On Enhancing Client Value

The "value problem" is one of the topics that spur endless discussions in the consulting industry. The fact is that even clients who have a positive view towards consultants are often highly skeptical whether their investment in consulting projects is actually generating value for money.

This discussion leads us to explore the many ways in which consultants can increase their actual and perceived value.

But first, it’s helpful to list some common assumptions about measuring and improving client value in consulting, and why it’s important to challenge them before planning your initiatives. Here are five of them.

Assumption 1: All clients value the same thing.

Value is subjective. Failing to recognize that different clients may have different needs leads to generic solutions. And generic solutions are ineffective.

That’s why one of the best ways for micro consultancies to increase client value is by adopting a narrow positioning. This ensures you work on solving similar problems for similar organizations, and get smarter in the process by codifying this business knowledge as IP. In this case, you can (and should) standardize at least some of your service offerings.

But maybe you’re not that focused on your targeting. You might work with organizations of different sizes, industries, or verticals. If that’s your case, you will need to perform some sort of client segmentation to identify needs and expectations. This allows you to develop customized value propositions and service offerings for different client segments, ensuring alignment with their goals to increase client value.

Assumption 2: Measuring client value is a one-time activity.

The only certain thing, in whatever market you focus on, is change. The environment in which your clients operate is continually changing. New technologies being launched and adopted. New challenges emerging. New opportunities to grow.

This means the exercise of measuring what and how you can better support clients’ needs to be always on your responsibility list. What they value today might not be valued tomorrow. And vice-versa.

Consultancies who understand this do things differently. They establish continuous feedback systems that allow for regular adjustments. Partners engage clients in ongoing dialogue, ensuring their services are aligned with their changing needs and expectations.

Assumption 3: More expensive services equal higher value.

Price signal matters in consulting. Your price is one of the elements clients will look at to come up with a first estimation of your service value. We've seen countless cases where a price increase led to increased perceived value.

So yes, your price does send a powerful message to the marketplace. But that’s only one part of the story.

The other side of it is that your prices, obviously, must be backed by actual value. You need to deliver what you sold. If you can’t substantiate and justify higher prices, they will be seen with skepticism by clients.

Assumption 4: Value is only derived from core services.

Yes, your main offerings need to deliver real value to clients. But consultancies that focus exclusively on service lines risk becoming commoditized. Or with a huge offering mix that only confuses or overwhelms prospective clients.

I believe most consultancies miss a great opportunity here: Enhancing client experience and satisfaction through complementary services. These could be workshops. Training sessions. Education content. Exclusive tools.

Continuously assess client needs and preferences to identify opportunities for value-added services that complement your main offerings.

Assumption 5: Improving client value requires major changes to your offerings. 

This idea is also implied in the previous assumption. Some consultancy partners imagine that, in order to consistently increase client value, they will have to make changes that are costly, risky, and/or disruptive. Of course, that belief ends up creating resistance from the team.

This assumption couldn’t be closer to the truth - most of the time, what happens is the exact opposite.

Cultivating client value is like tending to a garden. You must plant the right seeds (services), nurture them with care (client relationships), and regularly prune and weed (continuous improvement) to see the garden flourish. It's an ongoing process that requires understanding, nurturing, and adapting to changing conditions.

Now, how you increase client-perceived value will depend on your specific context. But it will likely include initiatives to:

• Understand what clients want and expect: You will need to do some basic research to clarify your target clients’ business goals and what they value most in your services. With that in hand, you can tailor your offerings to better meet the specific needs and expectations of each client.
• Measure client-perceived value: Establish KPIs that align with client goals to measure success. Very few consulting projects can be completely measured with direct financial metrics such as revenue growth and cost savings. What you usually have is several indirect financial metrics (retention, customer satisfaction, employee turnover) and non-financial indicators (new capabilities, personal development, more accurate market insights, reduced risk). You need to use a mix of those to ensure clients understand the full impact of your work.
• Rethink your pricing model: It's impossible to separate price and value since clients compare them to evaluate your net impact. As long as you price your project based on your inputs (hourly or daily pricing), you reinforce a transactional and commoditized view of your work as a consultant. Consider updating your pricing strategy to use more output-based (fixed fees) and outcome-based (performance/success fees) pricing.
• Have more and better conversations about value with clients: Many consultants think the value of their work speaks for itself, but that's not true. A couple of small publications suggested that there's a strong correlation between the clients who said that consultants raised the topic of value with them frequently, and those who were more likely to positively evaluate it. Use your discovery conversations to discuss what type of value they are looking for. In your proposals, quantify value using a mix of direct and indirect KPIs. During delivery, highlight how much value is being created. When you wrap up, discuss how your client will continue to track value - and follow up after a while to help them do that.
• Leverage Technology: Use dashboards or reports to give clients visibility on how much value is being created with the project. You can also use data analytics to track client behavior and preferences, enabling more personalized service. 

Demonstrating to clients that your projects actually generate value for money is not simple and must be looked at from different angles. Recognizing that the "value-quality" gap exists (see “one number” section) is a good starting point for you to start reflecting on how to eliminate it from your practice.

“(...) Firms will need to ensure that a value-driven philosophy is embedded into every stage of project scoping and delivery. To achieve that, many firms have encouraged their account managers to become more proactive in talking about the subject with clients - elevating project scoping discussions from the level of “what do you want us to do?”, to that of “what type of value do you want us to create?”. In some cases, this philosophy may even lead firms to turn down work where there isn’t a clear opportunity to add value.”

Source: The value of consultants, Source Global Research

The “value-quality gap” is the difference between how clients see the quality of the work delivered by consultants, and the value created by them. According to research published by Source Global Research:

• From 2017 to 2021, an average of 69% of clients spoke positively (gave a "high" or "very high" rating) about the quality of the work delivered by consultants.
• During the same period, only 40% of clients spoke positively about the value created (the value delivered was noticeably greater than the cost of the project).

You might disagree but to me, a 30% gap is quite big and difficult to ignore.

How well do you know what your clients truly value?

This question challenges consultancy founders and partners to reflect on their understanding of client needs, expectations, and perceptions.

It's not just about what you think you offer; it's about what clients believe they receive. Trying to answer this question can unveil ideas to align services more closely with client goals, innovate in value delivery, and build stronger, more loyal client relationships.