Value Proposition Drivers For Boutique Consultancies

What consulting clients often want, and how to differentiate your practice.

This post is part of a series on consulting business model innovation.

Last week I shared an overview of the Boutique Consulting Canvas (BCC) - a specialized framework for micro consultancies to analyze and rethink their business model. As promised, I'll write a quick post on each of its components.

Let's start with your value proposition.

The Boutique Consulting Canvas

Value Proposition

Your value proposition is a promise. It's how you express what value you bring to clients and how you differ from competitors. And of course, value can mean different things to different people.

Research and observation, however, point to five dimensions of value in the consulting space. When we ask clients why they hire consulting, what they really want is a better, easier, cheaper, faster, and/or safer solution. And since none of the boutique consultancies I interviewed wanted to pursue a strategy based on price differentiation, we crossed that dimension out.

Even if you have economies of scope going on, it's simply too challenging for micro consultancies to gain a sustainable edge while competing in price.

Four Differentiation Drivers For Boutique Consultancies

This left us with the following differentiation drivers:

  1. Specialization: Helping clients produce better project outcomes than their teams or other consultants can generate.
  2. Risk Mitigation: Helping clients minimize the risks associated with the project.
  3. Decreasing Time To Value: Helping clients accelerate change and achieve results faster.
  4. Simplification: Helping clients simplify the project delivery, generate desired outcomes, and make decisions.

If you want your clients to see value in hiring your services, you need to show proof of competence in at least one (but ideally more than one) of these dimensions. This is how you differentiate.

It's worth highlighting that there's no single way to create value within any of these five dimensions. If you want to be seen as a safe alternative for clients, for example, you could:

  • Take some of the project risks by adopting outcome-based pricing, or adding a guarantee to some of your services;
  • Produce clear project documentation or standard procedures for the client;
  • Ensure compliance with industry regulations or standards.

All of these initiatives will convince clients of your value add.

Picking Your Dimensions

If you want to build a reputation as a value-adding partner, you need to understand what value means to your clients. That's when the importance of research, and knowing how your prospects think and behave comes into play.

Your clients' industry plays a big role. Companies in the manufacturing industry, for example, may be more likely to care about safety, whereas clients in fast-moving sectors like tech and direct-to-consumer retail might want to see results as quickly as possible. But even within the same industry, companies with a different culture and personality of the leadership team will seek out some types of value over others.

These dimensions are also key for your positioning strategy. While some firms are seen as generally competent across all five dimensions, others shine by focusing on just one or two of them. Choosing which you want to be associated with - and ensuring that is clearly communicated in your marketing material and brand identity - is a great way to make competition irrelevant.

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