In this session, Danilo discussed:

  • The transition from traditional to ROI-focused marketing planning in mid-size and large consultancies, and how smaller consultancies often lag in this regard;
  • The importance of knowing your key numbers and metrics for effective planning and decision-making;
  • The seven critical levers that must be included in every consultancy's marketing planning;
  • How solo and micro consultancies practically improve each of these levers;
  • A healthy way for boutique consultancies to look at their client acquisition cost.

Links and resources mentioned include:

Video Recording


I'd like to welcome everyone. For those of you who are joining or watching this for the first time, BCC Bites are those quick chats that we run every other week. They're open for everyone. We talk about a topic suggested by our members or email subscribers and have a quick Q&A about it. And today we're going to talk about the seven levers of marketing planning. So how you can use assumptions to plan better, what are the key numbers you need to look at and how you can impact them really. So if you have any questions, please put them in the chat. We'll go through them at the end. Let's start.

First, let's talk about why matters, right?

When we look at mid-size and large firms, for a long time, many marketing decisions were made based on the "we do this every year" argument, right? There's an industry event we attend every year. So we need to put aside time and money for that. Or, we've been sponsoring a trade association magazine for years. So we need to subtract that from our available budget, for example. So you had all of these activities that were always done and you would build your marketing plan around them.

Now over the last decade or so we have seen a change, a shift of course in how this larger consultancies look at marketing planning. And in special, marketing budget. Instead of asking, "what do we do every year?" partners started asking, "if we spend X on this marketing initiative, what can I expect in return?" So they started to look at ROI. And this was part of the big process of professionalization of marketing, of the marketing department.

Now, this is the story for mid-size or large firms. Almost all of you who are here, you are running either solo or micro consultancies, right? And maybe you're on your own, maybe you have one or two assistants to help. Apart from some new faces here, the partners with the largest consultancies I see here, they have a team of 8 to 10 people maybe. So, what happens when we look at those of us who run smaller consultancies?

And the truth is the vast majority of us never made that leap. Partners don't know what an effective marketing plan is. They don't know their numbers. And this means most of your time and money, the time and money you invest in marketing is wasted. Now, what happens is that several consultancy founders and partners still see a marketing plan as an optional thing. They imagine it as a "nice to have", like a formal document that have little practical value.

So before talking about the seven levers of marketing planning, I listed some of the practical, concrete problems that a good marketing plan solve. They include all of these:

  • Not doing any marketing because you don't know where to start.
  • Spending on marketing activities that don't generate a positive return on investment.
  • Having unrealistic expectations for which marketing initiatives can produce results. And by this, I mean, being overly optimistic with your tactics, right?
  • Expecting too much, not sustaining market implementation over time. Giving up of initiatives and activities too soon.
  • Relying on one single tactic or activity to market your practice.
  • Poor implementation. So, creating poor marketing messaging, designing low performing campaigns, etc.

These are some of the problems that a good marketing plan solves. It solves all of this, actually. Now, I want to take two minutes to talk about the real source of those planning problems.

I was thinking about that a while ago. All of you, just like me, are free to choose what you work on, right? You can do whatever you want, whenever you want, however you want it to promote your business. It's your consulting practice. You don't have a boss looking over your shoulder, right? What I know for a fact, however, and I can bet with any of you on that, is that it's highly unlikely that any of you here will leave this chat and spend the rest of the day drinking beers and watching YouTube videos. I think it's highly, highly unlikely. I would bet against that.

Why? Because it's, first because it's a Thursday. I mean, if it was a weekend, that could happen indeed. But really what happens is we understand this universal law, the law of cause and effect. Everything, every single action in the universe produces a reaction, no matter what. So if you decide to get drunk on a Thursday at lunchtime, you might miss important calls or meetings. Some urgent or important activities in your business, they will not get done by themselves. And you know all of this will cause you problems in the future, right?

So if you made poor choices in the past, your consulting practice is probably facing a number of side effects, negative side effects now. Like an empty pipeline, bad clients, low cash balance. And the opposite is also true. If you want your business to reach certain goals, you will probably need to execute certain actions that will likely produce those desired outcomes. This is obvious. This is obvious, the law of cause and effect.

Now, my question for you is, why do we become so overwhelmed with our business then? Why do we multitask or we jump from activity to activity? Give up initiatives too soon. Why do we insist on working longer hours or adding things to our to-do list when it's obvious that doing more of the wrong things won't help? Why?

This is due to a lack of clarity, really, which is the point of planning. When we're lost in our thoughts, it's impossible to see how our past actions created the situation we're in, right? Also what we need to avoid doing now to reach our future goals. I bet that at least some of you can't even define what your goals are, right? Or what's the consulting business that you want to build. So, it's a problem of clarity, really.

And the fastest solution to that is simple. What's the one thing that is universally clear and everyone in the world can understand? Numbers, right? Everybody knows how to count. The numbers don't lie.

So, my question to you, and I think we should always ask ourselves here, is do you know your numbers?

Do I know my numbers, my important numbers? Do you know what's your revenue? What are your fixed costs? Do you know your marketing and sales numbers? How many leads, appointments, opportunities, proposals you sent this month, this year. Do you know how many key relationships haven't heard from you in a while? Do you know how many relationships can you realistically nurture every month? How many people can you actually stay in touch personally?

These are all numbers. So your goals, they need to be quantified. Your KPIs, they need to be quantified. Now I'm not arguing for a 100% data-driven approach. And I know that this sounds cold and robotic. "I need to quantify everything." But the effect, the actual effect, when you start to put things into numbers is the opposite.
The more clarity you have around those things, around those activities, what you want to reach and what you're doing now, the better you will perform.

You will start doing more of what matters. You stop working on things that don't move the needle because you're measuring them. You will spot problems along the way so you can correct course quicker. So what I'm saying here, before we get into the actual planning topic, is: Intuition has its place and time. But if you really want to reduce overwhelm, if you really want to increase marketing effectiveness, you need to study the numbers that are required to grow your business. This is the number one objective of your marketing plan. Right?

Now, look at this example here. This is an extremely simplified example. Extremely simplified example. These are the assumptions. Your targeting and positioning decisions, they provided you with a list of a thousand potential prospective organizations with whom you would like to work with. During, let's say, a year, a period of a year, you implement a number of marketing campaigns, lead gen, demand gen campaigns. And they provide you with 60 leads, 6% of a 1,000. Of those leads, 30% of them, so 18, turn into real opportunities. Where you are having multiple conversations with people who are interested and able to hire your services, okay? And of those, you close a third of them. So that gives you 6 clients.

Again, this is the simplest illustration I could find. Let's not get into this discussion of how this needs to be adapted to how consulting clients buy, because it's not a linear process. Let's not get into discussion of how you can define what a lead is or how many stages a pipeline has. What I want to show you here is that when you combine those numbers, any numbers, with these ones, So your average revenue per client, your retention rate, revenue growth per retained client by year. You can calculate how much a lead, a conversation, an opportunity, a proposal are worth for your consultancy. And how much they actually costed in your campaign. And this is what allows you to allocate the time and money you invest in marketing wisely. With those numbers, for example, the campaign you ran added $324,000 over a three-year period.

Now, it doesn't matter... these numbers are examples, It doesn't matter what's your average revenue per client, what's your marketing budget. It doesn't matter if it's $1,000, $5,000, or $10,000 a month, your marketing budget. Or if you're doing everything yourself or with the help of an assistant. It doesn't matter. Investing time, energy, and money without having a clear idea of how many leads or opportunities I want to add to my pipeline, using this example. It makes no sense. If you don't know your numbers, how are you going to improve? The goal is to improve the way you market your consultancy. So you need numbers. You need some kind of numbers.

And what this allows you also is to play with the assumptions. So what will happen if, for example, the target to lead ratio here moved from 6 to 10%. Or if we increase client retention from 50 to 70%, or the average revenue per client? I mean, a change in any of these will directly affect your top line, the revenue added to your consultancy, right? And this is, again, a simplification.

Let's say, for example, and I know it's the case of many of you, you get a lot of referrals from existing clients. Client referrals is an important source of new leads for you. If that's the case, every new client you win will also have a positive impact on your lead gen numbers, right?

So you start to map what impacts what. And this leads us to the core of our chat here. What are those levers? What are the key KPIs that matter the most for your marketing planning?

Boiling it down, It comes down to seven numbers here:

  • The number and/or quality of targets.
  • Number of active leads.
  • Number of opportunities.
  • Your conversion rate of opportunities to clients.
  • Revenue per client.
  • Revenue retention.
  • And your total marketing investment.

Now, whatever you choose to do in marketing and business development should be, let's say, plotted against those levers. Any activity, any tactic, any campaign you implement that doesn't improve at least one of those six here, or prevent them from falling, should not be done in the first place. This last one, the seventh lever, total marketing investment... It's not only a lever but it's a constraint, right? And I'll talk about that in the end.

But these are the most important numbers that you should look at when you're planning your marketing activities. Now, we don't have enough time. It's a quick chat. We don't have enough time to get into details of each one of those levers. What I'll do is I'll quickly list a few activities or paths that you could pursue to move each one of those levers in the right direction, right? Let's start with the first one.

The number and quality of targets. And here, how do you improve that?

Well, you can start by narrowing and documenting your targeting strategy. So you need a specific and clear definition of what an ideal client for your consultancy is. Otherwise everyone's your target, right?

Clarify your go-to-market strategy. Now, are you focusing on promoting existing offerings or existing services to new clients? Are you trying to launch new offerings to your existing clients? Or are you packaging existing services that you have and targeting smaller or larger companies than you do now? What exactly are you trying to achieve here? This is what I mean by clarifying a go-to-market strategy.

Identify and vet target companies. Who are those companies? Let's list them. Let's prioritize them.

Identify and vet decision makers, influences and referral sources one by one. Who are those people?

This is what we call list-building. And this is boring as hell. But it's incredibly, incredibly important. Consultancies don't do that. Well, if there's a selected number of companies, people and companies that would benefit the most, that would be better fit for your services, that you have a higher likelihood of winning...
why would you pursue other companies? Why would you pursue anyone you come across? There's no logic to justify that. So these activities, they are boring, but they are hugely, hugely important for any marketing strategy.

The second lever, increasing the number of leads. And here, I'm being very pragmatic about it. So to increase the number of leads, what do you need?

Well, one way to do it is increase the frequency of interactions you have with those target accounts. So the more you communicate with them, the more you share with them, the more opportunities you have to engage, to chat, to share insights, to share content, to invite them to events. And here, touches. Some of you might understand marketing touches as, just in a cold outreach context. Like I'm sending messages. The higher the number of messages I send, the higher the likelihood they will respond. Yes, this is one way to look at it. But the number of interactions, the number of touches here, it could be the number of times people interact with your content, the number of times people hear about you from others. Right? So just the consistency of it, just being in front of those targets more and more and more will naturally lead to a increased number of leads, right? So this is the quantity side of it.

There's also the quality side of it. You can also increase the effectiveness of your touches to targets. And this will probably be a combination of those activities there. Improve brand messaging, better propositions. Lead gen tactic. Increase referrals. Create and sustain strategic alliances, partnerships. Increase the use of marketing-based offers. And here, these are things such as online webinars like this one, scorecards, gated content as a whole. So not only getting in front of those people more and more and more, but also doing it better.

Another way to increase the number of leads is to involve your team, if you have one. You can encourage participation through culture. So, a culture that invites people to contribute to business development. Compensation, by linking compensation to specific lead gen targets. And also increased accountability. Just making sure that everyone knows what each one has to do. We have the data, it's transparent, it's visible. Everyone can see how much people in the team are contributing to our business development efforts. These are some, and I would say the main ways you can increase the number of leads.

Now opportunities, increasing the number of opportunities.

And the first step here... and again, I'm not getting into this endless discussion. Maybe if you want to hear about it, drop me a line, it's a topic for another chat. The first step here is to create a universal definition of what an opportunity or qualified lead is. What exactly is an opportunity? And here, you can keep it simple and you can borrow from any existing methodology. There are many methodologies like BANT or MEDDICC, where you look at budget, you look at authority, you look at timing. There's a very specific definition that I recommend to most boutique consultancies of what I call a qualified opportunity. But whatever you decide to go with, it needs to be clear. You can't change the definitions just to bump your numbers. The idea is to identify if you're attracting or generating the right leads in the first place, right?

Which is linked to the second point here. So narrow your targeting to generate more qualified versus unqualified leads.

Strengthen your value propositions.

Improve demand gen skills to create interest and urgency among leads. This is crucial for most consultancies out there, for most of you who are watching because you're providing an "optimizing" service. There's not a lot of urgency linked to hiring your services, right? People may come across you. They first need to understand what you do and how it impacts their business, and whether they really need it. Sometimes the timing is not right. So, you need to have a toolkit. You need to create those capabilities to generate interest, generate curiosity and also urgency among your leads. This is how you increase the number of opportunities. So you're making the best out of the leads you have.

You can also increase client preference through lead nurturing and relationship building initiatives. Sales cycles are long. Accept it, don't fight against it. How are you nurturing those leads? They might not be able to hire services now. It might not be a good timing for them to engage with you now. But if you stay top of mind, they will come back. You will have client preference.

The fourth one, the fourth marketing lever, that would be the percentage of qualified leads converted to clients. So it's a conversion rate. And here, this number, it actually summarizes everything that happens in the BD, in the business development part of the sales cycle, so to say.

So you can strengthen your value propositions. The bigger is the promise of value to be delivered, the more people will be interested in engaging with you.

You can review and improve your offering mix, service packaging. Sometimes you have services that deliver results. You have services that are commercially interesting, but they need a new packaging. They need to be structured in a different way. They can be combined with value added activities. So just taking a look at them, reviewing how your offerings are structured will naturally lead to a better conversion rate.

Improve sales processes and skills. And here we include, for example, consultative conversations, your ability to perform effective discovery, your ability to put together and present solutions, your ability to gain sales commitments. We're talking about sales skills.

And you can also increase client preference through brand management and relationship building initiatives. The quality of the relationship or the depth of the relationship with the buyer is not the number one criteria, selection criteria among consulting clients, but it can tip the scale. So of course, taking a look at this will always provide you with some insight on how to improve your conversion rate, how to improve your sales process.

Next one, revenue per client.

And here the easiest and fastest way... Not the easiest but the fastest way to increase revenue per client, of course, is to improve your pricing model or strategy. Why? Because it's done immediately. There's little to implement. You can just pump your prices and from one day to the other, you have a higher revenue per client. Now, of course, you need to justify your fees, right?

And that's why you need to combine those efforts with a narrower positioning. So moving upstream, doing less implementation, more strategic guidance.

Review and improve your offering mix.

Increase focus on upselling, cross-selling existing clients. Of course, to increase revenue per client, we're not only talking about increasing the specific price of your individual services, but also the client lifetime value. If you create and incentivize multiple purchases, you create a ladder, you have multiple offerings that existing clients can purchase, somebody can hire from time to time, or you have retainers... Whatever it is, you're extending that lifetime value and you're increasing revenue per client.

Strengthen your value propositions, helping clients measure value added and impact of engagement. I wrote about enhancing client value perceived in the last newsletter edition. So if you want to read more about it feel free to check it out on the website. We wrote about this, the quality value gap in consulting. Right? And why it's important for you to educate your existing clients on how much value you're actually adding.

Stop or reduce discounting. And here, consultancy partners, they highly underestimate how much discounting fees hurt. So let's say, and it's easy to illustrate that. Let's say you have a small practice with 40% margins. If you always give a 15% discount to close projects and you stop doing that, your profit will grow more than 50%. So a 15% discount reduces your total profit in 50%. For those of you who are interested in this, we will have a BCC Bites on this topic in October. We called it "Alternatives to discounting" and it's happening on the 26th of October. I'll share the link to register with the recording of today's chat. We'll talk a bit about the options that you have. What are the alternatives you have to avoid giving financial discounts to win client preference, to win projects.

Finally, increase revenue retention.

You can improve the way you communicate the results delivered, and you can improve the client experience. I always refer to this as the 50-50 rule. You should dedicate 50% of your attention to the results that you're delivering, and 50% to how you're delivering them. So the client experience, especially if you're offering some kind of commoditized services or standardized services. Client experience is the differentiator and it's going to tip the balance on the decision of whether they will continue to engage with you or not.

And here, client experience... this includes but it's not restricted to client service. So we're talking about all interactions and experiences that a client has with you and your consultancy. From the initial contact to the post-project conversations. So it includes all of the impressions that the client has before, during and after you deliver your services. Not only delivery. I wrote about this a few weeks ago also on our "Adding Value" newsletter. I'll share the link with you as well.
But let's come back.

Consistently performing strategic client planning for key accounts. A month ago, we ran a group workshop on effective client planning. If you want to learn more, just drop me a line and I can add you to the waiting list for the next one. Relationship building initiatives are included here. I could add them separately, but they're a big part of account planning. So account planning is really... We're creating a plan of action for each account, for each client, for your most important ones or promising ones, on how to sell more and larger engagements. This is the goal of the account planning exercise. I highly recommend you do that at once a year for your most important clients.

Finally, develop and leverage specialized IP. This could be an exclusive research on your target market, methodology or a process that can be licensed. They act as moat, as a defense against other consultancies, especially in competitive markets.

Now, let me talk a bit about the final lever here, and then maybe we have time for one question. The total marketing investment. And here I have two important observations on marketing investment. Because for all of the other levers you want to increase them, you want to improve them.

The first one is: you could think, you could imagine that the bigger your marketing budget, the better your results are. Research shows that's simply not the case for professional service firms. Spending more does not guarantee a better ROI, return on investment. So this is the first observation.

The second point is: some of you might be expecting me to talk about how to do the same with less. But I do not like this framing, really. The reason is the vast majority of you, of micro consultancies, underinvest in marketing, not overinvest. Almost all of you are underinvesting in marketing. So it's counterproductive for me to talk about ways to reduce your already low marketing budget.

So here, when we talk about this last lever, the total investment, total marketing investment, let's talk not just about increasing or decreasing it. But optimizing it to get better results out of the resources that you have available. That's a frame that I think it's helpful to use. And these are some of the ways you can do that.

So document and leverage client purchase paths in your marketing planning. Client purchase paths or the client journey. You do that to identify what exactly to invest in, or how to make the best of what you have in terms of your resources. What are the parts of the journey that need to be improved more urgently.

Review your marketing mix, shifting more resources to digital marketing. And here we're talking about content marketing, SEO, email marketing, online ads, social media... All of these, they are scalable. And with a small budget, very small budget, you can run campaigns - if you do them right - that really rival those campaigns of many mid-size or even large consulting firms. This week I saw a team of three, a small consultancy. They were running campaigns that actually rival marketing campaigns from firms... maybe 50 times bigger. So when in doubt, go digital first. This event, I'm recording it. I'll be sharing it with you. I might share that with other people, with other prospects in the future.

Outsource, delegate and or automate marketing implementation. A lot of marketers calculate ROI using only financial expenses. But what about your time? All of you who run micro consultancies... We need to protect our time. If you're doing all of this yourself, I guarantee you're not making much per hour. So a tip, something that's very helpful is to just establish an aspirational hourly rate for you. Even if you don't charge clients by the hour, which you should avoid anyway, doing this will help you to kind of identify what are the activities that you can or you can't do or know this, I should offload to someone else. You need to protect your time. Doing marketing by yourself... There are many, many processes, many activities involved. It's unfeasible.

I think we'll only have time for one question because we're over time already. But I think it's a nice transition to our Q&A because I see Chris here has a question that fits well. So he asks:

"How should we look at cost acquisition in our marketing plans?"

I love this question. I was actually hoping someone would ask something similar. I wrote a short blog post about it maybe two years ago. And it was one of the best performing posts in terms of Google clicks SEO for a long time. Consultants really want to benchmark and know exactly how much their cost of client acquisition should be. So here's what I think.

You can track your CAC, your client acquisition cost, but you should never obsess on them. And as a matter of fact, having a higher CAC, having a higher cost of client acquisition sometimes means you're doing things right. This is kind of contrarian, but if we listen to generic B2B marketing advice, especially coming from the SaaS or tech industry, reducing CAC would be included as one of the levers. I can stop the screen sharing here. It would be included as one of the levers that we listed here. The less we spend bringing in each client, the better margins, the more we profit, right?

The problem with this is we're in consulting. You're playing a different game with different assumptions. It's a trust-intensive business. You don't have an infinite supply of leads. For many of you, your target market, it might consist of a couple of hundred companies and that's it. Marketing to existing clients is in many ways much more crucial, much more important than acquire new ones. So it's a different game.

And if I remember well, I gave this example in the blog post. Let's say you're doing some marketing experiments and you discover there are two ways you can find clients. There are two avenues you can use to find clients.

The first one is running LinkedIn ads, offering free audits, let's say. So you're promoting the free audit in your ads and the audits are a trigger to start conversations. And some of these conversations turn into opportunities. You do that. And you find out that this tactic, it has a CAC, it has a cost of acquisition, cost of client acquisition of $1,000.

Another tactic, the second tactic you test, is creating private events, or kind of small roundtables or in-person meetups for selective executives. Really small and exclusive. And this tactic also can bring clients, but it has a cost of client acquisition of $5,000.

So, what do you pick? Many consultants would pick the first option, LinkedIn ads. You don't think twice, it's five times cheaper. And you're right to do so.

But here's my idea. Start with the cheaper clients, start with the LinkedIn ads. You know they work, you know you have measured them. But over time, build up your economics, do the long-term initiatives, corrections that you need, such as improving brand messaging, positioning, etc. Build up your economics so you can afford the $5,000 prospects. That's my logic. So you start with the cheaper clients, and you build up your economics so you can afford to acquire the $5,000 prospects.

Why? The reason why it's simple, because it makes it difficult for people to afford to be in all the places you are. Anyone can run ads. And once other consultants realize, okay, that's a good marketing avenue, they will start to run ads. So you have a lot of people who are showing up where you are. It's difficult, it starts getting difficult to get people's attention. The prices go up as well. But most importantly, those people who are running those tactics, they are happy to undercut you on price. They are happy to undercut you on price because I'm spending a $1,000 to acquire a client. How much do I need to charge to break even? That's how much I'm charging to get my practice off the ground.

There's a reason why running private events costs five times more. Apart from the level of trust you build with a more personal, exclusive initiative. It's very difficult to attract these executives, the people who run, who go to this small round tables. It's very difficult to attract those with ads and online scorecards.

So increasing CAC, increasing your cost of acquisition is actually the price you pay to end up with the best clients, that's my point. Increasing CAC is the price you pay to acquire the clients who will stay longer and spend more with you.

That's why the last lever here is a total marketing investment. It's not CAC, it's not cost of acquisition. Of course your marketing initiatives, they shouldn't lose money. They need to contribute to revenue, to top line. But if you're obsessed on hitting numbers, that doesn't mean... you're hitting numbers that mean nothing. It also doesn't help. Context matters. So it's better to look at your own situation. What are you doing now, Chris, to market your consultancy? What are your numbers? How much those activities, those leads, those new clients are costing you now? And let's focus on improving that over time. I think that's the best way to look at it.

As I said, sometimes having a higher CAC, cost of acquisition, means you're doing things right. You're going after the right people. You're going after the right organizations. You just need to build up your capabilities, your offerings, your economics to be able to afford those people, right?

But that's it, that's it folks. I went over time. I want to thank you all for joining. The next BCC Bites will be in two weeks time. So on the 31st of August. And we're going to talk about self-management for solo consultants. Super important topic, super interesting topic for all of you who are solo consultants or solo advisors. I'll present some ideas for you to kind of better structure your work habits. And if you know someone, if you know solo consultants or advisors who might be interested, feel free to share the link. But that was it, stay safe. Wish you all a great end of the week.

Thanks for watching or reading. You can get more specialized and actionable growth insights for micro consultancies in our newsletter. Every Tuesday, you get one idea from Danilo, one quote from other experts, one number you need to hear, and one question for you to level up your consulting practice.

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