Like most sectors, consulting firms have faced various levels of disruption as a result of the pandemic. This post outlines 5 ways to get back on track in 2021.
Over the course of this year the mainstream news media has given us a clear understanding of the impact of the pandemic on consumer businesses. But understanding the impact on the consulting sector is a bit more nuanced. And, like many things in the world of consulting the answer to how the pandemic has impacted the sector is, “it depends.” Research and anecdotal evidence varies.
How the Pandemic Has Affected Firm Revenues
The fact of the matter is that for the majority of firms, 52% of them in fact, 2020 will be a year of revenue decline. While a good portion (~30%) will stay revenue neutral, we estimate only 4% of firms will experience substantial growth this year (growth in excess of 30% or more). In short, if your firm has unlocked meaningful revenue growth this year, you’re not quite a unicorn but your experience is definitely far from the norm.
How Firms Have Responded to the Challenge
While that’s all interesting, it doesn’t really help you very much. The real question is how did firms respond when faced with adversity? What did firms actually do to counteract the challenges 2020 threw at them? And, eventually, what does it mean for the road ahead – will some of these adjustments be “keepers” to maintain for the long term, and which adjustments should simply be “lessons learned”?
In our research, we looked at this on two levels. First, we wanted to understand if firms made moderate or significant changes to their business strategy. We classified this as developing new service offerings, creating new channel relationships, entering new markets or opening new geographies. As it turns out, 75% of firms did one or more of these things. And, as you might expect, firms were more likely to invest in new delivery methods (more digital ways to service their existing clients) than they were to say, enter entirely new vertical markets.
Second, we wanted to understand how firms adjusted at a tactical marketing and business development level. We considered this to be things like investing in new digital selling tools (i.e. LinkedIn Sales Navigator), investing in paid digital media or SEO services, or launching a virtual event series. Similarly, 78% of firms modified their marketing and business development tactics in one of these ways.
As you might expect, firms were more likely to invest new marketing resources into things that had the most promise in directly connecting them with clients in a “virtual conversation.” But we also know from other research that the volume of thought leadership coming from consulting firms during the pandemic drastically increased. In fact, in July I spoke with the editorial leaders of 3 of the largest global IT services firms and they all told me the same thing, “We published more in the last 3 months than we did in the last 3 years.” So, we do know this — clients are flooded, now more than ever, with objective opinions on what they should be doing going forward.
So, What’s Working? And What Should You Do in 2021?
Obviously, every firm is different. Your response is directly commensurate with the nature of your firm – its ability to adapt, its hunger for change, its contractual obligations, its budget, its buy-in for marketing, and more. A business strategy firm that predominantly works with retailers obviously faces a much different go-forward model than an operations consulting firm working in the manufacturing sector or an IT services firm working with healthcare organizations.
Based on what we’ve seen in our research and in our client base, I go into a lot more detail on these Top 5 strategies for the year ahead in this webinar. They include:
- Isolate Growth Opportunities Going Forward– All of your marketing and business development energy needs to operate within a narrow intersection of needs and wants.
- Industry Alignment Opportunity– Economic crises tend to accelerate trends already in motion. We’ll talk about the one sector that continues to shine bright, and why you should align your firm with it somehow.
- Raise the Quality of Your Thought Leadership Content– Clients don’t need more voices. But they do need better ones. Use 2021 as an opportunity to bring quality forward, not repeat the same stories everyone else is telling.
- Enable Your Salespeople to Be Thought Leaders – Most consulting firms rely heavily on thought leadership to start conversations with potential clients. But few do a very good job of helping sales continue the story.
- Double-Down a Portion of MarketingInvestments – Conferences and in-person interactions will re-emerge sometime in 2021. But that doesn’t mean client executives are going to rush back to the table. We’ll discuss the best ways to connect with potential clients in 2021.