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Creating & Promoting Consultancy For Knowledge Commerce: Guide
Consultancy services are the easiest to start … but it takes a lot to satisfy a customer
According to the Harvard Business Review each year management consultants receive more than $2 billion for their services. Much of this money pays, they say, for impractical data and poorly implemented recommendations.
"They add: Clients need to ask more from such advisers, who in turn must learn to satisfy expanded expectations.” This is a client's point of view.
Another description I’ve read is this one: “If you’re not part of the solution there’s good money to be made in prolonging the problem”. This could be a mischievous consultant’s point of view. This second explanation sums up to me why people get suspicious before hiring a consultant. It’s tough to quantify what attitude you’ll get for what you pay.
To learn how to make a success of consultancy creation and promotion ... read on.
What role should a consultant play for a customer - and what should he not
The best and smartest approach to coming across as an ideal consultant is to be exactly like a doctor. A patient usually comes to a doctor complaining of the symptoms. It’s the doctor’s job to diagnose the underlying problem if he wants to cure the patient.
A doctor who is only worried about the cure but not the symptoms will not satisfy a patient. Neither will a doctor who merely palliates the symptoms but doesn’t have a cure for the underlying disease. A consultant has to help a customer with both: his immediate symptoms or problems as well as the underlying causes of it which will require a permanent cure.
Very few customers will know exactly what problem they have. They only know how to explain what bottlenecks they suffer from, or what pain-points make them uncomfortable enough to seek paid help. That’s why every consultant needs one skill above all else – the skill to elicit from the client the layers of the problem, until he comes to the root cause.
What a consultant should never agree to do is “the dirty work” for a customer. You have four roles to effectively play in a customer’s life. First, help the customer clarify his problem. Then show him some solutions to implement. After that, help him fortify his business against similar problems in the future. Finally, help him systematize the solution and absorb it into his daily workflow.
Understanding why someone may hire you - there are usually three specific reasons
Most customers come to a consultant after they’ve done a lot of thinking on their own, but their thinking has fallen into a rut. They find themselves incapable of objective judgment because they are too close to the problem. They seem to be getting the same ideas when they think of the problem. Getting in a consultant brings a fresh view to their issues.
Another possible reason: No matter how creative a customer is, there are times when he may feel like “two heads are better than one”. Especially if the customer is a solo entrepreneur or small businessperson, there may not be a team he can rely on to tell it like it is - or to open a new set of ideas.
Sometimes in a customer’s life, some specialized skills may be needed from time to time, which are not necessary to hire for long periods. There may be certain specific issues to deal with and finish with. For example, a customer may want his site restructured to match the new SEO rules.
A consultant in such cases, is a person who can step in and out of a customer’s life doing just what’s needed. He can also help set up rules and guidelines that the customer can maintain on his own in the future. Most consulting assignments tend to begin with such specific needs. Some later evolve into longer-term relationships.
The 3 big challenges of a consulting service - look at these three areas
Consultants, who don't want to be pressured to search for clients between consulting assignments, need to ensure they do their marketing daily. Don't do marketing only when you need to. You should be marketing even when you don't need to - and when you have clients on hand. That keeps prospects all the time in your pipeline.
Customers who come for consulting help prepare themselves to pay high. But they are also overloaded with expectations that are very hard to deliver on. To enjoy long-lasting relationships in consulting, you need to keep showing value. Throughout the consulting project customers must feel they are continuing to get value which outweighs the costs.
Unless you create reasons for customers to continue the connection with you, you may find they begin all over again with another consultant for the next project. This happens so often that consultants are left wondering why clients leave when they have done nothing wrong.
What you need to do is to include in your projects some periodic reviews after project completion. Offer these free of charge as extras. Give yourself the opportunity to elongate the connections with customers to pre-empt them from looking for greener pastures.
Pricing of consultancy services - there are many models you can follow
One method consultants use to charge customers is hourly rates. But it's not about the hours you think you are going to spend on the assignment. There are authoritative sources that tell you approximately how many hours a project should take.
There are two ways to charge customers by projects. One way is to add up your costs, add your desired profit margin, and give the customer the quote. This is how the smaller consultants work. But big-ticket consultants have a riskier but far more lucrative method of charging.
They check what additional revenue or cost-savings they can bring to their customers as a result of their handling the assignment. They then declare that they have a base consulting rate, but will also take 20% or so of the revenues or cost gains the customer derives - as an additional fee for achieving or exceeding targets. They show they are ready to risk a part of their fees to deliver the results.
Consulting on a retainer basis will give you a fixed monthly fee for which you agree to be available for a fixed number of hours per week or month. This kind of consulting arrangement is usual when the customer and the consultant are both in favor of fixing the money involved.
To learn even more of this topic, read on ...