Is your consulting firm on track in 2024?

Consultancy BenchPress 2023: Six opportunities to raise your game 

Last year we released the results of the Consultancy BenchPress survey 2023, the leading benchmark survey for sub-£30m consultancies in the UK and Ireland. 

Our research revealed that, despite good growth in 2022 and optimism for 2023, profits of founder-led consultancies in UK&I are in significant decline, with the smaller consultancies being particularly unprepared for the economic downturn. 

Time to check in, how have you raised your game so far in 2024? 

The Consultancy BenchPress benchmarking survey, a collaboration between The Consultancy Growth Network and The Wow Company, has been embraced by our members to evaluate and elevate their performance: improving their profits by adjusting their pricing, transforming their approach to sales, getting the right measures in place to drive high performance and creating efficiency by investing in the right technology. 

“The most powerful part of our membership so far has been the impact of the Consultancy BenchPress metrics on our business.” 

Candice Finn, The Litmus Partnership

If you find yourself trapped in a stagnant period of growth, seize these six opportunities to elevate your performance. Each section comes with a handy checklist to help you cultivate a resilient, dynamic consulting firm that is better prepared to embrace upcoming challenges in the coming year and beyond. 

#1. Be smart with your pricing 

Nearly a third of consultancies in UK&I did not increase their prices in 2022 – and those that did increase prices didn’t increase them nearly enough. 

With 72% of consultancies saying that they feel clients get significantly more value than they charge, increasing your pricing is a no-brainer. 

At the very least, get smarter with your pricing by giving three pricing options to new clients. Our findings tell us that if you do this, you’ll be 50% more likely to achieve higher year one client value (above £100k) and twice as likely to achieve higher conversion rates (above 60%). 

For your existing clients, build into your contracts an allowance for price increases in line with inflation (and don’t be afraid to action it). Even if it isn’t built into your contracts, we are all human. Speak to your clients. Explain that the work isn’t profitable and ask how they would feel about closing that gap. 

Finally, if like a staggering 36% of Consultancy BenchPress 2023 respondents you discount your fees without reducing the scope of work, make sure you only do this if you have a clear discounting strategy in place. 

Your checklist – have you:  

• increased prices for new clients? 
• increased prices for existing clients?  
• given three pricing options when presenting proposals?  
• reviewed your discounting strategy?  

#2. Get closer to your clients 

Consultancy BenchPress 2023 revealed significant opportunities to get closer to your clients across three key areas: 

Sales culture 

Only 1 in 5 consultancies (19%) are developing a sales culture across their organisation that they continually invest in improving. If you’re not building a relationship with your clients, understanding their pain points and solving their challenges for them, then someone else will.  

Click the button below to find out the five actions that will deliver the ultimate sales strategy for your consultancy.

Account planning 

Only 30% of consultancies have a formal, regular account planning and review process. If you are one of the 70% that still don’t have one in place, you are missing a trick. Our advice? Start doing it now. Members – refer to the guidance and templates on the Growth Hub. 

Monitor progress 

72% of consultancies feel that their clients get significantly more value than they charge. What’s more, 64% rarely or never measure the return on investment they deliver to clients, despite consultancies being asked to justify the spend on them more than ever. 

One way to continually showcase the value that you are adding to your clients is to measure client satisfaction through NPS, a leading indicator of future growth and profitability. 

#3. Spend more time on new business 

The biggest internal challenge faced by consultancies right now is winning new clients. 

The answer to this challenge is simple: spend more time on new business. Hire more people skilled in this area. Free up time for yourself and your team to find more work. And build a sales culture. 

Not sure where to start? The highest-performing consultancies rate client referral programmes, maximising third-party relationships and establishing networking strategies as the three most effective ways to win new business. These are your golden opportunities.   

Members can access tools, case studies and guidance on how to do all three of these. Here’s one example:   

Your checklist – have you:  

• hired more people to do new business?  
• created time for you and your team to concentrate on winning new business?  
• built a sales culture?  
• implemented a client referral programme?
• put in place a strategy to maximise third party relationships?
• established a networking strategy?

#4. Reduce your reliance on a single, existing client 

Are you in the ‘15% club’? An exclusive group where a single client represents less than 15% of your revenue.  

With only 22% of small consultancies in this important club, that means the remaining 78% are open to the risk of losing that client overnight and with it a reduction in the perceived value of their business. 

Spend more time on new business and take steps now to mitigate that risk. 

Your checklist – have you: 

• understood what percentage of revenue your largest client represents?
• spent more time on new business (point #3)?  
• taken steps to mitigate the risk?  

#5. Measure more 

There is a direct correlation between the number of metrics measured, growth rates and profitability. To put it simply, the more you measure, the better you perform. 

This shouldn’t be a surprise, but what is a surprise is that it doesn’t happen more often. 

Data from Consultancy BenchPress 2023 told us that those with a KPI framework made more operating profit: 28% operating profit, versus 18% for those who didn’t. 

So put in place a KPI framework that looks at all 3 types of metrics (retrospective, real-time and predictive) and you can improve your profitability. 

Your checklist – have you: 

• implemented a KPI framework?  
• put in place measures for all 3 types of metrics – retrospective, real-time and predictive?  

#6. Invest in technology 

With average overheads at just 18%, much lower than typically expected for a well-oiled consulting business (around 30% is a more likely figure), there is no doubt that the long shadow of COVID has created the space for firms to legitimately reduce overheads, particularly with respect to office space, travel and hiring lower-cost remote workers.   

The risk is that without smart investment in infrastructure, including technology, consultancies will struggle to scale profitably.  

How do you currently oversee project and resource management? Using a PSA (Professional Services Automation system) as opposed to standalone solutions such as timesheets and resource management tools has been proven to have a positive impact on revenue growth rate.   

Consultancies that use a PSA also report higher than average utilisation rates for non-Partner roles. When you look at this in the context of a 1% improvement in utilisation delivering a 20% improvement in operating profit, reviewing the technology you use is one of the most important activities you can undertake.

Your checklist – have you: 

• reviewed how you currently oversee project and resource management?  
• calculated the impact an improvement in project and resource management could have on your utilisation rates and operating profit?  

What are you doing to raise your game in 2024? 

Join our network of ambitious consultancy leaders. Contact our Partnerships Director Luke Badiali today. 

The Consultancy BenchPress Report 

The Consultancy BenchPress Report is compiled from the results of the survey of nearly 250 consultancy owners and presents comparable Key Performance Indicator data alongside insights, tips and tools to support the growth of ambitious founder-led consultancies. 

For three years, consultancy leadership teams have been integrating benchmarks from the Consultancy BenchPress Reports into their board meetings and targets. 

“Now, more than at any time since 2020 when Consultancy BenchPress began, dedicating the time to look underneath the bonnet could mean the difference between consultancy owner blind optimism and justified confidence,” explains Marc Jantzen, Founder and CEO of The Consultancy Growth Network. 

An abridged version of the Consultancy BenchPress report is available to everyone via the link below. The full version is accessible to members of The Network and participants of the survey. 

In case you missed it 

“I wish I had benchmark events like BenchPress when I was growing my business” 

Chris Parry, Growth Expert