved with the realities of business operations in today’s digital-first landscape.
If you’re like a lot of firms, this traditional approach starts with a heavy focus on building personal connections — taking clients golfing, going to dinner, serving on a board, or networking at industry events. The aim is to make personal connections now that will lead to business at some point in the future. But this dynamic reinforces an impression that your firm is just one in a sea of interchangeable options, rather than an expert with a unique perspective. And operating this way isn’t the only sales pitfall.
Lead generation is the next area where traditional sales models can steer firms off course. Historically, the responsibility to generate business falls almost exclusively on practice leaders and consultants who are expected to bring in leads through conferences and other means of organic networking. There’s a great deal of investment in unpredictable, inconsistent results. And referrals? They’re treated as a golden ticket, even when they come from sources that don’t fully grasp the firm’s capabilities appropriately, leaving firms with engagements that aren’t the right fit.
Under this traditional (read: transactional) model, clients drive the buying process from start to finish. They define the scope of projects and issues while firms line up to respond to RFPs. This puts the emphasis on price rather than expertise, as clients weigh options for the lowest bidder to execute on parameters they dictated. It also assumes purchasing decisions happen in a vacuum when, in reality, they involve multiple stakeholders.
When potential clients control the journey, it’s much harder for your firm to meaningfully set itself apart. The result is that clients see firms as vendors that are selected based on fees first and expertise second, setting the stage for a transactional relationship instead of a fruitful partnership.
THE NEW MODEL: TAKE CONTROL WITH AN EXPERTISE-FIRST SALES APPROACH
In a way, the relationship-first sales approach was a bit like improv theater. Practice leaders were like actors in a play reacting to clients as they set the scene. In a digital-first selling motion, you’re writing the script and putting your firm in the director’s chair.
With this clarity, you’re primed to develop original perspectives that translate into thought leadership content: bylined articles, research reports, speeches, webinars, and more.
In a digital-first firm, your lead generation effort is fueled by thought leadership content that engages and educates your ideal clients. Your marketing strategy supports these efforts through audience building via search, social, email, and more. Some leads come inbound, others through targeted outreach with useful, relevant thinking. (We recommend the one-two punch of organic and paid marketing strategies.)
As a result, you’ll find your conversations with prospects begin organically, driven by the way you think and solve problems — not about where you hope to go for lunch. Remember that it’s less about “people doing business with people they like” and more about “people doing business with experts they THINK like.”
Personal relationships may develop over time, but they derive from the initial value you provide.
THE MODERN SALES APPROACH SHAPES THE NEW BUYER’S JOURNEY
With you in the director’s chair, the buying process becomes a true collaboration, not a reactive response to rigid RFPs. You play an advisory role – guiding new clients through the process of framing their problem, identifying potential solutions, and gaining internal alignment from the get-go.
With the expertise-led way of selling, buying decisions are ultimately based on the firm’s proven abilities, POV, and position to deliver maximum value — not just the lowest bid. This consensus is enabled by your readily accessible thought leadership, providing validation, and inviting buy-in across all levels of the client organization. Not just with your one or two established connections.
FIVE WAYS TO SHIFT YOUR MINDSET TO A MODERN SELLING APPROACH
The modern sales approach represents a seismic shift for many organizations accustomed to legacy models. What does this transformation look like when firms embrace a client-first, expertise-driven mindset?
Lessons from the Leaders: How the Best Consulting Firms Balance New Business and Client Service to Drive Growth
The intersection of pipeline and delivery is a high-wire act. Get it right, and your consulting firm will likely see strong, sustained growth. Get it wrong, and your revenue and profit suffers.
In our recent survey of 269 consulting firms across the U.S., we found that the fastest growing firms (those with over 20% revenue growth in the past year) were extremely effective at managing this intersection. In fact, 81% rated themselves as extremely effective here, compared to just 6% of other firms.
So, what’s their secret? What is it that these firms do differently to build a robust pipeline while delivering stellar client service? We conducted a “Leaders vs. Laggards” analysis of the data to find out.
The Leaders included 30 firms who rated themselves as “extremely effective” at balancing business development and client service. In other words, these firms are exceptional at managing at the intersection of pipeline and delivery. The Laggards were 19 firms who rated
themselves as “not at all effective” or “not very effective” here.
We compared mindsets, systems, and behaviors between these two firm sets based on how they answered questions related to firm growth, pipeline growth and client satisfaction. The insights we uncovered reveal how the best firms design and manage the pipeline-to-delivery intersection for robust business growth.
THREE KEY GROWTH AND DELIVERY STRATEGIES ADOPTED BY SUCCESSFUL FIRMS
The savviest firms know how critical it is to manage the intersection of pipeline and delivery strategically. They’ll also tell you it’s no walk in the park. It takes investment in time, people, and resources:
STRATEGY 1
The Right Mindset for Success
The key differentiator starts with a mindset, or how Leaders view the interconnected nature of pipeline and delivery. They recognize that siloed functions within a firm stifle the business’s ability to grow. Collaboration, on the other hand, is the fuel that drives and sustains growth.
What does collaboration look like? In a high-performing firm, marketing and delivery teams engage in regular knowledge sharing. Thought leadership is nurtured through collaboration between subject matter experts who spend their time consulting with individual clients and marketing teams who focus on tracking the wider industry landscape. This cross-pollination breeds a well-rounded knowledge base that yields higher quality thought leadership. It helps these firms attract ideal clients and serve existing ones more effectively.
These leading firms also embrace dual metrics of client satisfaction and consultant utilization. While utilization targets are crucial to managing for profitability, chasing them at the expense of generating accretive client value is shortsighted. Satisfied clients drive growth through referrals, repeat business, and expanded engagements.
Without this mindset, the risks are real. Silos block expertise sharing that could create more resonant thought leadership and higher-value solutions. And neglecting client satisfaction damages referral pipelines and retention. Growth-oriented leaders understand happy clients and cross-functional harmony unlock sustained success. They cultivate a collaborative culture, blending varied expertise into revenue-driving insight.
STRATEGY 2
Effective Systems Built for Business Development and Delivery
Where pipeline and delivery intersect, you’ll find the most successful firms using and investing more effectively in technology systems like CRMs and project management tools. Not only do they look to these tools to give them key insights about their existing and ideal clients, but they also rely on them to provide clear visibility into pipelines and backlogs, giving them confident foresight into likely wins and timing of engagements.
Project management systems like Deltek prove pivotal to precise resource planning as new work arrives. And with granular visibility into engagement progress, consultants can be optimally assigned based on up-to-date context.
Without these systems, firms fly blind, risking overbooking or underbooking. Overbooking strains delivery and leads to dissatisfied clients. On the other hand, underbooking hurts utilization, revenue, and profitability. But with scalable systems and process diligence to drive visibility in pipeline, backlog, and delivery planning and guesswork disappears.
The investment pays off: Replacing gut instinct with data-driven decisions directly correlates to client satisfaction and revenue growth.
STRATEGY 3
Emphasizing Operational Discipline
Mindset and systems only thrive with diligent operational discipline, the third success strategy of Leaders. These top performers hold regular sales meetings to review pipelines, backlogs, and staffing needs. Partners and managers adhere to CRM best practices like maintaining clear visibility on completed tasks, keeping tabs on pending opportunities, and analyzing their sales forecast regularly. Of course, it doesn’t stop when the work is won. The best firms maintain this same level of discipline in new client kick-offs and through delivery.
This type of operational discipline provides firms with consistency and day-to-day structure that turns into a competitive advantage. By maintaining diligence around processes and best practices, they’re able to sustain clarity and focus even amid rapid growth. It unlocks their capacity to balance delivery quality and generates the insights and responsiveness necessary for adjusting resources and plans in fluid situations.
As other firms stumble reactively, disciplined operators enable agility, consistency, and breakthrough performance. In short, discipline translates process into profit, turning the day-to-day structure into sustained success in volatile markets. It is the lynchpin that allows great strategies and systems to achieve their fullest potential.
TRANSFORM YOUR FIRM’S GROWTH STRATEGY WITH THREE CORE MANAGEMENT METHODS
We recommend three steps to drive your firm’s growth strategy:
APPENDIX: FIRMOGRAPHICS AND DEMOGRAPHICS OF THE SUPPORTING RESEARCH
This eBook relied heavily on research produced by Rattleback in the 2nd Quarter of 2023. That research consisted of an online survey of 269, U.S. based consulting firms fielded between 7/24/23 – 7/27/23. Respondents consisted of a relatively equal mix of CEOs, firm, practice, business development, and marketing leaders. Firms ranged in revenue from $5M to over $100M. And, primarily included a mix of IT services, strategy, operations, and HR consulting firms.
Drive Growth with the Right Mindset, Systems, and Operational Discipline
Mindset guides strategy, systems enable visibility, and discipline drives consistent execution. Together, these principles unlock the full potential at the crossroads of pipeline and delivery.
ABOUT THE AUTHOR
Jason Mlicki, Principal at Rattleback, has been advising professional services firms on marketing matters for over 20 years. He writes about 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.
ABOUT RATTLEBACK
Rattleback provides growth consulting, thought leadership development, and lead generation for professional services and B2B SaaS firms. We help business and marketing leaders envision and realize the desired future state for their firms. We have worked with early revenue start-ups, middle market, and notable tier one firms such as Infosys, L.E.K. Consulting, Stantec, and Dale Carnegie.