Where else would you start a blog post about leverage than Archimedes? And where else would you go for the 'but' other than Terry Pratchett ...
Before giving you a useful template to help you choose the right activities for you, I want to share with you a story that was shared with me by Mike Burdette of Second Sight Business Solutions in 2004.
Apart from being acutely observed it is an example of how to succeed in a crowded marketplace:
"Whenever I travel to London, I buy an Evening Standard newspaper from the same vendor on the Victoria Station concourse. He stands right outside WH Smiths, who also sell 'Standards'; within 100 yards there are three other vendors, also selling 'Standards'.
My vendor cannot compete on price -it's fixed at 40 pence, he can't promote himself more than the others as they all have the same billboard, (except WH Smiths whose presence is infinitely greater); he cannot compete on distribution channels-that is fixed, he stands where he stands.
But surprisingly, he competes by offering an enhanced product. This vendor folds the 'Standards' in half, so they are ready to be tucked under an arm, and, in the quieter moments between sales, he makes sure that his very small countertop has piles of small change, ready for all eventualities - 60 pence for those paying in round pounds, a pile of four pound coins for those paying with a fiver, fivers in his left pocket, tenners in the right.
The result is that his 'product' becomes an Evening Standard, under the arm, with the exact change in 5 seconds. He uses his one and only piece of room to manoeuvre to create strategic leverage."
Do bear in mind that Mike wrote this in 2004 and, of course, all strategies eventually succumb to changes beyond your control. Part of choosing what levers to pull is to be confident that you will recover the costs whilst you still have the advantage and be agile enough to change strategies as the world changes.
There are complex models on the market for larger companies, but as a single-handed consultant, this can be a bit of a sledgehammer to crack a nut. So, I've scaled it down to examining where is your room for manoeuvre using an adaptation of Micheal Porter's 4 P's of the marketing mix.
Let's look at some other examples drawn from my experience against Porter's 4 Ps.
Positioning
How do you mark yourself out to be distinctive? By either performing different activities from your rivals or performing similar activities, but in a different way. Returning to the Evening Standards vendor. He added value by performing similar activities in a different way to his rivals.
Place
This is where you intend to operate, where your customers are based and, more importantly, where they shop for your type of services, locally, nationally or internationally. The shift from face-to-face to online services is a good example and one I experienced personally.
The Covid lockdown meant moving my services from groups in a training room to providing online services meant that physical geography was no longer a barrier to delivery. However, it also made me focus on my one-to-one mentoring services rather than group courses. The emergence of AI and increasing automation is taking this further by removing the time barrier as the customer can access the mentor's knowledge without the mentor being present.
Some other ways my clients have reconsidered their approach to place include overseas staffing for hard-to-fill vacancies, and the likes of high street accountants reduced their bricks and mortar presence as customers actually come via online promotions. Place can also be a fixed entity, many of my clients have designated territories through franchising.
Product
This is where most consultants look for their uniqueness. However, for most consultants, the market is pretty crowded. Stating you offer high-quality services is taken as a given and is not a differentiator.
Few single-handed consultancy practices can sustain a market position on their product unless it is hard to reproduce. Definitely best to consider the added value you bring ... your equivalent of the Newspaper vendor.
Price
What to charge for your product depends on the rest of your positioning. The most common error amongst consultants is to underpricing. High-end clients expect to pay higher prices, but expect a high level of service as a given.
Care should be given in offering discounts and special offers so that you are not digging the familiar trap of ending up servicing double the clients for the same amount of money.
As time is usually the enemy for the stand-alone consultant, doing the maths on the Return on Investment for discounts may be the best investment you make! Ditto when offering credit or working for large organisations who will want payment terms which will affect your cash flow.
Promotion
Finally, unless you get the attention of your customers in a manner that makes them give serious consideration to what you're offering all the above will be in vain. I'd put deciding your target market as key to how you approach this.
Knowing what your customer actually wants when buying from you requires you to observe what your potential customers actually do and listen to what they say they actually gained from working with you.
I'll end this blog post with another personal example. When first setting up my own services in business coaching for SMEs, I entered a very crowded market. I noticed pretty quickly that the clients I actually wanted would hire me ostensibly to look at their business, but usually within the first session, they would confide in me about some relationship or personal issue that was troubling them. Usually with the comment, "I've never shared this with anyone before".
This made me steer my own practice towards promoting my services to be about working relationships. I undertook further development in mediation skills and now, as a mentor for others, position myself as offering support, guidance and coaching for consultants coming out of employment and setting up on their own.
We work with the other stakeholders needed to support them to build their consultancy.
If you'd like to learn more about referral marketing then do give me a call on 07970 638857 and let's have a chat and see how I can help you.