There are more than 1,300,000 consulting firms in the United States. This number spans a variety of specialties and includes everything for the largest firms, to the solo practitioners.

If you asked 100 consulting firm founders what their special sauce is, how many would tell you some variation of: "it's our people"?

If you asked 100 solo consulting practitioners, what their special sauce is, how many would tell you some variation of "my deep expertise"?

Now let's think of this from the client's perspective - if everyone is saying that their special sauce is the deep expertise of their people, how are you supposed to decide which firm is right for you?

This lack of differentiation is the main reason why most firms struggle to grow - they struggle to attract new clients and struggle to attract talent. And it's not that this isn't true. Of course your people are the difference - that is quite literally the definition of consulting (or any service business) - your people are the ones delivering the work and the value. But that is true for every single other consulting firm out there. Of course you have deep expertise and are able to solve complex problems. If you weren't, you wouldn't have a business. Clients wouldn't be paying you hundreds of dollars per hour if you weren't solving complex problems they can't solve on their own. But that is true for every single other consulting firm out there.

So if it's not your people, and it's not your deep expertise—then what is it?

This is a positioning problem.

Perception vs. Reality

One of the most common perception vs. reality disparities we see in consulting and advisory firms is around positioning and messaging. When asked whether they have a unique value proposition that their ideal customers understand and need, firm founders and CEOs usually rank themselves fairly positively (from neutral to strongly agree on a 5 point scale). But when we dig in, they realize their perception doesn't actually match reality.

Here are the four questions you can ask yourself (these questions are directly out of our Growth Gap Assessment):

• Is it easy for prospective clients to understand how we can help them from our people and our website?
• Do our people have a comprehensive understanding of the problems we solve for our clients?
• Does the entire business development team use the same language to describe what we do and who we do it for?
• Does our content effectively communicate the problems we solve and our unique value proposition?

Another great exercise is to ask all the core stakeholders to describe what they believe your value proposition is. If you see major difference in how they describe it, you have a problem.

The Differentiation Formula

To get at your actual differentiator, you need to answer the following questions:

• What specific problems do you solve?
• Who do you solve these problems for?
• What unique methodology and frameworks do you use to solve these problems?

The answer to that last question about unique methodologies and frameworks is your differentiator, but it only matters in context of the who and the what.

Your differentiator is your understanding of the shifting market dynamics and the unique POV about what clients should be doing about it. Your differentiator is in the IP of how these complex problems should be solved - it's the methodology, the frameworks, the research, the benchmarks, the tools, and how your people are able to apply these to your clients' unique problems. The vast majority of firms have all of the above, but it's hidden. The ones who don't, are doomed to fail due to commoditized work and a race to the bottom with pricing and margins.

You need to uncover and synthesize these things in a way that your ideal clients will find exciting, and in a way that doesn't make them too skeptical. Be careful of using words like "innovative", "leading-edge", "cutting-edge", etc. These words are too fluffy and also risky. They often create more skepticism than excitement.

Need help figuring out whether positioning is a problem at your firm? Take the Growth Gap Assessment

Not sure what your growth gaps are, and how to best prioritize your budget and resources? Check out our Growth Readiness Roadmap engagement.