This is part of my writing in public project for my new book – Becoming a Consultant. As such, this is a draft version of what will become the final book so although the ideas here are close to finished, there may be typos, mistakes, wild exaggeration or enormous factual errors. Please accept my apologies in advance.
A big part of the writing in public project is to make sure that you get the book that you need so if you see something that doesn’t make sense, or think there’s something missing that would help, please let me know in the comments below.
This chapter should make you think twice about becoming a consultant.
Yes, you read that right.
Remember, the purpose of the second part of the book is to help you understand how to run a successful consulting firm, and for that, you need to be able to win business but winning business is tricky. It’s particularly tough for practitioners who want to get onto the problem-solving aspects of the work, not spend time networking and pitching. However, building a sustainable pipeline is essential for the health of your business, and, most of the time, it’s not something you can (or should) outsource.
So I want to share a warts-and-all view of what getting business is like to get you to really think about whether or not you want to start down this path.
And if you do, great! Now you have a clear-eyed understanding of what’s required.
And if you don’t, you can tear up your resignation letter and stay in your stable, well-paid, in-house role, making this the best $20 you ever spent.
Warning – this is not advice on how to make sales
Sales is probably my area of greatest weakness, so I am not going to give you sales advice here. How to pitch your products, talk to prospects and seal the deal are things that I think are very much up to the individual to work out themselves, although there are several approaches you can use as a start. What we’re looking at here is a system you can build to ensure that you are constantly adding people to your pipeline, some of whom, over time, will become clients.
How can I find clients?
This is the critical question you have to ask when you’re starting out as a consultant, but for many, it’s not a question that’s asked early enough because the first job you get is easy: it’s with the firm you just left.
This might seem counterintuitive, but in most cases, an expert leaves their firm on good terms, and everyone wishes them well with their new consulting gig. Their departure might be because the individual fancies a change, but there’s often another reason, such as voluntary redundancy or some belt-tightening. However, these cuts don’t reduce the workload or the need for expertise, so it’s not long before the firm’s looking for someone to help move things along or solve a problem. And who better to ask than the guy or gal who just left.
Everyone benefits from this arrangement: the firm gets the expertise they need, and the new consultant gets their first gig.
However, it also leads to a false sense of security because the consultant hasn’t had to do anything to win this work. That makes it too easy for them to assume that work will keep coming to them rather than something they have to go and find.
It also masks a fundamental rule of running a small consulting business: days you’re working are days you aren’t looking for new business, and days you’re looking for new business are days you aren’t consulting.
There are exceptions to this, but if you’re with a client for 6-8 hours of the day, that leaves little time or energy for business development. (It’s also terrible form to be making BD calls when someone else is paying for your time.)
This means that our newly-minted consultant completes their first gig with the old firm, flush with cash and success, but then wonders why no new leads have come in. It turns out that the announcement of the new firm on LinkedIn wasn’t enough to drive new business your way, despite the 843′ likes’ they got.
So what can you do to generate a steady flow of leads for the new business?
Establishing a pipeline
The pipeline is the flow of leads you have coming in that eventually lead to new business. (FN – you can call this a funnel but be careful not to confuse this kind of funnel with online sales funnels, which are slightly different animals) You put contacts in at one end of the pipeline, and contracts pop out at the other. However, the problem is that the pipeline has holes in it – a lot of holes. In fact, there are so many holes that only a tiny proportion of the leads you put in will ever become clients. The other problem is that things can move slowly through the pipeline.
Therefore, you need a mix of perseverance and patience: perseverance to diligently keep popping new leads into the pipeline and nurturing them along the and patience because things will move at their own pace.
To set up your pipeline, you need a way to describe the stage someone is at in your pipeline. That will differentiate between steps so you know what to do next. (You’ll see different terms and definitions used in different contexts, so treat this as a basic outline that you might want to adjust as your business matures.)
I’m going to suggest you think about anyone in your pipeline as falling into one of six distinct groups
Your market is everyone who might need your services and have a way to get in front of. Therefore, ‘everyone’ isn’t a market, nor is Asia Pacific if you’re based in the UK and have no way to serve them.
So you need an unambiguous statement of what you do and for whom. This statement is both what you use to describe your business to others and what you use to help you stay focused. This definition should be as narrow as feasible to give you a very clear idea of your ideal customer, the imaginary version of which is sometimes called an Ideal Customer Avatar (ICA). Once you have your market and ICA, you start to look for leads. (FN – Try not to imagine your ICA as an individual as this will limit your market and result in you introducing a lot of inadvertent biases into your thinking. (Individual ICAs often end up looking a lot like the person imagining them.) Instead, think of a type of person by their role, type of industry, qualifications, professional memberships they would hold, etc.)
A lead is someone from your market that you think might have the kind of problem that you are uniquely qualified to solve. These are the folks you want to start a conversation with to get to know them, what they’re up against, and to see if there’s a match. If you have several conversations with the same lead, they move into the Prospect stage of the pipeline.
A prospect is someone with whom you’ve had several conversations about their issues, although there are times when a single conversation conveys the same depth and urgency. You’ve begun to shape out the contours of the problems and explored some ways you might be able to help. The next stage would be to send them a proposal for what you’ve discussed.
Landing the client – proposal to contract
A proposal contains a scope of work, duration, and price. It isn’t a rate card or some general sales collateral that you might share at any of the previous stages.
The proposal contains a brief summary of the prospect’s problem, how you would go around solving it (the process, not the solution as you won’t have that yet), critical times, and a price. The closer you are to describing what they are looking for, the closer you are to getting a contract signed. Unfortunately, there are lots of stumbling blocks that can crop up, such as:
- Your prospect isn’t the final decision-maker
- Their budget isn’t realistic
- They didn’t really want a proposal but agreed anyway to be polite
- They only want a price comparison OR need some numbers for their budget
- They need to submit several proposals as part of their procurement process
You can work through some of these problems with additional time and effort. (That said, if you have to work through several layers to get approval or start getting pulled into a complex procurement cycle, you need to assess the actual value of the job once you’ve accounted for the additional time you’ll spend winning the work.)
However, others are dead-ends that you can’t get out of. The sooner you realize this, the better. Trying to turn these into wins will frustrate you, and you’re fooling yourself about the health of your pipeline if you’ve filled it with ‘artificial’ proposals.
The bottom of your proposal includes a signature block for the prospect to sign and, if they agree, you’ll receive a signed agreement in your inbox. Angels will sing, your neighbors will line the street to applaud you as you pass, and you’ll heave a big sigh of relief.
Congratulations!. Now you have a client.
The leaky pipeline problem
I appreciate that this seems drawn out but even what I’ve described above is a simple version of what you might go through to get a new client on board. It can be a slow, cumbersome process and even when things move quickly to the proposal stage, it can still take months to get a contract signed. (In fact, beware of anyone asking for a proposal when you haven’t had much of a scoping call. You don’t know what they want, so you’ll probably miss the mark with your scope, or they’re just fishing for prices.)
And, keep in mind that your pipeline is leaky, so not every lead ends up as a proposal, far from it.
The attrition rate at the start is very high because the market is very large (even when you have narrowed it), so you can’t speak to everyone. Then, of the people you talk to or contact, most won’t want a follow-up for many reasons. But if only 10% of your leads want to have multiple conversations and become prospects, things really start to look up. Thankfully, the conversion rate from prospect to proposal to contract is much higher. Here’s an example of what a pipeline might look like.
These numbers are pretty gruesome and mean that we need to regularly put lots of new leads into our pipeline if we want a flow of new contracts.
That might seem like an impossible task given the numbers, but the good news is that not every contract has to start at the lead stage. We can short circuit some of this and jump people along the process to get from prospect to contract much more quickly.
Before we get people into our pipeline, we need to establish ourselves as experts in our field and build some name recognition. So you need to establish yourself as someone credible in your field who knows what they’re talking about. That way, when someone has a problem, they either 1) recognize your name having seen it somewhere, 2) are able to look you up to establish your credentials, 3) have your name on a mental list of folks they’d call or 4) recognize your name when someone else recommends you. This way, you’re less of an unknown quantity when you first engage with a prospect as they’ve some understanding of your track record, expertise, and way of thinking.
There are lots of ways to build this kind of awareness, for example:
- Write a blog or newsletter sharing your ideas and thinking about your area of expertise.
- Speak at conferences for your industry or your target market
- Publish articles in professional journals or op-eds in the general press
- Build and manage a community, sharing ideas around your area of expertise.
Each takes time and effort, so you need to balance this investment with the other demands on your time. You also need to persevere as there’s little or no immediate pay-off with many of these.
The key with each is to keep showing up. A single newsletter or speaking engagement isn’t enough to break through the noise of everyone else who’s competing for your ICA’s attention.
Remember, marketing is a one-to-many exercise where you’re speaking to a large group at once to share your ideas and make them aware of your business.
Sometimes, a newsletter will hit someone’s inbox at just the right time, or a conference attendee will be looking for someone just like you and a sale will result. But generally, the intent here is to establish your credibility and generate name recognition in your market, which will make it easier to start conversations once you identify your leads.
One quote from Seth Godin helps keep me oriented when I’m marketing: “Marketing is the work of helping people get what they’ve wanted all along. Marketing is about establishing the conditions for a small group of people to eagerly spread the word and build connection.” Godin reminds me that my purpose is to share my ideas with as many people as I can, as selflessly as possible, because many of them are looking for what I have to offer and I can only help them by sharing ideas. Even if they aren’t going to hire me, I can still be of service. But, if the stars align, I’ve now built lots of connections, a proportion of which will turn into leads.
However, marketing by itself won’t fill your pipeline, so now we need to go out and start talking to people.
Filling the pipeline
The term pipeline or funnel can be a little misleading as it can make it seem as though the process is very linear: someone can only enter the process as a lead and hopefully emerges as a client at the other. But just as leads can leak out of your pipeline before they become prospects, someone can enter your pipeline at the proposal stage.
Someone joining later in the process is ideal and makes our otherwise depressing conversion numbers look much better, so in addition to adding as many leads as possible to the start of the process, we also need to add folks at each stage.
Filling the top – lead generation and qualification
Leads are people you’ve interacted with and want to speak to but trying to talk to all of your potential leads is a non-starter. Even within your narrow market with your ICA in mind, you’ll need to be more selective to increase your odds of a lead becoming a prospect. This is where lead qualification comes in.
Qualifying leads means checking that the foundation for a work ‘match’ is in place. If someone doesn’t need your services, operates in a sector that you’re not familiar with, or doesn’t have a budget, there’s no viable pathway for you to help them with their problems.
Unfortunately, that’s not always apparent until you start speaking to them, but you can improve your odds significantly by pre-qualifying leads. You’ll check that some essential preconditions for working together are in place before you start any discussions.
This isn’t as much work as it might seem, and you can easily qualify leads using part of the BANT — Budget-Authority-Need-Timeline – sales framework by adding M (Market) at the front.
- M – Market. Are they in my target market, and do they match my ICA?
- B – Are they likely to have the budget to afford my services?
- A – Is this person a decision-maker or decision-influencer (someone the decision-maker or check writer trusts to advise them on who to work with)
- N – Are they likely to need my services?
- T – Is there time pressure for them to take action?
A ‘yes’ for M, B, and A is enough to qualify someone as a lead that you would want to talk to. And even though need and timeline aren’t probably known to you until you start speaking to the person, there may be some hints: news that the firm is in a tough place might signify a need, or pending legislation might suggest that there’s a deadline for them to make changes.
So by using MBANT, you’re able to qualify inbound leads (those that come to you) to help you focus on those that are more likely to be a match.
You can also use this formula’s M, B, and A elements to identify outbound leads: leads to go searching for in places like LinkedIn or industry journals. For example:
- M – Your area of expertise is supply chain management for home construction in the US mid-West.
- B – You know that there are lots of mom-and-pop firms, but they probably don’t have the budget for a consultant. Meanwhile, the larger national operators are slow to make decisions and hard to work with. You settle on mid-market firms (~$250-500 million annual revenue) that only operate in the mid-West.
- A – You know that each of these firms will have a procurement manager who would be the person who would have most need of your services and likely be a decision-maker or influencer.
So by searching for Procurement Managers at mid-market home construction firms in the US mid-West, you’re only going to turn up leads that are already close to your ICA.
Anything outside these parameters should disqualify a lead at this stage, so be confident and stick to the criteria you’ve identified. I’m not saying that someone who comes to you and is a good fit for your service but doesn’t meet these criteria precisely gets turned away. They’ve sought you out, so you should engage with them to see if there’s a match.
However, stick to the criteria you’ve defined when it comes to drawing up your list of leads you want to approach. You’ll find that this narrow focus helps you concentrate your energy and attention ( and valuable time), which makes business development much easier compared to a’ boil the ocean’ strategy that has you chasing anyone with a corporate credit card.
Keep in mind that you should qualify your leads just as thoroughly in later stages of the pipeline when they come to you. No matter what stage of the process you’re at, you still need to ensure that you are a good fit for you and vice versa.
Finally, if you find that your initial avatar isn’t working, go back to first principles and assess your offering, the market, and the assumptions you’ve made in light of the feedback you’ve been getting and adjust your approach as necessary. But don’t worry about that for now. Now, it’s time to start contacting your leads to see if you can turn them into prospects.
Contacting your leads
Now that you’ve got your list of qualified leads, you’ll need to make contact. Unfortunately, how you do this is one of those ‘it depends’ answers: there are too many different variables here for me to give you specific advice that will work for everyone. However, think about these factors to work out the approach that will work best for you and your industry.
- Your personality. Are you the classic extrovert who gets all their energy from talking to people or the introvert who feels itchy just at the thought of meeting a bunch of new people?
- Your industry. Different industries do business differently, so you’ll need to stick to what people expect as a start. That might mean knocking on doors for some people, trade shows for others, while some might use cold email.
- The marketing that you’re doing. You’ll already have created some openings if your leads are already seeing you at speaking engagements, writing a blog, or posting thoughtful articles on LinkedIn. You can build on this foundation with targeted follow-up to qualified leads.
Keeping these three points in mind will help you work out what will work best in your market, but also take into account the kind of approach that you’ll be comfortable with. People will notice if you’re uncomfortable or doing something you hate, which will get in the way of your conversations.
However, no matter how you do it, the main thing is that you need to start approaching people to set up conversations.
If you recall the section on developing understanding, I said that the best way to start a conversation was to ask someone about themselves, which also applies to business development.
Don’t run into every conversation trying to make a sale whatever you do. That’s not going to be very successful, and even in the unlikely event that you do land a client, you’ll know next to nothing about them, and the role engagement is off to a bad start.
Instead, start by learning about them and what’s on their mind. Then see where there might be an overlap between what you do and what they need.
But keep in mind that this is probably something that takes several conversations. The first few times you chat, it might be to learn more about them, see what’s on their mind, and build rapport. You’re not trying to make a sale: instead, you’re building a relationship and gathering necessary market intelligence. After a few conversations, you’ll spot patterns and common themes:
- The problems facing a sector?
- Market issues affecting everyone’s budgets?
- Maybe concerns over impending legislation?
These will make you more informed and better able to save future clients because you can speak with more authority in future conversations. Being able to say, “interestingly, you’re the third procurement manager who’s said that to me in the last week,” shows that you’re connected to their industry and paying attention to what’s going on.
There are many different frameworks for sales conversations, and the one that’s best for you will come down to industry and personality. But, whatever approach you take, make sure it’s a conversation and that you’re doing more listening than talking.
Filling the middle – prospecting
A percentage of the leads you speak to will start to discuss a specific need which means you’re getting close to being asked to send a proposal, but this can still take time – weeks or months might pass from the first meeting to signing an agreement. So, in addition to converting leads to prospects, we also want a way to add prospects directly into our pipeline.
In this middle stage, instead of waiting for leads to come to you, you’re going out and actively pursuing prospects. You’ll still be applying the same MBA criteria you identified for your leads, but now you’re going to look for prospects where you already have some meaningful connection. Unlike the connections you have with your leads, which are much more likely to be virtual or very loose, the relations you have with your prospects are closer and more direct.
So, instead of contacting someone who reads your emails occasionally, you’re now reaching out to people you’ve met in real life, have a mutual professional connection, or perhaps attend the same business roundtable. These are much closer connections with fewer degrees of separation.
However, don’t abuse the access you have to these prospects. You shouldn’t pitch everyone you meet at business functions, nor should you think of your friends simply as ways to get introductions to potential clients.
You still need to approach your conversations thoughtfully and carefully and not rush into a pitch. However, even though this still takes time, you’re starting your conversation on a more trusted basis, much faster than you would if you were converting a lead. This shortens the time between your initial conversation and an invitation to send over a proposal which helps maintain a healthy middle section of your pipeline.
Fill the bottom – relationship maintenance
Now that we can fill the top of the pipeline (with leads) and the middle (with prospects), we can think about the bottom of the pipeline, where prospects become clients. Your primary focus here is to deliver exceptional service to your clients, but there’s also a degree of business development involved because you’re building strong, close relationships as you deliver the work.
Over time, these relationships will help fill the bottom of your pipeline directly through follow-up requests for work from the same client or via their referrals to others who are in the same position.
For many consultants, this is going to be your first source of business, similar to our hypothetical constant at the start of the chapter: the firm you just left will invite you back in. (FN – These invitations have a limited shelf-life in my experience so although these are a great way to kick things off, don’t rely on your old firm asking you back year after year. 2-18 months seems to be the average life-span of these engagements, after which they’ll have overcome the shortfall and won’t need you to plug the gap.)
Nevertheless, these connections – your former employer, previous coworkers, past clients, and close colleagues – will be a rich source of work because you’re a known quantity. You’ll still need to maintain these relationships, but you’re now past the pitch stage and are building more profound, more meaningful connections with people with whom you have a shared history. That way, you’ll be top of mind when they need your services or know of someone who needs your help.
If you zoom out for a moment, you should now be able to imagine a series of circles or a bullseye with a large outer ring containing lots of leads, a narrowed middle ring with several prospects, and a small circle at the center which contains your close connections. Work will come from each of these groups, and, over time, leads will work their way from the outside to the center where they become clients. Continually nurturing the relationships at each stage will help fill your pipeline with a steady flow of leads, prospects, and connections, giving you a sustainable, steady flow of business.
Gizmos, gimmicks, and shortcuts
At some stage, you’ll read about or be approached by folks offering some great shortcuts to get you qualified prospects or lots of leads. These will seem like a great way to fill your pipeline quickly.
Sadly, in my experience, there are no real shortcuts to getting clients. There are very few (if any, depending on your sector) web tools that can magically fill your pipeline with high-quality leads. Buying an email list can get your email flagged as spam really fast. Partnerships and paying for business development rarely work and are not things you want to touch as you start out on your own.
Some things can work on occasion, but, in my experience, the negative results massively outweigh the benefits, so proceed with caution. As actor Light Watkins says, “doing the work is the shortcut.”
A big part of the writing in public project is to make sure that you get the book that you need so if you see something that doesn’t make sense, or think there’s something missing that would help, please let me know in the comments below.