One accurate piece of advice I heard this week:
"Don't be romantic about your audience. Serve the people who can pay you what you're worth."
This came up in a conversation I had with a marketing positioning specialist. It's the kind of thing that sounds like a platitude or generic cliché. But I believe it's relevant for all of us in consulting - having a great market is an advantage.
I first wrote about table selection a year ago, sharing a McKinsey report which stated that "the role of industry in a company’s position is so substantial that you’d rather be an average company in a great industry than a great company in an average industry."
But how do you assess the strength of a market?
There are hundreds of frameworks and methodologies available, each one with its pros and cons. I recently came across an interesting one by Alex Hormozi, which includes four indicators:
- Pain: The more frustrated they are with the problems you solve, the better. I believe we consultants are better off replacing "pain" with "risk", though. The bigger the risk you reduce (or manage) to your clients, the more they will pay for your work. The consultant who makes someone's life easier will make less than the one who saves someone's life.
- Purchasing power: It's not enough to find people who desperately need your expertise. They need to be able to afford it. Make sure your dream clients have the capacity of hiring your services at the prices you require to make it worth your time.
- Targeting difficulty: How easy it is to find your potential clients? To market your services, it helps to find out if and where they gather together. They might all be members of the same trade association, read or consume information from the same sources, go to the same conferences or events.
- Economic growth: You can have a mediocre offering and close to no sales and communication skills - if you're serving a market that's experiencing exponential growth, you will be fine. In fact, you can build a multi-million dollar consulting practice in most markets as long as they are experiencing some growth. What you don't want by any means is to be selling ice to eskimos.
Chances are the market you are currently targeting is a regular one. Not as depressing as newspaper publishers or stationery product manufacturing, not as booming as cybersecurity or data strategy. Either way, it might be important to take some time to review it.
You can have extensive experience and be the biggest authority in your space. Your firm might have been highly profitable in the past. If you're stuck in a bad market, nothing will work.