Relationship-Led Growth

Transactional sales and marketing don’t work for consulting firms.

Choice is increasing at the same time as trust is eroding. AI, offshore talent, and the proliferation of the fractional everything officer are all coming together to increase the consulting options available as well as the number of those options people actually get exposed to.

The world has gotten incredibly noisy. Companies are screaming through their proverbial megaphones making ideal customers overwhelmed and ignore most outbound outreach and lead gen focused content.

Trust is eroding because buyers are tired of being bait-and-switched, manipulated, and hounded throughout the buying journey.

Firms that don’t adjust their go-to-market approach will lose millions on outdated tactics and missed opportunities, and we are already starting to see this with many consulting firms seeing flatlining growth, pipeline slowing down, and cost to acquire new clients rapidly rising.

Smart organizations will refocus on a core tenet of business and being a human - trust is built through relationships, and relationships drive revenue.

That relationship-first mindset is Relationship-Led Growth.

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What it is

Most go-to-market frameworks completely ignore the psychology and behaviors related to how people build relationships.

Inherently we all know that relationships are critical to business success. But when it comes to sales and marketing, we tend to forget that revenue is an outcome of great relationships. We develop an incongruence between the mindset we know works and the sales and marketing activities we execute.

Relationship-Led Growth (RLG) is a go-to-market motion that builds revenue-generating relationships at scale by fostering affinity, enabling conversations and nurturing relationships with stakeholders across your entire industry ecosystem.

What it isn’t

There are a number of misconceptions and limiting beliefs that constrain the way most business leaders think about relationships.

RLG isn’t a framework to exchange warm introductions through partnerships. This is a potential outcome as well as a channel you can pursue as part of your RLG implementation, but it is by no means RLG in its entirety. The reality is that by focusing on introduction exchange, you exclude the vast majority of referrals you can get.

The vast majority of available referrals are what we call Affinity Referrals. They are referrals from people who have never spoken to you directly and haven’t worked with you, but have built up a level of trust in your people and your ideas that they are willing to mention you when someone asks about a relevant problem or topic.

RLG isn’t a demand generation framework. Yes, RLG can help you generate demand, but it also involves your business development team and outbound strategies as well as client success and retention strategies.

RLG isn’t even just a sales and marketing strategy. It is a go-to-market strategy that involves building a relationship culture in your organization. A culture that enables your people to build relationships by evangelizing your unique ideas within relevant industry groups, which in-turn will build affinity with your firm.

Why Relationship-Led Growth?

RLG is the natural progression in the growth model maturity in consulting organizations, and implementing it’s core tenets early will help you accelerate through the early stages.

1️⃣ Network-Led Growth: When you first started your firm, it was all about who you knew at that point in time. You needed the business and you reached out to those people who you have either worked with prior or those close to you who have connections to the types of people who could use your expertise.

👉You likely didn’t have your niche, revenue model, or unique POV figured out yet at this point.

2️⃣ Reputation-Led Growth: As you worked with more clients, you developed a reputation for delivering results. Some of your clients either openly referred you business, or would talk about you in passing, which drove more business. If this didn’t happen, you likely wouldn’t be here reading this.

👉 You likely started seeing some patterns in the type of clients that benefited the most from your product/service and were also the most profitable for you. You also figured out your POV and niche, though it likely didn’t fully crystalize just yet.

3️⃣ Networking-Led Growth: By doing more business, you started to meet more people. You also purposefully and strategically expand your network. You attended events, joined industry groups and associations, and looked to build relationships with key influencers.

👉By this point you likely developed a solid POV on how business in your industry should be done, figured out who your best-fit clients are, and identified what pain points of theirs you can solve better than anyone else.

4️⃣ Sales-Led Growth: You grew to a point where more passive business development isn’t enough to sustain growth. You need dedicated outbound activity to drive net-new client acquisition.

👉 To be successful here, you figured out a sales processes, created a solid pitch that anyone in your company can repeat, and implemented some technology and systems to enable sales conversations and relationship nurturing.

5️⃣ Your growth rate has now declined (or completely flatlined) because you are coming close to only replacing the natural churn that exists in your industry. Your reputation is still very strong, you still have very seasoned business development people, your POV still resonates in the industry, but you simply aren't able to grow because your current growth model doesn't have enough scale.

👉To be successful here, you need to move to the next stage of growth model maturity. Relationship-Led Growth. This will allow you to:

- Build affinity at scale

- Have more conversations coming inbound

- Enable more and better outbound conversations

- Better nurture existing relationships with clients, partners, KOLs, etc.

Without RLG you are likely to experiencing the following:

👉 Plateauing growth rate - Your reputation-led and sales-led motion has taken you as far as it can. You do great work, and your sales team is doing well building 1:1 relationships, but your business has scaled to the point where you are only replacing natural churn.

👉 Constant pivots - You know what you have done historically is no longer enough, but you seem to be pivoting from one channel, tactic, or strategy to the next without clear growth or ROI to show for it.

👉 Unscalable and unsustainable growth model - You are dumping money into incremental sales staff and resources, and into paid media to generate leads, but the unit economics seem to be getting worse and worse as you scale.

The fact that you are constantly pivoting and not seeing the ROI or positive unit economics is causing you to cycle through marketing and sales resources at a rapid rate. Which in turn only further exacerbates pivots and unfavorable unit economics.

👉 The feast and famine cycle - financial pressures have turned your attention to cost cutting and short-term revenue gains. Which yet again, exacerbates pivots and declining unit economics as you turn more and more to transactional activities in hopes of making immediate topline impact.

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How is it different?

The problem with most _____-led growth strategies is that that’s all they are - strategies. A given business can implement several or even all of these strategies to drive success, but they can’t all be the lead strategy.

Relationship-Led Growth isn’t simply a strategy. It’s a go-to-market framework that puts the relationships at the center, meaning that the execution of any strategy must be based on a relationship-focused mindset.

Community-Led Growth vs Relationship-Led Growth

People build affinity to brands through people, ideas, and groups. Community-led growth is a strategy that focuses on building a community (a group that you own access to) around your ideas. This can be a community built around virtual events, your podcast, in-person events, etc. It is a powerful strategy and can be a part of your RLG implementation, but building a community isn’t the only way to build strong revenue-generating relationships.

Partner-Led Growth vs. Relationship-Led growth

Every consulting firm, as it matures, develops either formal or informal strategic partnerships to drive revenue. These partnerships can be with:

Technology companies whose platforms you implement
Service companies or individuals that are either above or below in the value chain
Service companies or individuals that offer adjacent services

These partnerships can take on a variety of models - anything from simple referral partnerships, to co-marketing and co-selling agreements.

While a formal partnership program can definitely be part of a relationship-led approach, the main difference is that RLG really focuses on the individual stakeholders rather than organizations. This means an RLG implementation will focus on building individual relationships with partner organizations.

Additionally, RLG will also heavily focus on building relationships with industry influencers and KOLs in an effort to build more affinity via their audience.

Marketing-Led Growth vs. Relationship-Led Growth

The problem with most marketing-led approaches is that they still focus on faulty mental models as their core - the marketing funnel and the touchpoint-based buyer journey. Both of these try to predict or assume what a given person needs to interact with and when. But this requires us to be mind readers, which we are not.

RLG, on the other hand, focuses on human behavior and follows a predictable relationship journey. This mindset and approach allows you to really focus on building relationships at scale instead of trying to lead score your way to success. Because revenue is an outcome of great relationships.

Sales-Led Growth vs. Relationship-Led Growth

Contrary to popular belief, sales is actually a very noble profession, especially in professional services where sales has to take on a very consultative approach because what’s being sold is intangible and complex.

The sales-led approach is very effective, but it has a limitation - a sales person can only do so much activity (e.g. emails, calls, meetings, travel) in a given period of time. This means that sales-led growth is linear.

RLG is actually very complimentary to an already optimized sales-led organization because it is a force multiplier. It allows your business development team to have more and better quality conversations, all while also driving affinity at scale.

Product-Led Growth vs. Relationship-Led Growth

A product-led approach isn’t really an option for professional services organizations, but there are some lessons from PLG that can be applied in RLG.

The entire idea of PLG is to focus on the product, have customers try the product for free, and then transition to paid customers.

While professional services firms don’t have a tangible product to sell, it is possible to use things like courses, and other educational resources, to create opportunities for your ideal customers to be exposed to your ideas and to see what it’s like to work with your people.

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