The Mathematical Formula for Success as a Consultant
Wednesday, January 14, 2015
A technical writer recently sought out my advice on her business strategy. Her existing contracts were nearing completion and there was very little work remaining in her sales pipeline. What should she do to ensure that she would be able to generate more business? She was thinking of lowering her prices, entering a related field, or even (gulp) returning to full-time work.
In a way, her primary business model was similar to mine. She was selling her consulting services to businesses that required expertise. Rather than overwhelming her with economic theories, I asked her how she found the folks that she, herself, had hired. I immediately focused in on how she had selected a lawyer who had handled a payment dispute.
The first thing she did was to look through the phonebook. She then made a list of all of the lawyers who could take the case. There weren't many of them in the area, so it didn't take too long. Then, she called each of them up for a quick conversation. There were a few who didn't sound too intelligent. Those folks were eliminated from consideration immediately. A few sounded like they knew what they were doing. Of those, one lawyer stuck out above the rest. He demonstrated a strong knowledge of the field and described how he could help her with her case.
As soon as she had finished describing the process of selecting a lawyer, it was as if a lightbulb had gone off. We had developed a mental model of how she had hired a consultant.
INCOME = VISIBILITY * IMPRESSIVENESS
By placing ads in the phonebook, some lawyers were making themselves more visible to the writer. Of course, she didn't just want to hire anyone. She only wanted one who could help her. Lawyers who were visible but not impressive (or impressive but not visible) stood no chance to convince her to become a client. This model is imperfect, but it's a good start for thinking about a consulting career.
I've been able to use my blog to increase my visibility. Profits came slowly at first; my visibility was quite low. As I added each new article about pricing, and more people began to talk about my book on software pricing, more and more people were able to find me. Despite the fact that I'm not significantly more impressive than I was at the onset, significantly more money is flowing in my direction. In other words, it doesn't matter how impressive or skilled a consultant is, if no one is aware that he exists.
Many consultants mistakenly believe that they can simply be impressive, or simply be visible. It is absolutely vital to find a balance between the two. The fastest means to poverty is to focus on either visibility or impressiveness to the exclusion of the other.