Skill 3: Business Acumen

Consulting Skills

In today’s article in our blog series on Consulting Skills, we will introduce you to the third level, the Business Acumen. It’s about how to sharpen your own business sense in order to align your business for long-term success. 

3. Business Acumen

In order to be successful as a consultant, you need a sharp business sense, also called Business Acumen, which examines all relevant aspects of the mechanisms of the business model (profit and loss statement). Through critical reflection, it is possible to evaluate how the business model works and which screws / mechanisms can increase sales, reduce costs and increase profits.

What do we mean by Business Acumen?

As consultants, we understand the ability to take each business model apart, question it and find areas for optimisation. This sounds relatively complicated, but it is not. 

Let’s take the practical example – your girlfriend is the proud owner of a café and wants to increase her profit to sell the café in 10 years and settle down in Provence. In such a case you have to calculate how she can increase her profit. This starts with: 

1. Definition of the market – how big is your maximum capacity of turnover at the moment and how can it be increased?

a) Define parameters: Try to determine the parameters that define the market. In this case: what is the maximum capacity (number of tables), how many times a day someone eats (number of meals) and through which channels can be ordered / sold (direct visit vs. online)? In this case you write down the following parameters:

b) Define assumptions: Define assumptions for each parameter and if you are talking to your girlfriend, make these assumptions together. Example: 

     I. Number of tables: 10 tables x 3 people (maximum)

    II. Average length of stay (seat occupancy): 30 minutes

   III. Number of meals per day: Lunch only max. 3 shifts

   IV. Online orders per day: approx. 30

c) Calculate the market: With the assumptions made, you can now calculate the market (capacity). This means no turnover yet – the turnover is calculated with the average shopping cart. 

Based on the current market, you can consider which measures can be used to expand the market. For example by adding more tables, a terrace, etc.

2. Average shopping basket: In the next step you check the average shopping basket value. This means what a guest eats or drinks on average. A simple glance at the menu is enough to evaluate the price level. If you multiply the maximum number of orders per day by the shopping basket value, you have the maximum turnover. However, this does not mean that this turnover is achieved accordingly.

3. Frequency: Now you evaluate the frequency – how often does a customer need / want to have lunch. How loyal are the customers (existing customers vs. new customers). In the example of the café this is a simple calculation: You can say that the opening hours correspond to the frequency.

ESTIMATION OF COSTS:

4. Marketing & distribution costs: Now you estimate how much has to be invested to make customers aware of the café and want to visit it. Normally, marketing / sales costs should not exceed 20% of turnover.

5. Production costs: Now you should think about how much it costs to produce a lunch on average. Here you can add up the cost of procurement (purchase and rent) and the cost of production (wages of staff who cook and serve). With the size of the market / capacity you can now calculate the production costs

CALCULATION OF THE GROSS MARGIN:

6. Gross margin 1: Now you can calculate the turnover (market x shopping cart value x frequency) minus costs (marketing costs and production costs).

Why is Business Acumen important for a consultant?

For your friend who owns a café it would be useful to make a simple assessment. Let’s assume that for her a gross margin 1 of 100k€ would result, then after taxes this would be about 70k€. The question would be, if in 10 years 700k€ turnover would be enough for her.

Every consultant is therefore expected to show potential ways of increasing the contribution margin. Important set screws are here:

  • Market: Increasing sales channels or capacity
  • Shopping cart: Increase prices or cross sales offer 
  • Frequency: Introduction of loyalty programs or increase in accessibility
  • Reducing marketing costs: Improving the marketing mix and reducing wastage (addressing target groups appropriately)
  • Reduce manufacturing costs: increase purchasing potential automate processes, optimise wages

The quintessence is about the improvement / increase of profit. In the longer term, of course, one must also ask oneself the question, does a “The winner gets all” principle make how a few large Unicorns from Silicon Valley are really target-oriented for our society, or not. But an improvement in profit is also an improvement for our society and tax revenue 😉

How can Business Acumen be trained?

To take your own business sense to the next level, you not only need to understand it yourself, but also to practice it continuously. You will find out how to do this below: 

Understanding: 

A: Develop your own Business Acumen Canvas (an example of ours)

B: Define your services among the improvements of the business model

C: Develop your own business sense for training and practice

Train: 

A: Business Acumen with Hypothesis

  • Weekly Business Acumen sessions (30 minutes), in which you present a new case each time 
  • Everyone will work on the case individually
  • The group will work on the case together

B: Business Acumen with real customers

  • All account managers will implement the business model with the customers
  • Missing information is requested at the next customer meeting

If you want to get to know more about us or about what we do and what we offer or if you have any questions on this topic or on our insights, please don’t hesitate to contact us at any time.

Furthermore, you can watch the video from our Community Call here: Video of the call. Moreover we have provided the slides of the call for you here.

Next week we will continue with the fourth part of the Consulting Skills: Meta Thinking & Structuring

Your Amaze Growth / Accelerate Coach Team

 

Skill 2: Consulting Mindset

Consulting Skills

In today’s article in our blog series on Consulting Skills, we will introduce you to the second step; the Consulting Mindset. This will help you to build a good foundation in order to prove yourself in your business environment.

2. Consulting Mindset

Being a consultant requires a particular mindset to drive business relationships forward.

What do we mean by a Consulting Mindset?

The Consulting Mindset is based on the following five virtues. These are among the most important soft skills in consulting and should therefore be deepened.

The five virtues

Know yourself: Being able to judge yourself and others in a situation is often decisive for the result. Therefore, ask your employees to do a strength test to find out their strengths. 

Listen actively: An effective way of working is to listen actively in order to be part of the conversation. Train your consultants to listen actively. Follow 4 simple steps: 

  1. Paraphrase: The sender’s message is summarized in your own words
  2. Verbalize: Emotions of the sender are verbalised and neutralised
  3. Enquire: Check all information collected and clarify any ambiguities
  4. Summarise: Things summarised in max. 3 aspects

Partner: The ability to work in a team is an essential skill you should possess, because you are in constant exchange with your customers and team colleagues to achieve your goal together. Learn to give and take, to be in sync, to move skillfully and to be in step and in harmony with others. 

Risk: As a consultant you should be able to assess risks but also be able to take them. Only those who think outside the box will recognize new possibilities and try to use them. Train the ability to tolerate ambiguity and exposure. 

Improvise: Adaptability is essential when things do not go as planned. You should be able to accept changes and to deal with them spontaneously. Therefore, train the ability to react quickly: Subordinate your ego for the sake of cooperation and give up looking good.

How can you promote and develop the consultant virtues?

Understand: 

  1. Redefine the “Consulting Mindset” for yourself
  2. Create your own “Consulting-Mindset” training
  3. Appoint one leader (ideally at the C or B level) to train the consultative mindset

Train: 

A: Individual reflection

  • Ask yourself / your colleagues to journal for 5-6 weeks about their consulting mindset
  • Exchange weekly about the consulting mindset experiences

B: Play the Consulting Mindset Reflection Game 

  • Install a frequent (e.g. once per month)  consulting reflection mindset, where you play cards to reflect about clients & situations together

If you want to get to know more about us or about what we do and what we offer or if you have any questions on this topic or on our insights, please don’t hesitate to contact us at any time.

Furthermore, you can watch the video from our Community Call here: Video of the call. Moreover we have provided the slides of the call for you here.

Next week we will continue with the third part of the Consulting Skills: Business Acumen

Your Amaze Growth / Accelerate Coach Team

 

Skill 1: Relationship Building

Skill 1: Relationship Building

In today’s article in our blog series on Consulting Skills, we will introduce you to the first skill; the right way to build customer relationships. This will help you to build a good foundation in order to prove yourself in your business environment.

1. Relationship Building

The first essential step in laying a foundation is to build customer relationships.

What do we mean by building customer relationships?

Building customer relationships goes hand in hand with the skill from being a “Trusted Advisor”, as well as trust. Therefore, this is one of our 6 values, what we stand for as a team and what we live by. Trust is essential to build a long-term and stable customer relationship.

How can you become a Trusted Advisor?

The Trust Quotient (according to Charles Green) can be very valuable for you to analyze and improve your current trust quotient.

Trust = (credibility + reliability + integrity) / customer orientation

To drive the individual elements of the formula forward, we have summarized our best practices for you below:

  • Credibility: Enhance your credibility through accuracy and reliability.
  • Reliability: Stand by your words and deliver what you promise.
  • Integrity: Strengthen your already gained trust through discretion.
  • Customer orientation: Put yourself in the position of your customers in order to better understand their problems / challenges.

In order to maintain the trust of your client, you should also understand the different personality styles. This helps you to make the right approach and communication in order to avoid possible misunderstandings.

Which 4 personality types are there?

Different personality types can be divided into 4 different colours (red, yellow, green, blue). In the following we have listed some characteristics that can be equated with the respective colours. 

How can this input be implemented?

We also asked us how can this be implemented in a  in a goal-oriented way so that you can build customer relationships for yourself and others?

There are 2 important approaches for successful implementation – understanding and training. 

Understand: 

  • Create your own training for Trusted Advisors
  • Create your own training for the social styles, e.g. supported with CrystalKnows
  • If needed, use an external coach to execute frequent external trainings

Train: 

A: Individual training

  • Ask every account owner to define social style for clients 
  • Ask every account owner to define current trust level with client (e.g. in CRM)

B: Group reflection 

  • Install a frequent platform (e.g. lunch or breakfast) where account owners read “a holiday postcard” to their clients in order to internalize the different addresses of different personality types
  • On the front of the postcard, the account owner is drawing the “Trust Grid”

If you want to get to know more about us or about what we do and what we offer or if you have any questions on this topic or on our insights, please don’t hesitate to contact us at any time.

Furthermore, you can watch the video from our Community Call here: Video of the call. Moreover we have provided the slides of the call for you here.

Next week we will continue with the second part of the Consulting Skills: Consulting Mindset

Your Amaze Growth / Accelerate Coach Team

 

Consulting Skills

Consulting Skills

The right consulting skills are becoming increasingly important these days. But which skills are really necessary to become a successful consultant?

In this blog series we introduce you step by step to the eight most important skills that are crucial for you as a consultant to prove yourself in your business environment.

Using our consulting pyramid, you can see the individual steps and how they are built upon each other. Each week we will explain you one part of the pyramid in more detail. 

What skills do you need to bring to your job as a consultant?

If you want to become or build-up consulting skills you need to have these 4 competences. These skills are build up through long-term potentiation. 

  • Understand the  theoretical input of consulting skills (e.g. through books, webinars, etc.)
  • Train with an expert and get valuable feedback
  • Apply consulting  skills and improve them with real client cases
  • Own it by training others how to consult and  improve the skills

Why do consulting skills need to be trained and build-up from leaders?

Consulting skills should be trained and developed by managers on a regular basis. This helps you to increase your effectiveness as a leader by helping others to develop and grow.

If you want to get to know more about us or about what we do and what we offer or if you have any questions on this topic or on our insights, please don’t hesitate to contact us at any time.

Furthermore, you can watch the video from our Community Call here: Video of the call. Moreover we have provided the slides of the call for you here.

Next week we will continue with the first part of the Consulting Skills: Relationship Building 

Your Amaze Growth / Accelerate Coach Team

Consultative Selling for Agencies

What is Consultative Selling?

Covid-19 and social distancing has become the new normal. Hence, it is even more significant to focus on a trusted sales approach and consultative selling in B2B sales cycles. We see professional service firms overcoming these difficult times by applying a stringent trusted advisor approach within their four stages of their sales cycles.

How does a typical sales cycle look like?

Nowadays there are two approaches to address prospects and thus gain leads: either an inbound or outbound sales approach. Depending on the number of potential customers, either an outbound (many potential customers / e.g. toothpaste) or inbound (few potential customers / e.g. airplanes) approach is taken.

With an inbound focus the consultative selling approach is essential to convert leads into customers. The following basic principles must be followed when using the approach in order to create the basis for successful lead generation:

  • Doing research homework
  • Ask questions
  • Active listening
  • Stay authentic
  • Ask for feedback
  • Build confidence

How can a consultative selling approach be implemented in your salesforce?

We have worked with many different professional services firms both agencies as well as consulting firms. After many training and coachings, we finally have developed a simple sales clock that helps the salesforce to implement basic trusted advisor skills /the consultative selling approach.

  1. Phase – Understanding: In this phase it is important that the sales person collects essential information about the potential customer. This includes information about the decision-makers and their personality profiles as well as the company itself. We have listed our favorite research tools here: LinkedIn, Xing, Crystalknows, Apollo.io, Google or even the company’s website.
    On the basis of your research list the potential challenges and problems of your lead and map your previous experiences or services. This allows you to get a broader picture of how to support your potential lead.
  2. Phase – Building trust: Your goal is to expand the collected data through a personal contact with the company. We have found that asking specific questions about e.g. the business health, the competitive environment of the company, current challenges, etc can be a real door opener. Furthermore, we highly recommend you to structure the problems on a meta level. According to our experience, a structured understanding as well as a synthesis of the problems increases trust of the potential customer.
  3. Phase – Define your value: In this phase, you should clearly evaluate the costs of the problems and especially the long-term added value of your services. According to our research, it is very important to tailor your services to the customer’s problems.
    Based on the above mentioned insights, you can now create your tailored offer. A best practice is to proactively follow up after the offer has been placed.
  4. Phase – Realise Value: After you have successfully sold your services to your customers, it is important to become a trusted advisor for your customer.

How can you become a trusted advisor?

The Trust Quotient (according to Charles Green) can be very valuable for you to analyze and improve your current trust quotient.

To drive the individual elements of the formula forward, we have summarized our best practices for you below:

  • Credibility: Enhance your credibility through accuracy and reliability.
  • Reliability: Stand by your words and deliver what you promise.
  • Integrity: Strengthen your already gained trust through discretion.
  • Customer orientation: Put yourself in the position of your customers in order to better understand their problems / challenges.

Furthermore, the following 5 virtues can help you to build up the trust level between you and your customer:

  1. Know yourself
  2. Listen
  3. Be a partner
  4. Don’t fear the risk
  5. Maintain flexibility and improvise if necessary

And of course, last but not least when it comes to an offer you should have also a good price logic in mind. We wish you the best of luck with the successful conversions of your coming leads.

If you want to get to know more about us or about what we do and what we offer, please don’t hesitate to contact us at any time.

Furthermore, we have provided the slides of the call four you here.

Below, you will find the video of the call.

Why good customer segmentation leads to more sales

How a good customer segmentation leads to more sales

We have coached more than 250 agencies on business scaling in the past 3 years. We have identified one best practice: to segment customers according to their growth potential not on their current monthly recurring revenue (MRR).

New for us is to additionally consider the maturity level of customers in their digital growth marketing funnel in order to realize a stronger customer development as well as up- and cross sales of the agency services.

How do I implement a customer segmentation effectively and efficiently?

Here is our simple DIY-approach, for a good customer segmentation. Just follow the steps and you will recognize great improvements from the first day. 

1. Define Signals that should be included in the customer segmentation

Different signals can be included in the customer segmentation, such as customer size, marketing budget size, customer growth rate (YoY), industry, collaboration, and so on. In addition to the traditional signals, we have also achieved good results with larger agencies in 2019, if we also define the nature of the marketing funnel. Therefore, we differentiated 3 large funnels: (1) Retail (2) Lead Gen and (3) Business & Industry Markets with all possible industries & business models.

2. Evaluate the degree of maturity of the marketing funnel for each customer

Today, traditional publisher channels such as Facebook, Google or LinkedIn can be applied in almost all stages of the Marketing Funnel (Reach, Act, Convert and Engage). The strategy of the advertiser is crucial in order to analyze how an ad format can be directed to which target group and to which goal. An agency can define its services per marketing funnel for both its operations and consulting services per funnel phase. The goal for customer segmentation should be to clearly define the maturity level of the current customer’s marketing funnel.

3. Define the customer segmentation matrix

When all signals have been defined, a smart BCG matrix should be introduced, according to which the cross- and upsell potential of the customer on the one hand, and the marketing/growth potential of the customer (Y-axis) on the other hand, can be seen.

4. Derivate the service levels per customer

It is certain that a service level should be fulfilled to 120%; no matter which segment the customer is currently located. However, it should be defined how much management attention will be provided to which customer in which segment. A customer with a lot of upsell potential should certainly receive quarterly business reviews and strategic annual meetings. A customer with less potential should probably receive fewer.

Where do I find more Informations about the implementation of a good customer segmentation?

We have provided you with the deck from the call, as well as a simple segmentation sheet in Google Sheets. We also provide a link to the video of the call here.

You are more than welcome to apply these tools to your agency. We are looking forward to your feedback, please write to us directly. Until the next call on the 27th of March 2020 when we will talk more about Dynamic Service Maps! Please, do not forget to register via Eventbrite! We are very excited!

If you want to get to know more about us or about what we do and what we offer, please don’t hesitate to contact us at any time.