Channel Strategies for Independent Consultants
“I don’t need a channel strategy, I rely on word of mouth for referrals.”
We hear this a lot, but the reality is it’s true for only a small fraction of independent and smaller boutique consultancies. And even those whose businesses have grown exclusively on unsolicited referrals find they need to replenish their pool of champions if they want to grow and maintain bookings.
Our research suggests that Catalant and other marketplaces typically provide 15-60% of revenue in growing consulting practices. A wide range to be sure, but this research also confirms that successful independent consultants rely on a multi-channel approach.
This article defines channels as the different paths available for independent consultants like yourself to find relevant client opportunities. Our goal is to help you invest your time the right way and in the right places to support your goals.
4 Channel Strategies for Independent Consultants
Four primary channels feed the pipelines of thriving independent consultants and smaller boutiques.
- Existing clients know your work firsthand and are willing champions.
- Potential clients know you and your work but haven’t directly engaged with you (yet!).
- Partners are other consultants who provide opportunities to partner, collaborate, or sub-contract.
- Marketplaces give you access to clients with defined needs, but no existing relationship.
The lifecycle stage and goals of your practice inform the optimal time and resource allocation across these channels. But life is clearly better — and easier — when you can sustain and grow your business through organic word-of-mouth from existing clients.
Let’s explore the unique benefits, opportunities, limitations, and challenges of each channel.
1. Existing Clients
It’s no secret that successful consulting practices crush it on the “3 R’s”: repeats, referrals, and references. Independent consultants understand the value of each client and go above and beyond on engagement delivery. But this only really covers the first R (repeat business). High-performing practices also expertly leverage existing clients for proactive referrals as well as passive references.
Which would you rather lead, a practice that aims to grow off a base of 20% repeat clients or one with a base of 80% repeat clients? The answer is obvious (80% repeat clients), and highlights the challenge of this channel–not everyone has enough existing clients to survive and grow. Therefore, the goal of every other business development channel is to expand existing Clients.
- Focus on referrals and referenceability (via cases, etc.); not just repeats.
- Use methods that keep you connected to clients, like retainers or complimentary coaching services.
- Let the well run dry. Even basic revenue maintenance requires expanding this channel.
- Confuse the buyer and the client. Buyers moving on should create opportunities for you, not risks.
2. Potential Clients
Not every contact is a potential client. We repeat, not every contact is a potential client. Define potential clients as people who know you and really know your work. Prime examples include former colleagues, contacts referred to you by an existing client, and possibly even alumni networks from your former university or employer if they already know the type and quality of your work.
This channel also tends to produce the most pain. Many practices, especially in earlier growth stages, invest heavy energy in this channel. Most growth forecasts hinge on boosting performance in this area.
While it’s tempting to assume that X% of potential clients are capturable in any given year or quarter, this overlooks an important truth — potential clients know you but don’t necessarily have a compelling need for your services.
- Maintain consistent contact. Favor relevant content and direct outreach.
- Turn client referrals into potential clients. These are the highest “potential”.
- Expand the list. If it’s too thin, find more people that fit the definition — don’t expand the definition to fit more people.
- Over-estimate capture probability or frequency. Even warm leads are a long game.
Mature consulting practices and practitioners tend to view other consultants not as competitors but as part of a mutually beneficial ecosystem. Sure, on a particular project at a particular time, this may be a win-lose relationship, but the other 99% remains open as a channel for business development.
We could dedicate an entire article to navigating prime partner-sub relationships but for channel purposes we first want you to consider how you and any potential partner fit. Good fits tend to add either capacity (delivering more of what the partner delivers) or capability (delivering related and relevant added value to what the partner delivers).
The primary challenge is sustaining consistent relationships and remaining top-of-mind. It’s easy when you’re working together, but as you each move on to the next engagement, the focus tends to shift. As a channel, partners can be the most difficult to forecast and rely upon. Developing a partner ecosystem can take a long time to develop and be difficult to maintain.
- Be a good partner. Help those who help you.
- Stay in direct contact — it’s the only way to maintain these relationships.
- Rely on too many partners. Aim for fewer but stronger.
- Peg high-growth expectations to partners, you have less control here.
The newest entrant in the field of essential channels for independent consultants is the marketplace. This experience ranges from highly facilitated (like a match-making service) to completely open (like an Amazon shopping experience) but most fall somewhere in between. They use human intelligence to present clients with the best set of consulting options to choose from for their projects.
The game-changing benefit of the marketplace channel is access to a near-infinite set of projects you’d otherwise never see. And when compared to the time investment in traditional new client pursuit and capture, the ROI can be substantial and quickly add to your existing client’s channel.
But this easy access is also the Achilles’ heel. Consultants typically face up to two competitors when bidding on projects developed in traditional channels. Marketplaces move consultants right to the pitch and bid stages but may also increase the competitive set to 10, 20, or even more.
There are proven best practices for winning in this environment, but even the top marketplace performers see more losses than wins on their scorecards. The trade-off for lower barriers to new client entry is greater competition. Marketplaces favor those who prove they delivered similar client projects in the past.
- Differentiate on direct experience related to the client’s exact project.
- Price your services based on the project value to the client.
- Differentiate on background or general value propositions.
- Chase projects with lower win probabilities.
Put Together a Channel Strategy
In summary, when considering your optimal channel strategy as an independent consultant or small boutique, remember the following tips:
- Leverage existing clients — they are the most important asset to your practice when you focus on all three R’s.
- Narrowly define your potential clients and then develop and pursue them individually.
- Maintain close relationships with fellow independent consultants.
- Use marketplaces to pack your profile or pitch with project-relevant content. It’s about the work you’ve done and its impact on clients. Period.
Bonus tip: Remember that all content has an audience and should be targeted to each. Use marketing and content to speak to your most important audiences including existing clients, potential clients, and partners — not the entire universe.