Business Scaling Strategy
Episode 1026: Business Scaling Strategy, with Michael Zipursky
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Business Scaling Strategy: Learn effective methods to expand your company’s operations by exploring our guide on business scaling strategy.
Business scaling strategy? We’re asking ourselves what new strategies…what shifts inside Predictive do we need to make in order to double down in 2023 to raise the standard of excellence and be even more helpful to our clients — and at the same time — remove obstacles that might be in the way of us growing and scaling Predictive.
Today, we invited Michael Zipursky, CEO of Consulting Success, to discuss the best business scaling strategy. Michael and his team specialize in helping entrepreneurial consultants grow profitable, scalable, and strategic consulting businesses.
Applying these strategies, which Michael shared with us today, will most likely help you gain the right client for your business.
What you’ll learn in this episode is about business scaling strategy:
- How Michael started his first consulting business as he was entering university, and how his career path gave him a broad range of experience in business scaling strategy.
- How Michael has scaled his consulting while maintaining a laser focus on serving others and being as helpful as possible
- Why being transparent and vulnerable about his own ups and downs has been a crucial component of Michael’s ability to build credibility and trust
- Michael shares the four stages of the business scaling strategy he takes clients through and he shares why each of these stages builds upon the one before
- Why marketing should be about delivering value and building relationships rather than focusing on sales and promotions
- Why putting your marketing engine in place and following Michael’s three-part process can allow you to raise your prices due to the value you’re offering
- Why mastering the “deep and meaningful sales conversation” can be a powerful way to establish credibility and increase perception of value
- Why the structure of fees you use matters, and why marketing is a skill anyone can learn even if they’re introverted
- Why the kinds of deep and meaningful sales conversations Michael talks about can help you strengthen your long-term relationships with your clients
- Why doing the hard work of building your confidence in your pricing is crucial for business growth
Resources:
- A new study on how to become a consultant: www.consultingsuccess.com/how-to-become-a-consultant
- Explore more ideas about business scaling strategy by tuning in to our free video tutorial: Our “ROI of Community” Framework
- Free 47-Page Consulting Blueprint Guide: www.consultingsuccess.com/blueprint
- Learn more about business scaling strategy. You can find Michael here.
- LinkedIn: www.linkedin.com/in/zipursky/
- LinkedIn: www.linkedin.com/company/consultingsuccess-com/
- Facebook: www.facebook.com/ConsultingSuccess
- Twitter: @ConsultingBuzz
Business Scaling Strategy: Full Episode Transcript
Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.
Good morning. I’m Stephen Woessner, CEO of Predictive ROI. And your host for Onward Nation, whom I interviewed today, is the top business owner. So we can learn their recipe for success, how they built and how they scaled their business. As my team and I step into the fourth quarter of 2021, you know, we find ourselves thinking about two main priorities. From now on, my guess is you and your team might be thinking about the same, too. So first, we’ve been asking ourselves what we need to do in order to ensure that we’re super helpful in the fourth quarter so we can help our clients close out their year as strongly as possible.
Second, we’ve been thinking about what new strategies and shifts in our business we need to make in order to double down in 2022. So we can be even more helpful to our clients, more helpful to our audience, and at the same time overcome challenges and remove obstacles that might be in the way of us growing Predictive. ’cause here’s the reality: when Predictive grows, it means we have an even greater opportunity to be helpful to more agency owners, more coaches, and more consultants, and that we can be more helpful in deeper ways. So, for today’s episode, we’re going to focus our time and attention around proven time-tested principles, strategies, tactics, and best practices that you can use to accelerate your growth in the fourth quarter and step into 2022, feeling the solid as possible.
So, more specifically, how are we going to do that? Well, this is what we’re going to dig into: how to apply three specific steps to consistently attract more right fit clients. That sounds awesome. Right? We’re also going to talk about simple shifts that you can make to increase what you charge by 300% or more. We’re also going to dig into practical ways to turn failure into a growth opportunity and how to use that worry to your advantage. We’re going to talk about how to create long-term relationships with your clients. Now, I agree that sounds like a pretty tall order, an important one, but it’s a lot.
Business Scaling Strategy: Michael’s Introduction
So, to help us accomplish this tall order, I invited Michael Zipursky, the CEO of Consulting Success, to join us as our guest expert. Michael is the author of three books. He’s helped thousands of consultants, just like you and me, around the world add six—and seven-figure annual revenue, and over 38,000 consultants read his weekly newsletter. Okay. So, without further ado, welcome to Onward Nation, Michael.
Do you agree to be with you? Thanks for having me.
It’s great to have you here, sir. Thank you for saying yes. And before we dive into that tall order of breaking all of that down, which I know is a ton, I’m excited to have your expertise as part of this conversation. Before we do that, actually take us behind the curtain and just tell us a little bit about your path and journey for some additional context, and then we’ll dive in.
Yeah. So I started my first consulting business with my cousin and business partner, some when I was entering university, and we built that up, I ended up opening up another consulting business a few years down the road and ultimately ended up going over to Japan where I opened up the branch office for one of our companies called concave culture. During that time, I had the opportunity to advise and work with and consultant for very large organizations, especially for me as a young 20-something-year-old to guide organizations like Panasonic and Dow Jones, Japan and Financial Times, Japan, Omron, and Sumitomo, and the whole bunch of other billion dollar organizations.
So I did that for five or six years, building that business in Japan ended up coming back to North America, and started another consulting business this time, really focusing on helping professional services organizations. So other consulting firms, law firms, investment, and insurance companies to generate leads and do that in a more predictable and consistent way. Around that time, both Sam and I built and sold some businesses together. We were doing different things, but we were sitting down at a family barbecue one summer, and we said, you know what? It’s been a little while since we’ve done something together, it would be really kind of cool to do something together again, but this time, let’s do it online.
And so that’s kind of where the idea of consulting success was born. We didn’t have, at that point, a clear business plan or even a monetization plan; we just thought, let’s start off as we’re each doing our own things right now, let’s collaborate together to create something online that would be a source of, of value and really a resource for other consultants where we could share the good, the bad and the ugly, what we had gone through over the last decade at that point of, of building businesses, having a lot of learnings or, or lessons that we had learned some steaks. And so we share that we really want to help people accelerate their success and avoid common mistakes that people make. And that’s really what started to build a community around it, where people said this: these resources and articles that you all have are great.
Business Scaling Strategy: From Courses to Coaching
Business scaling strategy? Do you have a course that we could leverage and use to become more successful consultants? We said, no, we don’t have that, but we’ll create one. And so we created a program that is now called momentum, and then people went through that program and said, this is really great information. I’ve got six figures or whatever it might be in my consulting business. Is there a way to work more directly with you? And at that point, we said, no, we don’t have that, but we create a coaching program. And so today, we’ve had thousands of consultants go through our online training programs and courses, and we’ve had what 600 consultants we’ve worked with personally through our clarity coaching program, really helping them to scale up their business in a strategic way. So that’s kind of where we are now, about 23 years from that starting point.
Clearly, you’re doing something right with the type of distribution that you have for your weekly newsletter and the in-the-trenches work that you’ve done alongside hundreds of consultants. It’s amazing. And I think it’s so awesome to that, that when your audience, like when you go to your audience with generosity and to teach and to share in it, and it’s obvious to them that you’re in it for them, and then they come to you and say, Hey, could you help me this way? Hey, could you help me that way? And then you built those out really, really smart, as opposed to trying to build out this elaborate value ladder that you have no idea. If there’s going to be a product-market fit or whatever fancy word you want to use, but your audience came to you and said, this has been super helpful over here. Can you also help us with this?
Right. If I’m understanding the path correctly.
Yeah. I mean, we made that mistake in another business. And so we learned from it that we invested at that point, which was over a decade ago, probably about 20,000 plus dollars into building this kind of online application and community that we thought was what the world wanted. The only problem with that idea is that we didn’t ask the community whether this is actually what they wanted. So, we built up a beta user list. And when we launched, we found out that essentially everything that we had spent so much time trying to add all the best features and the program programmers and developers that were like, we really pushed them to, to get it just right, because we had that mindset mentality that needs to be perfect when we launched and we launched, and people said, yeah, this is great, but we only want 5% of what you actually have in this thing.
Best business scaling strategy:
And so that was a really important lesson for us to learn. Luckily, we were able to kind of, as they say, in the startup world, we were able to transition and remove the things that people didn’t want. Really focus that in on what people did want, and build that out. Ultimately, several years later, we ended up selling that business, and it was acquired. It turned out well for us, but it was a very good lesson that we still try and share with the community and with our clients to this day, which is so many of us as consultants or people coming in from the executive world into advisory or agencies or coaching, we have this mindset that you need to have things just right. They need to be perfect otherwise, you won’t be successful. But what we’ve seen firsthand is the importance of what we often describe as being imperfect action, taking that action because the ultimate way that you learn whether something works or doesn’t work is not by planning and thinking through it’s by putting it out into the world, having a conversation around it, and then you actually get to see what people want and don’t want.
Business Scaling Strategy: The Power of Authenticity in Building Trust
Okay. This is going to feel like a long roundabout type of question, but you’ll see where I’m going with this really fast. Is that, so the story that you just shared there, some consultants in your community, some business owners in my community, they’re reluctant to tell them, to tell those types of stories, thinking like, oh, if I tell that story is going to reflect badly upon me, the way that you just told your story in full transparency, it’s not like you do try to put a lipstick on something that shouldn’t be there. I mean, you told the full story; my guess is when you tell that story that actually endears you to your audience, that makes you even that much more appealing because they’ve seen the scars, and they want to be able to learn from that as opposed to the other way around, which is really natural for us to think, oh gosh, I can’t share that because now they’re not going to, they’re going to think I’m less credible.
Yeah, but you’ve hit on something really important to Stephen. And I’ll transport you back to my early twenties. Being in Japan, surrounding served surrounded by executives and presidents of companies who were 50, 60, and 70 years old. So I was far kind of outnumbered both in terms of people around me, but also their age. I was learning Japanese but was nowhere near fluent at that point. And so I certainly felt like I should not show any vulnerability. I’ve noticed this with many people over time, in the early stages, you often think that you need to be PR like quote, unquote, professional. You need to, show and only focus on what is, what is good about you and not tell your story.
Business scaling strategy — But what I’ve learned over the years is that, in fact, the more open that you are about your story, the more that you share your vulnerabilities, exactly how, how what you said there, people actually see you as, as real, as human, because it doesn’t matter whether you are running a hundred thousand dollar a year company a $10 million, a year company, a billion-dollar, a year company, you still have very similar thoughts and you know, issues around self-confidence and self-esteem, and am I good enough? And all that is still playing in your mind, just in varying degrees, and you’re open about that. Then you let your guard down, which then lets the people around you. They put their guard down. Cause they now feel like you are accessible. They understand you better.
And if we look at, when you make a decision, to engage with somebody, it ultimately comes down to, do you trust them? Do you believe that they will be able to provide a new idea of what they say they’re going to do? And one of the best ways to kind of endear or garner or, or create that level of trust is, is to build the relationship. And if you think about how you build relationships, the people that you typically are most open with about the good, the bad, and the ugly of what’s going on in your life right now, the people that you’re really truly real with they’re your friends, right? There, there are people that you are closest to. So if you want to get close to people, right, then you need to open up. You need to tell your story. And in a world where there’s so much noise, so much hype, so many false promises by every quote unquote guru there online, the way to actually differentiate yourself is by being real, by being open, by telling your story.
Business Scaling Strategy: From Personal Journey to Professional Success
Of course, that includes what you’ve accomplished, but at the same time, you can connect what you’ve accomplished to your journey and what you went through before you got to where you are. We’ve been doing that in our business over the years, and we’ve certainly seen a very positive benefit from it. Every entrepreneur and consultant that I’ve talked to over the last couple of decades here has done that, and that is also very positive.
Then, about the benefits: It’s so refreshing in a world today where truth and transparency really matter. And you talk about differentiation—how awesome, right?
Yeah. We, Stephen, embarked on this kind of project a few years ago to create what you might call a mini-documentary about my cousin, Sam, and me and how we started consulting successfully. So if you go to Consulting success.com, you’ll see a tab called our story. And we have this video right at the top. If we went back 10 years we don’t; we would have never thought to create this video that talks about our parents, our grandparents, where we came from, where we lived, challenges that we faced. Why, because what does it have to do with business? That was our mindset back in the day. But I can’t tell you the number of people who jump on a call or engage with us or send emails and just talk about that video and say how much that resonates with them.
Business scaling strategy — And if you really kind of break that down of what’s happening there, when you’re putting out those messages, when you’re sharing your values and what you believe in, you’re going to repel the people that don’t share those same values with you, but that’s great because you don’t want to attract people that you’re not going to enjoy working with. Right? But at the same time, by sharing your values, your story, and your vulnerabilities, you’re going to attract more of the people who actually resonate with that same message. And now they know what you stand for. So, people are always searching for somebody or a brand with which they can connect. If you want to connect with more people, then you need to be able to tell that story. So what we’ve found is, I’m sure that some people will watch that video and go like, yeah, these guys are very focused on family and travel, and like they don’t have they’re not showing pictures of their Lamborghini’s and that’s, that’s not for me.
I want, and that’s all good. There is no judgment. Everyone chooses what they want to focus on, but we are very open about what’s important to us, and we find that attracts the same kind of people.
Business Scaling Strategy: The Four Pillars of Authentic Client Attraction Strategy in Consulting
Most of that crap is fake, anyway. But I love the tangible, the transparent, the real, and I love the word that you use to propel. And so that that’s gonna move us into one of the big items that I wanted to chat with you about is you talk about three specific steps, excuse me, three specific steps that somebody can use to attract right. Fit clients. and I feel like if you do that right, you also repel the wrong ones, and that saves you a lot of pain and suffering, and it helps them move to somebody that can be helpful for them if it’s not you.
So let’s talk about your point of view around the three specific steps that we should be using.
Okay. So I’m going to update us a little bit because there are really four pillars to the foundation that we always take clients through. The fourth one is related to marketing. The three initial ones, which are probably what you’re referring to, are necessary in order to get to that marketing stage. Great. So, number one is what we call ideal client clarity. And this is all about getting very, very clear on exactly who your ideal client is. We’ve seen this be a very powerful step to go through whether you are just transitioning from being an executive or in the corporate world, or being an employee to becoming a consultant, or we’ve had clients that are already running two and $3 million consulting businesses.
One of the best business scaling strategy is when they go through this process, and they go, wow. I buy by actually really analyzing who my ideal client is. I see that 80% or 70% or 60% of the clients that I was trying to target are in this category. Like they’re actually not my ideal ones. So it doesn’t matter what stage you’re out. There’s always an opportunity to narrow in and get very, very clear on who your ideal client is. And so there’s a bunch of factors here that you want to consider, but ultimately right, you want to narrow in and go as specific as you can. And the reason why this is so important is because the second step and kind of step second pillar here is what we call magnetic messaging, and magnetic messaging is all about developing a message that will get the attention and interest of your ideal clients.
That resonates with them, and they want to have a conversation with you. If you aren’t clear about who your ideal client is, then you can develop a message that will get their attention. Again, if you could go back to the world that we all live in right now, we’re all surrounded by ads and noise and just all this kind of clutter. Well, the way to cut through all of that is to speak directly. So if I say now, right now, even you’re wearing a blue hoodie, right? A blue polo hoodie, you’re in Wisconsin if I said if you live in Wisconsin and you know, love to wear blue hoodies, like that’s going to speak to you. Right. But if I’d have said, Hey, are you a man? Well, there are a lot of men out in the world, but that’s essentially the equivalent of what many people are doing with their marketing.
Business Scaling Strategy: The Key to Effective Client Attraction and Marketing Success in Consulting
They say, yeah, I help business owners or yeah. You know, we work in construction, or that’s okay, but you need to go deeper. You want to really speak directly to your ideal client. So they know that the message is for them. And these two cries, these two steps are so important because if you don’t get these two right, you can spend a great deal of time and money on things like advertising or emails or all the other kinds of marketing tactics out there in the world. And you won’t get good results because you’re going to end up attracting the wrong kinds of people. And more often, you don’t attract anybody. You don’t see that you’re getting the clicks, the opt-ins, the applications filled in, or the leads because your message isn’t targeting anybody specifically.
Okay. So hang on just one second before we move to the third one though. So when you, let’s say, you’re meeting a consultant for the first time and he or she says to you, Michael, I’m just, I’m super frustrated. I don’t know how to grow my practice any further, blah, blah, blah. How, like, what percentage of time do you see the stalled business or the declining business and they’re missing, and they’re missing pillars one and two,
It’s probably 90% of the time. Like it’s very, very common, again, it doesn’t matter whether you are just getting started. I mean, of course, they are going to be very relevant. Still, even if you are, you’re generating half a million, a million, 3 million, there’s still almost opportunities to look at because most people, as you’re growing your business, you’re not paying attention to all of the, like the sources of, of your highest profit, most profitable clients, most profitable services or products. You’re just, you’re just busy growing. And so it’s really important to take that, to take some time and actually do some analysis and look at well, where are my best clients and customers coming from, right? Who are they?
And how do I focus on getting more of them? One big hesitation, even that many people have when they get to this part of ideal client clarity. And this is to be very honest and try and be kind of transparent. This is one of the most challenging aspects of business or related to marketing because, from a psychological perspective, you have to, in your mind, be okay with saying no to opportunities. Most people believe that when it comes to business, the goal is to say yes to as many opportunities that come your way. And in the early days, you’re hungry for cash, right? You’re hungry for revenue. And so you feel like you do need to say yes to a lot of things, and it’s okay when you’re just getting started. If you’re not exactly sure what to say yes to or what to say no to, there’s nothing wrong with experimenting and taking on some opportunities that may not be ideal in the early stages, but as soon as possible, what you want to do is you do want to narrow in one example, just to offer as it might be helpful for people as they think through this and go, yeah, but Michael, I have experience in five different industries or, but Michael, I can provide strategic planning and talent optimization and I can, I can also do marketing, and I’ve done some customer success work and so on.
Explore more ideas about business scaling strategy by tuning in to our free video tutorial: Our “ROI of Community” Framework
Business Scaling Strategy: How Narrowing Your Market
So, like, I’ve done all these things fantastic. But here’s, here’s the reality look at where you’ve created the most success, where you have the most access really, where you can see results of the most. And if you just look at that one market or that one type of ideal climb to that one main service offering, and if you look at then how you back into, what is your revenue goal for the year and what is your average project value? How many clients do you actually need each year to achieve your goals? You’ll probably find that it’s not more, or it’s somewhere between six to 20, give or take. In some cases, there’ll be a lot more, and in some cases, there’ll be a lot less, depending on what your average project value is. But from our surveys of thousands of consultants, that’s typically where most people land, like annually six to 20-ish clients per year, giving them close to what they want.
Now, that being said, if you look at that industry or that market, how many companies, how many IO clients actually exist in the market, and it’s probably going to be hundreds of thousands. So tell yourself that you need to water down your message and water down your focus so that you can go after more markets when you can make your messaging and your clarity around your ideal client. So much stronger just by focusing, you probably have more opportunity in that one market, in that one segment than you can ever handle yourself like there’s just gonna be more business. So why try and go after more when there’s already enough in front of you? And that’s where I see many people kind of pulling themselves in the wrong direction. Cause they’re trying to cast a really wide net when they don’t need to, they could see much greater and much faster success and make progress much quicker by narrowing it in.
They have a very then specific body of work that reiterates the fact that they have a depth of expertise. Yes. Yeah. I know you do a lot of work with your clients right around the authority building, and this ties into it. Like there’s writing, an article on leadership. Like that’s not going to do much for you because you’re competing with Harvard business review and every other well-known publication. But if you’re writing an article on, let’s say, the mindsets of CFOs in the tech industry, and you can be that specific, that’s going to, that people will find that and they will, they will, they will resonate with that because that content, so we call specialized content in our world that that is directly for them.
Business Scaling Strategy: Simplify and Succeed
So that’s the opportunity. Do you want me to go on to number three, Steve, please do. This is great. So, number three is what we call strategic offers. And this is really all about how you take all of your years of experience and skills and expertise and package it, position it, place value on it and price it. The ultimate goal is that you become very clear on really what it is that you are offering. In our experience, we’ve found that most consultants or most people in professional services can reach a million or $2 million per year with just between one to three offers. A lot of people end up developing five offers, 10 offers.
They have a laundry list of all these different things that they can do, but in fact, they don’t need to have all that there. They’re creating complexity, and complexity doesn’t scale. So narrowing in and really figuring out what are, what are those few offerings that align with my business model will help me to create the kind of lifestyle and the success that I want to see, but also really deliver to my ideal client exactly what they want. So that sales don’t become something that I have to do to somebody’s sales assigned that I can do with somebody or for somebody. It can become a collaborative process. And when you have enough conversations, you start to get very clear on exactly what the marketplace wants.
And then your job is just to offer it to them. That takes all of the stress out of having to persuade and cajole and twist people’s arms, which nobody feels comfortable doing, which is why most people don’t like the idea of marketing and sales. But if you get very confident and clear about your offering and you figure out that it’s what the marketplace wants now, you’ll be much more confident. You’re much more likely to go and have conversations with people because you have something to talk about. So that’s strategic offers and then the fourth pillar, now it takes us to market. And so what we call the marketing engine, and this is all about how can you put in place a system, or I should say, put it putting in place a system that allows you to get in front of your ideal clients first getting on their radar.
So they know that you exist, but then getting in front of them on an ongoing and consistent basis where it’s not about sales and promotions and spammy messages, it’s about delivering value and building relationships. That’s the marketing engine. The problem is that we often see Stephen with people in professional services. So whether it’s agencies or coaches or consultants, is that they tend to start thinking about the marketing piece before the other pieces, that the challenge that they say the language that you often use or that the conversation in their mind is I need more leads. Of course, you need more leads. I mean, what business doesn’t want more leads? The problem is that it’s very hard to generate more leads, especially qualified high-value leads, if you don’t have the other three pillars in place.
So, what we always want to do is encourage people to go through the process of ideal client clarity, magnetic messaging, and strategic offers. Then you can turn that marketing engine on and actually start to see results because you’re going to have a message that’s that can be targeted to somebody. Very specifically, you can develop content for that specific type of person. You can have offerings that are again developed with that specific person in mind. And then things start to click.
Business Scaling Strategy: Strategies to Increase Fees by 300% or More in Consulting
I love this so much. This is so, so good. So let me, let me go through my notes here real quick and make sure I captured these correctly. So the first pillar is ideal client clarity, the second is magnetic messaging, third strategic offers. He broke that down into slices, which actually goes into my next question. And then the fourth was the marketing engine. You got it.
Awesome. So let’s take strategic offers and slice that apart a little bit because Onward Nation heard me share in the introduction we were talking about pricing. One of the things I thought was just like really compelling as preparing for this conversation was how to increase fees by 300% or more. So then, when thinking about that and how you just broke down strategic offers, I thought, okay, it’s packaged it, value it, price it, and so forth. I’m like, well, that’s going to loop back into the 300% piece. So how do those hooked together? Yeah.
And it can be, in some cases much higher than 300% and, the other cases, lower, but the lowest hanging fruit for most existing consultants or probably agencies and coaches as well is pricing. Like if you want to make more money, you usually don’t need a lot more leads this is based on if you already have an existing business and things are up and running, the lowest hanging fruit is almost always working on your pricing strategy. So, increasing your fees without having to spend more time or do more work is a three-part process. The first is what we kind of refer to as pre-sales. And this is everything from the content that you create to the case studies that you have, it’s really about how you go about demonstrating value to the marketplace.
If people see you as a true expert and as an authority in your field, in their minds, they already, they already equate that with being a higher price. But if you think about the levels of specialization, you think about what it would cost you. For example, see a general dentist to do a cleaning, but then you think about what would cost to go see a periodontist or an orthodontist, right? These are higher levels of specialization. Therefore they’re going to cost more. People just know that, right? It’s a brain surgeon versus a general doctor. It’s it’s your family practice. You know, a lawyer that does everything from wills and divorces to personal injury, like uncle Jimmy or whatever.
Business Scaling Strategy: Elevating Sales Conversations for Increased Client Perception
This does everything under the law umbrella, or the international tax attorney specialists, like people, know their fees are gonna be higher because of the higher level of specialization. So first step is the body of work and intellectual property that you create and that you put out into the world consistently so that people see you as an authority expert before they even engage with you. Number two is once you engage in a conversation with a buyer, this is where a lot of people will make a big mistake. And that is that you want to have what we call a deep and meaningful sales conversation. This refers to going much deeper and beyond the surface-level questions that many people ask.
So, for example, you might say tell me about your business, how long you have been working in this industry, or what you want to grow your revenue to. Right. All that kind of stuff. Right. Very surface-level questions. And, of course, you might go a little bit deeper than that, but generally, people ask a question like that, and they’ll go onto the next question, or they’ll spend a lot of time talking about their methodology and their approach and all that kind of stuff that doesn’t increase value or perception of value in the mind of the buyer. What does is going deeper. So you say, I see right now that, or you mentioned that you want to add an extra $10 million this year to your business. Why is that so important to you?
What have you tried to do to achieve that so far, what worked, what didn’t work have you thought about this? I worked with another organization, had this challenge and here’s what they did. Is that similar to what you’re going through right now? Or have you considered that right? If you don’t do this now, what are you concerned about that might happen? I see you go really, really deep. The goal of this conversation is that even if the buyer did not move forward, they’re already feeling that this is a very valuable experience. You’re differentiating yourself from almost every other consultant agency, owner, or coach out there because most people don’t ask these kinds of questions. The result, though, for the buyer is they think themselves, wow, like this person, right?
Business Scaling Strategy: Three Steps to Significantly Increase Consulting Fees
You know, Stephen asked me these questions, but no one’s ever asked me before, or I’m now starting to see things that I didn’t see before and connect dots that I didn’t connect before. That whole experience becomes valid and valuable to them. And the result of that is they say to themselves in their own mind, if I’m getting so much value from this conversation, and I want to imagine how much value I’ll get from engaging this person, I could try and figure things out myself or with my team, but why should I do that? If this person already clearly has the expertise, the track record, this, this the success, they know the path to get me from where I am to where I want to be. So that’s the second part. And when you do that, you’re increasing the perception of value. Therefore, you can also increase your fees. The third step is the actual increasing of fees itself.
And there are two kinds of parts to this. Whereas you might say, Stephen has two slices to it, right? The first is the actual approach or the structure of fees that you use. Right? So this would be a classic example would be going from hourly fees or a daily rate, or kind of just a standard project rate that, that is calculated by hours at the if you kind of really go kind of summarize it down or, or, or break it down to where, where, how are you getting that figure to shifting to a focus that is much more around value and around ROI or what we sometimes also call COI, which is the cost of inaction, right?
Thinking about what happens if you don’t do this right now, how does it affect your share price? Does it affect your employee retention? Does it affect competition? Does it affect whatever the patent that you want to get? So shifting from hourly fees or daily rates, which are essentially still an hourly fee, to focusing on capturing a fair level of value and return on investment turns it into a win-win. Even the conversation around that structure changes the language for, for the buyer of how much does it going to cost me to, oh, I see this as an investment because I’m going to invest $10,000 or $50,000.
But you’ve shown me through our conversation. Step number two is that the outcome of this work is going to be this upside. It’s gonna be this increase. It’s gonna be this potential return on investment. And so that switch gets people from thinking about, yeah, it’s going to cost to, oh, this is an investment. And most people treat the word cost and investment very, very differently. Cost is an expense, right? You try and avoid an investment. You think about, well, if I put this in, how much more will I get out? And if that looks positive, how much can I put into this? So those are the three steps to go through and we can go into as much detail as you want on those. But there are three steps to increase your fees significantly.
There are a number of reasons, Onward Nation. Why I think this is super smart and brilliant, and this will sound a little bit flippant, but you know, in point number three, when you said increase the fees, it reminded me of this training from Dan Kennedy. Like, I don’t know, a couple of decades ago. and he said I’m going to give you three steps to increasing your fees. And we’re like, oh, okay, here we go. Let’s take the notes. And let’s figure that out. He said, step number one, increase your fees. Yep. Step number two. See, step number one: stop making it so complicated. What you just gave us here was this really amazing Blueprint. And I like how you smartly put it, increase your fees and step number three, because if we do Onward Nation, we do steps one and two.
Business Scaling Strategy: Mastering the Art of Sales Conversations
I get the fact that raising your prices does oftentimes has to do with our own personal confidence. I get it. But the blueprint that Michael just gave you like mitigates or eliminates or removes any of the kind of imposter syndrome or mindset issues that might be creeping in. If you do one and you knock down the presales like he just showed you how to do it, engage in the conversation and take those deeper, Michael. So, this is the litmus test. Like when you’re having that conversation, a point, number two, you just talked about, and you’re asking the person, I guess, the prospect on the other end of the conversation when you’re truly engaged and really showing him or her that you care about that person’s goals and business, they lean into that conversation, and they stop caring about the price.
And they really start thinking about COI. What’s it going to cost me if I don’t hire Michael to help me fix these problems? Would you agree?
100%.
Yeah, that’s how you set up a sales conversation. Onward Nation. It’s not about pitching. It’s not about your methodology, your circles, your arrows, your proven process, or whatever. Everybody’s got one of those, but not everybody has the smarts and guts to have a conversation like what Michael just outlined for you in step number two. That was really, really smart.
Even for people who know, I recognize that many people aren’t comfortable having those conversations. They aren’t comfortable in marketing. They come from a background where, in their organization, they’ve placed most of the focus on the organization or the brand, not on them, or even if you’ve been running a business for a period of time, you just might be more technical. You might consider yourself to be an introvert for all kinds of reasons. But at the end of the day, when you kind of go through this process and apply it and study it, you’ll become more comfortable. This is a skill that you can learn. It’s not saying you don’t have to say to yourself, oh, wait, I’m not a salesperson. So, or a marketing person, so I can increase my fees or do this business stuff. You can do that.
Business Scaling Strategy: Building Strong Client Relationships
And we have clients in our world that are extremely technical in science and machine learning and AI and all kinds of stuff that very much consider themselves to be introverts or to be technical or scientific backgrounds and not marketers or salespeople by trade, but they’re, they’re learning this stuff, and they’re applying it, and they see fantastic results. So it doesn’t matter what your background is. If you focus on the right things and you apply the right approach, you can make great strides. And I think the point that you made as well, Stephen about just increasing your fees. Like ultimately, that’s one thing that you can do without even doing much else in your business. Right. and see a positive impact. Yeah.
So smart, really smart. So one of the other things in this sort of tall order, as I set up this conversation, that wanted to chat with you about was creating long-term relationships with clients. And so I’m making an assumption and tossing it your way that if we do a really good job in the three points, but we do a really good job in that middle point, really having those deep conversations, right? That makes the prospect feel like they weren’t ever a prospect, and you’re having a deep conversation about their business. Do you think that hooks into a long-term relationship because you’ve really proven that you want to learn their business to be healthy?
Definitely. I mean, the more value that you can create and communicate and deliver, the more that the client is going to want to be around you, which is very often why clients will start throwing all kinds of ideas at you, and this is where scope creep comes in. Right. Oftentimes, clients will become comfortable with you, and let us start saying, oh, can you help with this and this and this? And then the consultant or business owner will say, oh, sure. Yeah, because they don’t want to turn down the client, which is a whole other topic, but in terms of creating longer-term engagements, one of the biggest opportunities that I see for many people is that they don’t have a well-thought-out in a well-defined backend.
And what I mean by that is they’ll bring people into their world. They’ll provide some kind of service, but they haven’t thought much about what else I can offer this person. How else can I add value? How else can I serve them? And the best way to identify that is through conversations. So initially, if this is brand new, I mean, there’s, we have a whole process for this, but initially you can get great information by having conversations with, with your client, and from a marketing perspective, most people will default to, yeah, I need more clients. I kind of, therefore need more new clients. But in fact, if you have existing clients, the best source of business for you to grow your businesses, not new clients, is your existing clients.
Business Scaling Strategy: Maximizing Client Relationships
So, you don’t need to think about how to generate a whole bunch of new leads. Think more about how I can leverage the database that I have of past and current clients to do more with them. Then, you engage in conversations with them and identify how you can support them. You might have your own hypothesis about what they really need as well. And you put together a pro kind of a backend program or additional offerings so that you can provide greater value to those people. They already know you. They like you. They trust you. If you’ve delivered great results for them, that they’re not gonna, they’re not going to try and want to search for someone else. The reason why clients most often will go to other people or leave you is because they don’t know that you can provide them with other services or other offerings.
And so they go look for that support somewhere else. And I’m not suggesting that you should, or, you know, that you need to offer everything under the sun. It still needs to fit within your business model. But the idea is that if you can get very clear about how you can provide value to your existing clients, if you can get very clear on what are the, what is my program or kind of suite of offerings really looks like, how can I move people through that, that path, and then make sure that all of your client’s past, current perspective know that you can provide that. You’ll almost always be able to find ways to generate significantly more rev revenue and create longer-term relationships with your clients.
This is so awesome. Onward Nation. My coauthor drew McLellan from the Agency Management Institute. He also owns an agency in Des Moines called MMG or McLellan Marketing Group. Their point of view is unique and different. and I’m not going to be able to say it verbatim and quote the point of view of their agency. But their belief is their belief is exactly like what Michael is talking about. if we double down on the relationships with existing clients, they help their clients really develop love affairs, long-term relationships, and deep relationships with their clients, so much so that they recommend their clients invest 75% of their marketing budget in their existing clients, in being helpful and nurturing, and in just being that advisor and expert that helps their business grow.
Business Scaling Strategy: Mastering Pricing Confidence
And so, to your point that if you need additional revenue, you gave us a pricing model to do that, but then how can we be more helpful within a reasonable scope to existing clients? Because they already trust you. They’re already giving you money. So smart. So smart, Michael, thank you very much. I know we’re quickly running out of time, so thank you for helping us accomplish the tall order, but I set it up in the introduction. It turned out that was not an impossible feat. You did exactly that. So thank you very much for that, sir. And my pleasure before we go, before we close out and say goodbye, any final advice, anything you think we might have missed, then please do tell Onward Nation the best way to connect with you.
What do you feel, Stephen? The one area that your audience, your listeners, might be either struggling with right now or wanting to work towards?
Confidence around pricing. They don’t have confidence around pricing because they have not done the hard work that you mentioned in pillars one and two. So they feel like they’re aimlessly wandering through the wilderness, looking for that next client. One and two are hard work. They require discipline, but they lead to a path of abundance. However, it’s difficult for them to see it when they can’t make payroll next week.
Yeah. I have so many stories of working with clients, on overcoming this mindset. If we really boil it down, what I would encourage people to think about is the longer that you wait and delay increasing your fees, the more money you’re losing in your business. And I would encourage everyone to try to go through the process that we just talked about here. Do as much as you can, especially number two. We know, even if you don’t have the time, let’s say you have an opportunity coming up maybe tomorrow or next week to have a meaningful conversation a, with a prospective client or a buyer, and you don’t have time to develop all the additional IP and all that stuff. We talked about number one, just really focus on having that meaningful conversation, but go deep.
Think about an onion and how you want to peel back the layers and get to the core. And then when it comes to your pricing, increase your fees. As long as the value is justified, as long as it’s going to be a win-win for both parties, increase your fees because the worst case scenario is that they’ll say no, but if you structure your fees appropriately and depending on what kind of offering here it is, but let’s say it’s a full, engagement’s not a discovery offer a kind of, not, not an initial stage offer, but a discovery offer for a full engagement, sorry, not a discovery offer, but a full engagement then use, use three options in your pricing and increase your fees. That means that the buyers, now it’s not a take it or leave it situation. You’re giving them a choice around which fees and what level of engagement they want to move forward with.
Business Scaling Strategy: How Pricing Options Can Boost Your Revenue
And when you increase your fees, you’ll find out whether people say yes or whether they say no. Now, if they say no, they most likely, and hopefully if you structure this strategically, won’t say no; they’ll just go with a lower-priced option. But so you won’t lose anything. So, I’ll give a quick example here. Let’s say that your typical engagement is $30,000. So I would encourage you to make option number one $30,000, and you’d have a secondary option there. It’s $45,000, and option number three might let’s call it, $75,000. So, in the worst-case scenario, somebody might just go to option. Number one, that’s what you would, you would have charged anyway. The whole idea with option number one is that you remove some things that you typically would have provided, and you move that into option number two.
So if they go with option number one, you’re actually going to be much more profitable than you were before, right? Less time involved, whatever it is, if it was option number two, right now you’re providing what you just did before, but for an extra $15,000, which is a big win. And when you test that again, you can’t lose anything. There might be a conversation, and you’ll learn from that in terms of you have to adjust stuff, but you shouldn’t lose anything. But when you see that it works, when you see that it works for your situation, then every project going forward right now, you’re gonna have the confidence to do that consistently in every project you go that you use this on going forward, you’re gonna make significantly more money.
Yeah. In the Harvard Business Review. I love this example, Michael, thank you for bringing it up, and Onward Nation. The Harvard Business Review did exactly that, testing the power of three. And what they found is that the $75,000, the high anchor, made the $45,000 option that much more attractive. And so then they ended up choosing the middle option because they wanted the additional things that were sliced out like Michael just talked about. And so you’re now you’re going to sell probably more $45,000 engagements than you ever would at 30. What an awesome win.
Yeah. In psychology, they call it anchoring. So it’s this idea that the 75,000 when somebody sees that all of a sudden the 45,000 looks significant, lower. And just the way that kind of human psychology typically works, you’ll find that you’ll have the vast majority of people use around 60%, give or take, and then we’ll go for the middle option. Then, you’ll have a partial remainder going to option number one. But a lot of people, most people don’t want to buy the cheapest of anything. If you think about going into a Best Buy or anywhere you go to buy televisions. I mean, these days, we all probably do it online, but you know, if you went in before to a store, you’d see, okay, you have the real cheap televisions, like the store brand name or whatever. Then you have the middle kind of the pack, which has great features, really good value, and almost the latest technology.
Business Scaling Strategy: Strategies for Increased Revenue
And you have the $5,000 television with the curves. And I don’t know if it’s 4k or maybe even higher days, whatever it is, let’s call it a million case, something crazy. Right. And so most of you are not going to go, yeah, I want to spend $5,000 in the, on that television. But most people also look at the option to go, yeah, I don’t want to spend $200 on this, like Best Buy in Sydney or whatever is brand because I just, I know, it’s not as good. So they end up in the middle. So, you’ll typically find the majority are going to go with the middle option. Then, next will be option number one. And you’ll have six, 8% or so that will go for option number three. But the ones that go for option, number three, that’s gonna be a real windfall for your business.
Well, and so last thing here before we close out and say goodbye you pointed out at the beginning of our conversation in order to reach one to two to $3 million, you need one to three really good offers and you just illustrated a great pricing strategy, a great tier system in order to make that happen in, in help a business, be that much more profitable in the process. Super smart, really smart.
Cool. And you asked in terms of where people can come learn more connect I’m you can find me on LinkedIn. Michael Zipursky, feel free to connect, I always like connecting with people. I just asked her for a little note. So, I know that you came from the podcast here. Of course, every kind of Homebase is Consulting success.com, which has lots of resources. We are able to thousands of articles, videos, podcasts, and a whole bunch of stuff there, for free, as well as other programs. And then we do have a collection of our most popular articles, all in one place. It’s called Blueprint. It’s a 47-page guide all around best practices, strategies, tactics, and mindsets to grow a more successful consulting business. So, if anyone’s interested in grabbing a copy of that for free, you can go to Consulting success.com forward slash.
Blueprint. Awesome. Okay. Onward Nation, no matter how many notes you take or how often you go back and relisten to Michael’s words of wisdom, I sure hope that you do the key, which is you have to take this blueprint that he just gave you. You have to take it and apply it and accelerate your results when you do. And Michael, we all have the same 86,400 seconds in a day. And I am grateful that you took some of your time, said yes, and came onto the show to be our mentor and guide and help us move our businesses onward to that next level. Thank you so much, my friend.
My real pleasure. Thanks for having me.
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