The 3 P's of Market Expansion at Boutique Consulting Firms, a Talent Response White Paper
Talent Response's framework for consulting market expansion and market entry: Prototyping, Promotion, and Partnerships.
We’ve helped many small and mid-sized consulting firms establish and expand their presence. Reflecting on the common elements across the most successful market expansions, we propose a framework: the 3Ps of Consulting Market Expansion.
How many times has your consulting firm helped a client step back to think more strategically about growth? Even for consultants that “dish out” strategic advice for a living, it can be all too easy to power through an expansion effort in execution mode.
We hope this white paper pushes boutique consulting firms to think differently about expanding their firm presence. Best-in-class firms prototype market expansion with project-based talent and use recruiting as a means to increase brand awareness and brand equity. Let’s explore.
The 3 Ps of consulting market expansion: Prototyping, Positioning, and Partnerships
Prototyping. Apply design think fundamentals to your market expansion strategy.
As tempting as a “go big or go home” approach can be when business development traction starts to pick up, it can be fraught with risk. A walk-before-you-run approach can not only help mitigate near-term financial risk, but it can also establish firmer footing for longer-term market positioning. Some firms are intent on running out of the gate. We love running! But if you’re going to start off running, at least be nimble in your approach.
Consulting firms that take an agile approach to growth initially overweight their teams with independent contractors or “1099s.” Independent consultants help a firm align revenues and costs. While 1099s can cut into project margins with higher variable costs, your firm-wide P&L will likely be in better shape over the long-run with fewer full-time consultants on the beach. This approach also allows you to bring in resources with precisely the industry or functional skillset required for an engagement (see our post, Accelerating Your Shift Towards Adjacent Practice Areas).
As demand becomes more predictable, it makes sense to shift the balance of consultants you deploy away from 1099s and towards full-time W2 employees. With experience, you not only will have more confidence in your ability to keep those W2 resources fully-utilized, but you’ll also have more confidence in precisely what types of resources (seniority, skillset) will be foundational to the success of the firm.
Positioning. Best-in-class firms use talent acquisition as an opportunity for brand building
When you are hiring full-time consultants, you have a brand-building opportunity on which 9 out of 10 firms fail to capitalize.
Boutique consulting firms struggle with brand awareness relative to the bigger players. This can make a pull strategy challenging when working to attract both clients and talent. As such, it will likely require active messaging to the consulting talent market to attract A-team resources that are inspired by your firm’s work.
Most third-party recruiters will conduct 1:1 outreach to candidates that meet the checklist criteria, but are incented to withhold your firm name altogether until later in the process (more in the Partnership section).
We suggest a 180-degree re-framing of your talent acquisition strategy. Yes, the checklist of requirements remains critical to talent acquisition execution. But the time and financial investment you make in talent acquisition could and should positively impact your business development activities concurrently.
You are growing. You are hiring. You are getting palpable client traction. This is the message that should be getting out to the consulting community with your brand front and center. Your recruiting partners should not be masking your name in candidate outreach, but rather pulling out the proverbial bullhorn to drive brand awareness of your consulting firm.
Talent Acquisition partners must act less like recruiters and more like best-in-class marketing agencies
A talent acquisition approach should not be constrained to masked 1:1 outreach to people with the right keywords on LinkedIn. A smarter strategy employs all the best practices of inbound marketing and inside sales to candidate acquisition, for example:
A talent acquisition approach should lead with the thought leadership that inspires your consulting firm’s work. This ensures that you aren’t just engaging with those that check the right Page 3 of 3 boxes, but with those who share your values. These consultants are much more likely to have longer-term stickiness with the firm because they believe in your mission.
A modern candidate engagement approach should employ best practices of marketers that target buyers of any other product or service. Messaging should be driven by buyer personas – current pain points, perceived aspirations, etc. You must earn the right to propose solutions (a role at your firm) to your buyer (a candidate) by proving first that you understand their needs and motivations.
Messaging should be 1:many rather than exclusively 1:1. By working with a partner that is tightly connected to the consulting community writ large, your messages will reverberate across the industry. At Talent Response, we have successfully rolled out multiple tools – both proprietary and those common to a modern marketer’s toolkit – to drive candidate engagement while building brand awareness.
Together these approaches should not only allow for a more engaged set of qualified candidates, but also build buzz in the consulting community around the content of the firm’s work and proof the firm’s ideas are getting serious traction with clients (“we’re hiring!”). We’ve seen this approach lead not just to a bigger funnel of qualified candidates but also generate leads for relevant projects. In many cases, lead sources are other consultants that know of client challenges their own firm isn’t positioned to address on its own. When your message is getting out there, opportunistic connections are more likely.
Partnerships. A partnership strategy can help establish your presence and reduce risk.
As with any market expansion you might advise your clients on, a partnership or joint venture is one arrow in the quiver to reduce risk and accelerate growth. As we mentioned in the Positioning section, boutique consulting firms tend to struggle with brand awareness. That struggle is even more apparent when expanding the firm into new practice areas or new geographies.
You are already taking on a high-risk market expansion. Project delivery risk – either of having enough resources or, more likely, having the right resources to deliver in a brand-consistent way – can compound the overall market risk. It makes sense to engage partners that can help you mitigate that risk.
Our clients turn to us to help them understand the consulting market beyond their areas of expertise. How do independent consulting rates and salaries tend to differ by geography? By seniority level? By area of expertise? How realistic is it to staff an entire consulting team after I’ve sold a major project? After how many hires will a 1:1 candidate outreach strategy typically fall short? How do I balance the need for full- time hires dedicated to the firm mission with the desire to keep full-time utilization rates high?
At Talent Response, we are collaborative teammates that iterate and prototype alongside consulting firm partners to identify the right approach to grow your firm – from a business development and a human capital perspective. We welcome the opportunity to discuss a different approach to consulting talent acquisition with firms looking to grow their consulting team.