Invest in Your Own Expertise Looking to expand your successful business? Consider consulting.
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Darlene Panzitta had seen enough mediocre work from the consultants she came across in the pharmaceutical industry to know she could do better. So in 2007, when Panzitta began considering low-risk, potentially high-reward ways to grow her company, New Jersey-based DSP Clinical Research, the next step was a no-brainer. It was time for her firm to join the consulting fray.
Three years later, Panzitta isn't looking back. Not only did the move pay quick dividends, but it has made a lasting impact on her contract pharmaceutical research company. Within a year of roll-out, consulting services accounted for more than 40 percent of the firm's revenue. While that share has since declined, Panzitta says her decision to offer consulting as a means of leveraging the company's experience and expertise "has definitely been worth it. It has helped build this business. It brings in small jobs, but sometimes the small jobs lead to much bigger ones."
Plenty of business owners like Panzitta have found consulting to be a way to fortify an existing venture without overextending it. For an existing entity, consulting "is easy to get into, with minimal investment," says Dan Arriola, co-owner of Inktel Direct, a business processing outsource firm based in Miami that started consulting three years ago.
Ed Delia, principal at Delia Associates, steered his New Jersey marketing and branding firm into the consulting arena several years ago to capture smaller clients who couldn't afford a large marketing campaign. "Instead of having to turn these entities away, now we have a way to help them. That keeps us close to them. In some cases, it leads to full-blown engagement because these people don't forget the advice you [gave] them, even if it was five, six, seven years ago."
Adding consulting services can not only help a business capture clients it otherwise couldn't, but it also can accelerate the maturation of a company and its existing client relationships. Rushton McGarr discovered this when Market Force Information, the Boulder, Colo., customer intelligence firm he co-founded five years ago, began consulting. "We were living in a lower-level vendor world as a commodity provider of data, so strategically we felt it was super important to try to transform this business," says McGarr. "At the same time, our clients were telling us they needed help understanding the whys, whats and hows of our data. So two years ago, we added our analytics and insights service and transformed our business into a solutions provider. Not only has that created incremental value for our shareholders, [but] it gets us in the door [with prospects] at a much a higher level. To some extent, we've inverted the sales process, so now we can lead with [consulting services]."
That the company's move into consulting two years ago coincided with the onset of economic turmoil turned out to be a blessing, adds McGarr. "It helped us weather the storm."
Cross-pollination is another potential benefit to adding consulting services to your business's offerings. Positive consulting relationships can lead clients to other products and services, and vice versa. "It works both ways for us," says Arriola.
Is your business primed to add consulting as a deliverable? Consider the following before making a determination:
- Are the knowledge, expertise and best practices accumulated by your company marketable and valuable to others? "We have the playbook, and we're sharing it with guys who don't have the playbook," explains Arriola, whose company owns and operates call centers for clients and shows them how to develop and run their own.
- Are clients asking you for a level of support beyond what you currently offer? "Clients kept asking for help," says Arriola, "and that told us there was a need in the market."
- Does your company have the resources and capacity to allocate to consulting? Establishing consulting services "can be a very easy process if a company has the bandwidth," Delia says.
The signs suggest your company is ready to get into the consulting game. But there's more to making the leap than simply announcing to the world that you're now a consultant, says McGarr. "'If you build it, they will come' is a pretty dangerous model."
Here are some tips for doing it right from business owners who have gone that route:
Be methodical. Once she resolved to add consulting services, Panzitta took six months to research the competitive landscape and plan her roll-out. Meanwhile, a start-small approach benefited Market Force Information. "We started with one person [consulting]," says McGarr. "We didn't know if consulting would be the answer for us."
Put the right people in place. Once you've spotted a consulting niche, you want to mobilize to fill it before a competitor does. Now is no time to mess with long learning curves. So from the get-go, deploy consultants who know the market(s) they'll be consulting in. "To me, the key is the people you put in place," says McGarr. "They should have the domain expertise to talk [the client's] talk and know their business."
According to Delia, "front-line or hands-on experience in the area in which he or she is consulting is key to delivering meaningful and actionable advice to the client." Adds Arriola, "It helps if you have two or three people [on staff] who you're comfortable placing with a client for months at a time--whatever it takes to handle the assignment."
Be patient. Consulting services may not produce huge results overnight. "We were a trusted data vendor," says McGarr, "but we weren't a trusted consultant. It takes time to build credibility."
Document diligently. You're charging consulting clients a pretty penny for access to your blueprint for success. That blueprint better be detailed, adaptable and actionable, says Arriola.
Leverage relationships. To uncover consulting prospects, "you need to be comfortable asking clients to stick their necks out for you and make some introductions," says McGarr. Early on, consider charging clients below-market rates in exchange for referrals or proof points.
Exploit online channels. Social networking, blogging, squeeze page and ad words are valuable, low-cost vehicles for spreading the word about your consulting service, says Dr. Michael Anderson of startaconsultancy.com.
Watch for openings. Train yourself and your sales force to listen to clients and prospects to spot opportunities to bring up your consulting services when a situation warrants.
Follow up. Don't leave implementation of your recommendations to a client to chance. A positive outcome is critical, especially for a fledgling consultancy in need of glowing references, so stay in touch with clients, says Arriola, "to be sure they are continuing to execute the plan you put in place.
Don't underestimate the importance of oversight. Set clear goals for consultants and regularly monitor their progress toward meeting them, says Panzitta. It's a way to gauge whether consulting work is delivering as promised--for your clients and internally, for your company.
Don't lose sight of the stakes. The performance of a company's consulting services will reflect--positively or negatively--on other facets of the business. Are you prepared to put your company's good reputation on the line by venturing into the consulting arena to grow? "That," says McGarr, "is the innovator's dilemma."