Consulting firms are seeing sizable growth in 2023, but some key challenges in lead gen and client satisfaction remain.
It’s Q3 and you need to know how your firm stacks up. You’re in luck. For the third straight year, we commissioned research to better understand the challenges firms face in building high- performing lead generation programs and sustaining a strong business development pipeline. This year’s survey included 269 U.S. based firms with revenue in excess of $5M.
The survey was conducted in July 2023 and looked at:
- The performance of firms’ lead generation programs, pipeline development efforts, and revenue performance year-to-date
- Challenges firms face in growing their firms and managing at the intersection of business development and client delivery
- The sales and marketing behaviors of the fastest-growing firms
WHAT THE DATA TELLS US ABOUT GROWTH SO FAR IN 2023
Pipeline growth and revenue are up! 57% of firms saw more leads and 67% saw growing pipeline in the first 6 months of 2023, compared to the last 6 months of 2022. In fact, 80% said that their overall financial performance has somewhat or substantially improved relative to the first half of 2022.
Sure, the influx of leads is a positive — for now. But firms admit they’re still struggling to build an intentional, strategic engine that reliably converts interest into business growth. Many seem to view current performance as fleeting or lucky.
LEAD GEN AND CLIENT SATISFACTION ARE THE TOP GROWTH CHALLENGES
We asked firm leaders to rank order five specific growth challenges. Despite the majority of firms reporting they are seeing more leads, 28% of firms ranked “generating enough quality leads to build a healthy new business pipeline” as their number one challenge. For a lot of firms this tells us the quantity of leads is there, but the quality of ideal clients they’re attracting may not be.
Keeping clients happy also came in at 28%. But core sales capabilities like closing deals and managing backlog? Those growth challenges clocked in at only between 11 and 19%.
These growth challenges present an intriguing spectrum. At one end lies a core marketing and BD activity — lead generation. On the other is pure service – driving client engagement, loyalty, and advocacy.
The stages in between involve sales execution and balancing delivery with business development. When asked to rank these challenges, firms pointed to the extremes (lead gen and customer centricity) as most pressing. But the middling stages raised less concern.
I take this to mean firms feel more confident in their ability to perform at their best when sales and service teams work in concert. But in isolation, they feel less equipped on either side. Successful lead gen by itself and client satisfaction by itself feel intimidating. Working together boosts everyone’s confidence.
WORKING EFFICIENTLY AND RETAINING KEY PEOPLE ARE PRIMARY GROWTH OBSTACLES
Next, we wanted to take a look at the unique art of managing at the intersection of business development and client service. For mid-sized firms, it’s a fine balance allocating resources to marketing and business development while also providing clients with stellar service.
Managing client work efficiently topped the list, with 26% saying it’s their number one challenge. And in second and third place? Attracting and retaining either “talented client delivery leads” to manage the work or “talented consultants” to deliver on the work.
The data show firm leaders largely perceive that their delivery teams value the need to create time and space for marketing and business development, with only 14% of respondents ranking it as their primary challenge.
Likewise, firm leaders feel confident in their organizations’ ability to effectively collaborate between sales and marketing, with only 15% ranking it as their top challenge. Reinforcing that firms feel confident in their ability to collaborate and work together.
I believe this data set highlights that the managers guiding client relationships are harder to come by (and keep) than the teams executing project work. Even though the gap is slim, it reinforces that client service talent is in especially high demand.
Lastly, operational efficiency ranked high as a hurdle. This tells us that many firms believe they still have room to optimize workflows, improve resource allocation, and accelerate overall operational performance.
IN SUMMARY
Lead generation has never been easy, but if it seems harder than ever, you aren’t alone. Quality leads are harder to come by because there is more noise in the system, tougher competition, and higher stakes. To fill your pipeline with ideal clients you’re primed to serve, your lead gen program must be strategically focused, led by a strong engine of thought leadership, and well connected to your firm’s expertise.
Over the next few weeks, we’ll unpack our research findings further. We’ll feature articles on:
- How the most effective firms overcome these challenges.
- Characteristics of the fastest growing firms.
ABOUT THE RESEARCH
This research of 269, U.S. based consulting firms was fielded online between 7/24/23 – 7/27/23. Respondents consisted of a relatively equal mix of CEOs, firm, practice, business development, and marketing leaders. Firms ranged in revenue from $5M to over $100M. And, primarily included a mix of IT services, strategy, operations, and HR consulting firms.
For more comparative information, check out last year’s survey results and takeaways.
