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Topic 5-Use Marketing Mix Strategies in Consulting Services
Topic 5-Use Marketing Mix Strategies in Consulting Services
(TIA)
COURSE: BAC III (F/TIME & EVENING 2023/2024)
SUBJECT: BUSINESS CONSULTANCY
CODES: GSU08213
TOPIC 5: USE MARKETING MIX STRATEGIES IN CONSULTING SERVICES
LECTURER: DR. ANICETH KATO MPANJU
5.0 INTRODUCTION
In this sub-enabling outcome, students should understand and be able to explain the
following:
Explain reasons for marketing of consulting services
Design consultancy packages
Set price for designed consultancy packages
Promote consultancy services
Conduct consultancy
Many consultants are uncomfortable talking about themselves and instead, focus
their marketing on other aspects of their business - if they dedicate any
time/resources to marketing at all.
Customers don’t buy from people or brands that they don’t know, don’t like, or don’t
trust. So how do you get your clients to know you, then like you, then trust you?
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1. Visibility
Becoming visible is something most consultants really battle with. The truth though is
that visibility is the only thing that is going to make you stand out in a crowded and
very competitive consulting world.
The biggest blunder consultants can make is to imagine that somehow potential
clients will find them e.g. by sharing a few posts on Linkedin. Nothing could be further
from reality.
Clients have more options today than ever before - there are more consultants and
experts and advisors now than there ever have been in the past.
In a world where professional services buyers act like consumers and can find
anything in seconds, whether searching for a new pair of shoes or for an expert to
solve their business problem, how the heck will we stand out and get on the first page
of Google for that buyer?
2. Trust
According to How Clients Buy by Tom McMakin & Doug Fletcher, professional
services are credence goods.
Credence goods are sold very differently. Clients do not buy credence goods based
on features or attributes. Unlike other products, credence goods are sold on trust.
One of cornerstone books during the entire consulting career has been ‘The Trusted
Advisor’ from Charles Green. The book is from 2000 but is still very alive and
kicking! You need to keep his 4 principles in your mind in your aspiration to
establish yourself as a trusted advisor.
First, you need to focus on the other person, your client, for the client’s
sake - they are not just a means to your own ends.
Second, you need to have a collaborative approach to relationships.
Third, look at your relationships as if they are going to last a medium to
long time rather than a short-term turnaround that has more of a
transactional focus.
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Finally, you need to build the habit of being transparent in all of your
dealings.
The first step in crafting a consulting service package is to outline everything you offer.
This is also a good chance to take a hard look at what services you offer that are low
profit (profit is not the same as revenue—I talk to consultants all the time who have high
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revenue services that are also high in costs, either in time or expensive or both; force
yourself to look at what’s actually making your profit in time and money).
Count up how many of these projects you’ve done, how much time they take you, what
other resources are involved and what work you do that “sparks joy” so to speak. It doesn’t
make sense to create a consulting package for a low profit service to something you
simply hate doing.
Again, it’s time to bust out the pen and paper and start making a list your favorite niches
and clients. Who do you love working with? What fields do you find that you really can
help incredibly effectively? If you see that you’re consistently doing your best work with,
say, helping female tech entrepreneurs, that could be a signal that it’s something you
should explore.
The second part of that is also evaluating the market. You don’t need a huge audience to
lead the market in consulting, but you do need there to be some kind of market and one
that can afford to pay you for your consulting services. If your favorite audience is very
cash-strapped, be realistic.
Now that you have a picture of what you offer, your audience and what the market can
bear, it’s time to commit to a service for your package. This is HARD! Eventually you may
have other consulting services you want to package but start with one (trust me!). So,
pick one service to package up, hopefully a high profit service you feel confident about,
and give it a name. This is again where I recommend using natural human language when
feasible. I’ve seen some awesome consultants struggle because it was plan confusing
what their services were.
So, if you’re offering a social media revamp to authors, give it a name that’s very clear
that’s what they’re getting—eliminate confusion so it’s easy for folks to understand and
buy into the idea.
Mapping out your client process is crucial when packaging consulting services for two
reasons:
1. It determines the outcome (ie deliverable, a word I hate) you’re offering clients
2. It allows you to preload your client communication so that you can anticipate
bumps in the road and trouble spots and be prepared ahead of time so they don’t
happen .
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For the elements that are “things” your client “gets” from you, these are your “what you
get” items for your consulting package landing page. (Check out our website design
page for an example.)
Do not skip the important step of determining your actual profit on a project. This is crucial.
Many consultants make the mistake of only thinking about revenue, but every project has
costs, whether it’s simply your fixed costs, like admin help or subscription services you
use, or your own time, which has value as well.
Make sure you’ve built in paying yourself (50% of the project fee is a good baseline for
your own profit and 30% is a good ceiling for expenses, if you follow the Profit First model,
which I recommend for consultants), your tax liability, and all that. You will likely be
surprised that the flat fee you estimated leaves you scrimping a bit. Don’t be afraid to
tinker with your consulting package fee initially, and of course, evaluate it each year as
well.
Don’t forget these prices will be listed publicly—this is the beauty of packaging consulting
services, the sales cycle is greatly reduced and streamlined, so public pricing is a thing
you’ll need to get comfortable with!
This is where most people get tripped up! It’s time to sharpen your pencils and write all of
your key messages down on paper. Interview yourself, so to speak, and think about the
common phrases about your clients’ outcomes and results that you can use. Make sure
you use natural language, remove jargon from your language and meet your audience
where they are at. Address their specific pain points (what’s the problem you’re solving?)
and explain the outcome you’re going to help them achieve.
While you’re at it, brainstorm calls to action that, again, are in language that fits your ideal
audience—you’ll need them.
Now it’s time to really release this thing into the wild! I know, it’s scary, but it’s time. With
your visuals, just like your copy, you’ll want to meet your audience where they’re at, just
like with the text, and make the sales page on your website feel natural and like it’s
speaking just to them. You’ll want to create your consulting services landing page with a
structure that addresses the problem, offers, your solution, makes it transparent what they
get and how much it’s going to cost, and finally how to reach you.
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You’ll want to re-evaluate this content frequently when you first launch—it may not land
exactly how you wanted it at first, but that’s okay! When you have a flexible design, it’s
easy to tinker and test and see what resonates. Maybe you can’t swing a custom
photoshoot right now, but a flexible design means that you can easily swap out pictures
when you do.
Chargeable services
In time-based fees the prevailing practice is to charge clients directly for all services
provided to them under a specific client contract, with the exception of services for which
it is impossible or impractical to charge directly.
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decided to do the work in his or her leisure time, if he or she attempts a reduction in
income, or if the service is subsidized.
Fee-earning days
Services to clients are costed and, in many cases, charged on the basis of consultant-
days (or hours or weeks). It is essential to plan for and attain the required number, which
may be determined as shown in the Box 5.1 (assuming a five-day working week).
The 190 chargeable days per consultant represent the expectation of a consulting firm
for the planned period. This is a 73 percent utilization of the total time, as determined by
the ratio:
Ch arg eable time 190
0.73
Total time 260
This is only a hypothetical example, and is not a standard figure. Every consulting firm
has to establish its own time budget based on local conditions and the firm’s experience
and strategy.
An alternative way of calculating this ratio is to compare chargeable time with days
available:
Ch arg eable time 190
0.84
Days available 225
Consulting firms often use this second ratio and apply differential rates to different
categories of consultants. A typical time utilization rate is 80-90 percent for operating staff,
60-80 percent for senior staff (supervisors, team leaders) and 15-50 percent for higher
management staff (partners, senior partners, officers). Operating consultants can achieve
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high utilization rates thanks to the marketing, planning and coordination done by their
senior colleagues. Data from various countries indicate that single practitioners who take
care of their own marketing and administration achieve utilization rates of 55-65 per cent,
since many of them have to spend as much as 20-25 per cent of their time on marketing.
Promotional fees
A promotional fee (say lower by 10-15 per cent than a normal fee) is sometimes used in
launching a new type of service in order to stimulate the clients' interest. It is understood
that it will be increased to a normal level at the end of the promotion period. This is
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acceptable if the clients are aware of it. It is unprofessional to get clients interested in a
new service and then, to their great surprise, increase the fee.
Subsidized fees
Governmental consulting services may be able, or even obliged, to charge lower fees to
certain or all clients. This is possible thanks to government financing, whose purpose is
to promote consulting and make it available to clients who would be discouraged by high
fees.
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be charged for a market survey, a feasibility study, a new plant design or a training course,
but not for a re-organization.
Other expenses
Expenses other than direct labor costs may be either included in the fee as overhead
expenses or charged directly to the client. It is important to make this clear to the client,
who should know precisely what kinds of expenses will have to be reimbursed.
Typical billable or reimbursable expenses are travel, board and lodging expenses of
consultants on assignment, special services arranged by the consultant (e.g. testing,
computing, printing, purchase of special equipment, drawings), long-distance
communication and document delivery. In addition to listing these items it may be
necessary to indicate the values, as for example, the expenses that the consultant
expects to incur in travelling to and from the client’s premises, and how much the client
is to pay for the consultant’s board and lodging, or for local transport during the
assignment.
In international consulting these billable expenses may be quite high, reaching 25-30
percent of the fees. There may be even a provision for family travel and accommodation
if the consultant is to work on a long assignment abroad. Expenses defined as billable
are not part of the consultant’s fees, but a separate additional item in the total assignment
budget and in bills submitted to the client.
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has an assignment with a client, and is offered an additional one by the same client for
the same period of time.
On the other hand, in costing assignments it is difficult to ignore changes in the cost of
living and price levels. A provisional for necessary cost increases can be made in various
ways, depending on the client’s and consultant’s convenience. For example, the contract
can include an “escalating phrase”, whereby the fees will be adjusted upwards in
accordance with the officially recognized inflation rate. Or a contingency provision (say 5-
10 percent of the total cost) is made, to be used by common agreement of the consultant
and the client for justified and inevitable cost increases, and for expenses that could not
be foreseen before starting the job.
Bill number
Period covered
Services provided (listing, dates, volume of work by each consultant)
Fee rates and total charges
Expenses billed separately from fees
When payment is due
How to make payment (currency, method of payment, account number)
Whom to contact for queries
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Date of expedition of the bill
Name, address, telephone and fax numbers of the consultant
Signature and courtesy formula
Let us assume that Kelvin Twite is a one-person consulting firm with an office and a
secretary. Kelvin would like to earn $60,000 per year in income. Theoretically, he has
2,080 hours available, which is 40 hours times 52 weeks. This would make his billing
charge $28085 per hour if he worked full time and had no other expenses ($60,000 ÷
2,080 hours).
But Kelvin’s life is not quite so simple. He also wants to take 4 weeks’ vacation, and he
estimates that he must spend at least 3 weeks per year on office administration. So 52
weeks has declined to 45 weeks available for consulting, and the billing charge has gone
up to $33.33 per hour ($60,000 ÷ 1,800 hours).
Next comes the hardest fact of life for Kelvin Twite; he must also devote considerable
time to developing new business, or he will wake up without additional clients when a
current job is completed. A typical allowance is 25% of one’s time for business
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development. Do Kelvin’s 45 weeks available for consulting is now reduced to 33 3/4
weeks, and his billing charge has increased to $44.44 per hour ($60,000 ÷ 1,350 hours).
Two additional expense charges must be added to arrive at a final billing rate. Let us
assume that Kelvin’s personal benefits for health insurance, life insurance, and pension
amount to 30% of his salary, which is a typical figure. So his income must be $78,000
instead of $60,000, and the billing rate thereby increases to $57.77 per hour ($78,000 ÷
1,350 hours).
A second major expense item is for office expenses, which we’ll assume to be $25,000
annually ($600 per month for office rent, $1,000 for a secretary, and the reminder for
utilities, supplies, printing, mail, and equipment). This brings the billing charge, at cost, to
$76.30 per hour ($103,000 ÷ 1,350 hours).
We will also add 15% for a reasonable profit before taxes because Kelvin wants to
reinvest in the growth of his business. All of this adds up to a final billing rate of $87.74
per hour ($118,450 ÷ 1,350 hours) or a daily rate of $700. Kelvin, is in essence, a $700-
per-day consultant, if he expects to reach his financial objective.
Once you have determined the “cost” of your time, never sell it for less. If you do, you’ll
not only sell yourself short, but you’ll put yourself in a financial bind when the bills roll in
for payment.
Time calculation
The second major step towards pricing a proposal is to estimate realistically how long it
will take to perform the work in terms of man-days.
The key point in calculating time is to break down the engagement into phases, such as
interviews, outside research, report writing, and feedback presentations. Each of these
phases should be assigned a realistic of days. The total will then be multiplied against the
consultant’s daily rate to arrive at overall cost for professional fees.
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7. Speak and present at events.
8. Make connections on social media.
9. Partner with another consultant
10. Start a blog
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REVIEW QUESTIONS:
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