Many professional service firms have learned how quickly good times can turn to bad
Sometimes this can because of a route to market failure
Our belief is that developing business is something that must be done in good times and in bad
This way you may delay and minimise bad times.
Some of you may realise that one source of your revenue decline has been due to the failure of a single route to market.
In order to reduce that risk in the future requires not just increased business activity, but a diversification of the routes through which business comes to you.
Our suggestion is that now that a recovery is underway, could it be a good time to do that?
Examples of route to market failure include:
- Rainmaker failure or moving
The loss of a rainmaker who provides a disproportional share of the new business.
- External referral source retirement
Maybe a referral source who provides a disproportional share of the new business.
If your consultants receive all of their leads from say a turnaround manager, when that person retires your sole route to market disappears
- Client education programs not working.
Consulting firms often run seminars on specific methods for dealing with corporate problems.
After the seminars attendees often hire them for large engagements.
At first these seminars attract high-level participants, but after time, more and more junior people enter the mix.
When senior people stop coming to the seminars, lead flow declines and there are less leads.
- The failure of an internal referral channel.
The engineering studio of one firm got all of its business from projects that originated with the firm’s architectural studios.
When architectural projects dried up, so did the engineering studios lead flow.
- The management of the studio began to develop personal relationships with client facilities managers to give them a second, less cyclical, route to market.
At the large accounting firms, the passage of the Sarbanes-Oxley Act reduced leads from audit partners to forensic accountant practices specialising in litigation support to zero overnight. The litigation support consultants, who had relied entirely on audit partners for a steady flow of new cases, had to scramble to develop new routes to market.
Route to market failure is surprisingly common and can be devastating.
The single route to market usually looks as if it will never cease to provide new business. In almost all cases, its failure comes as a big surprise. The best way to avoid the problem is to have multiple channels to market.
Any professional services firm which relies on a single route to market exposes themselves to grave risk.
I hope that you appreciate us sharing our views with you and that the ideas have given you food for thought and action.