Million Dollar Consulting Review
Probably the canonical book on becoming a consultant. It was key when I set up my business consulting business and is what I share with anyone asking for advice, alongside this article about how to leave your clients with a warm fuzzy feeling.
Whilst ge doesn’t really cover how to identify your value proposition or niche, he does hammer home the concept of charging based on Value Not Time.
This is also a good starting place to learn about the mindset and language of a consultant, especially how to overcome objections.
Million Dollar Consulting Book Notes
His path: consulting in organisational development. ‘Improving individual and organisational performance.’
Focus on process consulting.
“Consultant: An expert in one or more identified areas who partners with a client to improve the client’s condition.”
Balance between resolution of important issue and transfer of skills.
– Important Issue No Transfer = independent expert
– Low importance issue Transfer = interventionist
– Best consulting is transferring vital skills as resolving important issues.
“Expertise: Great consultants teach others how to do what they do and do not create codependencies. Counterintuitively, the more intellectual property you transfer, the more the client will value you.”
Progress of a consultant:
2. At Request (RFP)
3. Project Implementation
4. Project Oversight
Aim to Dominate a Niche:
2. Streamline your model
3. Develop IP
4. Delegate to Client
Where to start:
Focus on business outcome, bottom line improvements: sales, costs etc. Focus on them wanting to say, how do you do that?
We improve individual and organisational performance
Target Market: Directors of Companies
Sweet Spot: Driving Performance
Component 1: Financial and Data Analysis
Component 2: Making the most of Technology
Component 3: Uncovering Business Bottleneck
Component 4: Establishing Business Processes
Key is to get them to come to you. Create Marketing Gravity:
– Free work
– Guest Posts
– Media Personality
– Word of Mouth
– Trade Associations
Marketing Accelerator Curve
1. Roadmapping Session
3. Online Course
1. Monthly Mastermind
3. Project Work
1. 1-1 Coaching
2. SMT Non-Exec
- Brand Creation – Name
- Brand Building – IP
- Brand Equity
Unified Theory Of Consulting
- Value Proposition
- Ideal Customers
- Market Gravity
- Accelerant Curve
Turning Prospects into Clients
- Create Evangelists
- Create Opportunities hosting events
- Use Testimonials
First time meetings:
– Treat everyone as a peer not a supplicant
– You offer the value
– Match their speed regarding the project
– Guide conversation
– Push back as appropriate
Meet 2 buyers a week minimum
Focus on referrals and repeat business
- Expand network internally
- Follow buyers to new positions
- Ask for referrals
- Get video testimonials
- Offer to bring new people up to speed
- Never stop marketing to new prospects
- Nurture your evangelists
The Relationship Business
Trust = reliability truth credibility conviction
Proposals are based on objectives, metrics and ROI – you need trust for someone to share those with you.
Must satisfy their personal objectives in additional to business issues.
Use Peer Level Language.
Own the ride and move the conversation to the destination.
Learn how to interrupt politely:
– May I stop you right there? You’ve said something I think is vitally important, and I want to make sure I understand it.
– Excuse me, but I think you’ve said in three different ways that attrition is the major issue, is that right?
– Pardon me, but can we discuss that last point further before moving on?
– May I summarize what you’ve been saying, to make sure I’m on the right track?
Elements of an agreement:
1. Objectives – ask Why? to get there. Focus on real business impact.
2. Measure of Success – monitor success, demonstrate value, agree accomplishments.
3. Value – impact of meeting the objectives.
- 4-6 objectives
- At least 1 metric per objective
- At least 3 value statements per objective
- At least half value statements are monetized (take conservative range)
Focus on offering value:
1. Get on buyers radar screen
2. Offer immediate value in conversation
3. Follow up appointment
4. Conceptual agreement
Here is the formula:
1. 2 buyers a week in person (100 a year)
2. 50% agree to meet (50)
3. 50% consider a proposal (25)
4. 50% accept proposal (10)
5. There you have your average fee (needs to be £10k)
Value Based Fees
Based on the value you contribute to the success of the project.
Charging by the hour is for amateurs. The client is better served by how quickly you can meet the objectives and leave.
Aim for 10:1 investment. Both tangible and emotional (e.g. stress relief, better media relations, seen as a leader and innovator).
If client asks why you don’t charge by the hour: “My fee represents my contribution to this project with a dramatic return on investment for you and equitable compensation for me.”
Never give a fee whilst gaining conceptual agreement if pressed: “It would be unfair to you for me to cite a fee without carefully considering what we’ve discussed, which I can do quickly and have a proposal on your desk within 24 hours”
Retainers are fees paid in return for access to your smarts
Not deposits to deduct hourly fees from. They have access to you as a sounding board, trusted advisor and objective source. No ‘hands on’ just brainpower.
1. Numbers – how many people have access (1-4 ideal)
2. Scope – hours of access, communication methods, speed of response.
3. Duration – 90 day minimum paid quarterly in advance.
Access to you that the client initiates. You don’t call in, check up or suggest things. Reactive, not proactive. Mentoring not coaching.
Don’t do projects as part of a retainer. Min $7,500 a month.
Best retainer clients are:
1. Clients happy with past work
2. Follow on from a project
3. Larger businesses
Use options in proposals.
1. First option must meet all the objectives
2. Successive options should include those prior
3. Fees scalable with the options
Summations not exploration or negotiation.
- Situational Appraisal: couple of paragraphs defining the clients needs
- Objectives: outcomes as bullets. Not deliverables or tasks or inputs
- Metrics: min of one per objective
- Value: ROI of meeting these objectives (min of half monetised and 10x return)
- Methodology and Options: 3 options
- Timing: time for completion (in days/months)
- Joint Accountabilities
- Terms and Conditions: in pricing, very simple. Include upfront payment discount
Don’t present proposals in person.
– Conceptual agreement made in person
– Proposal sent
– Follow up in 24 hours by phone
Establish follow up time and date before leaving meeting.
Ask which obstacles are preventing them from committing.
If no ask what could have done differently to convince them to have accepted your help?
Start immediately and schedule first meeting in next week or so.
“My fee is based on my contribution to the project and represents a dramatic ROI (return on investment) for you and equitable compensation for me.”
- Create value
- Promote the value
- Create equitable fees for the value
Must focus on needs. Converting business outcomes into value:
1. What will these results mean for the company?
2. How would you assess the actual return?
3. What would be the extend of the improvement?
4. How will impact the bottom line?
5. What are annualised savings?
6. Intangible impact?
7. Personal impact?
8. Scope of the impact?
9. How important?
10. What if fails or do nothing?
Be conservative and take bottom of range or half a number.
Paid not to take action but to achieve results.
Value is about enhanced results not frantic activity.
- Value is an improved condition
- More value in improvement than problem solving
- Value is perception
- Value can be quantified and qualitative
- Not time dependent
Focus on what they need not what they want.
Need to maintain and grow value in eyes of the beholder.
- Minimal Distruption
- Autonomous Control
Continually demonstrate value and make your role clear.
Focus on corporate and personal objectives
Respect not affection.
Self worth is constant. You are not the results.
Skills application success more learning
Find people like you: family, colleagues, advisory board, volunteer, virtual relationships.
Must be on same level as executives.
You are a learned expert adding value not present in the company.
- Dress well
- Don’t take in much to the meeting
- Know manners
- Well rested
- Check Mirror
- Be Calm
- NO slides in a 1-1
- Conversation not a pitch
– Use numbered lists
– Ask rhetorical questions
– Reverse Objections
– Provide Options
Focus on marketing not selling
1. Limit social media to <1hr
2. Test new ideas
3. Use groups
4. Not good for advertising
Acquiring and sustaining business is all that matters.
- Offer existing products to new customers
- Offer new products to existing customer
- Offer existing products to existing customers
80% repeat business 20% new business
- Never lose contact with buyer: weekly updates
- Meet new buyers
Never wait to ask for a referral until the project is completed. Wait until it is about two-thirds completed, then use this language:
“Referrals are like the coinage of my realm. Almost all of my work comes from referrals from delighted customers. I think we’re both ecstatic about our results to date, so I’d like to ask a favor: Can you introduce me to three people who you believe can profit from the same type of value?”
Make a list of everyone your know
1. People you think can purchase for you or provide referrals
2. People who might
3. People who wont
Call 1. Ask for three names
Write to 2.
Email list for 3.
Follow up on Referral “I’m Jim Hutton, and Sarah Ward has introduced us by e-mail. I don’t do this often, but in the past her advice to meet with someone has always been extremely valuable. I’ll be in your area on several occasions and wondered if we might spend 30 minutes together. I promised her I’d contact you and get back to her.”
Never get them to represent you just refer you.
Create at least 1 video, podcast and article a month.
Single Product > Multiple Media > Series > Personal > Community
Retainers are fees for access to smarts not hours or implementation.
- Cited by others
- Hired as trusted advisors
- People come to them
Should be your goal.
To the question of we can do that ourselves:
1. Then why haven’t you?
2. How’s that working out for you?
Current resource is utilised. Or those that are available aren’t the best. Internal biases. Not experts.
– Better proposals
– Go Last
– Personal Objectives
Limit sweet spot to 4 areas
- Ethics: Just do the right thing…
- Go Global
- Get leverage: subcontract, partnerships etc
- Productivity and routine
- Advisory Boards
- Relationship business
- Multidimensional growth
- No limit to income – help others first
Be number one on your own terms. Define and invent yourself.
Focus on having no competitors.
Intersection of Need, Competence and Passion.
1. evergreen preexisting need (strategy, leadership, sales)
2. Created need
3. Anticipated need
- Personal relationships are key to the foundation of self-worth
- Don’t just drop baggage – throw it off the train
- Positive Self Talk