January 1, 2012
Hal Pomeranz, Deer Run Associates
The last two installments in this series of articles on consulting have focused on how to go about finding work. But one of the important questions every consultant should consider is who their target customer is. The answer to this question affects how you go about selling your services. For example, if you decide that providing services to the legal industry is the way you want to go, then you should look at writing articles for Bar Association journals and speaking at legal conferences. Also, when you get inquiries about possible consulting engagements, having a clear answer to the “Where do I want to be working?” question can help you decide which engagements are worth pursuing and which you should no bid.
However, the simple question of how to target your services has several facets that should all be considered. Let’s walk through the major ones.
What Are You Selling?
In the last installment I talked about picking an area of expertise. But even within that specialty there are sub-disciplines and specializations that you should consider when trying to determine the “sweet spot” for your perfect consulting engagement. For example, consider the field of Digital Forensics that I’m currently working in. Under that broad umbrella are people who do incident response, traditional hard drive forensics, media exploitation, mobile forensics, malware analysis, e-discovery, and other specialties. Having a clear focus on which area you prefer to work in allows you to more clearly articulate your marketing message. It will guide the sorts of publications and presentations you want to be known for and help you narrow down the 30 second “elevator pitch” you want to give to potential clients.
Which is not to say that you should only do work in a specific niche market. It pays to take on jobs outside of your comfort zone which can stretch your capabilities and force you to learn new skills. Expertise in a particular area will get you a job, but a broad base will allow you to have a long-term and prosperous consulting career.
What Level of Work?
The other aspect of homing in on your specific offering as a consultant is determining what level of work you are targeting. For example, when I first started out my practice doing general IT and InfoSec operations, there seemed to be essentially infinite amounts of work for basic day-to-day system and network administration. But I wanted to do more interesting/challenging “big” infrastructure level architecture and deployment work. There were many fewer of those jobs to be found, and actually landing them took more work.
You can visualize this as a pyramid. At the base of the pyramid is a large group of potential clients who need basic “block and tackle” type services. Since there’s little differentiation in service offerings and a larger pool of potential suppliers, rates are lower. But since there’s a large amount of available work, there’s less overhead for “downtime” between jobs. As you move up the pyramid the jobs get more interesting, and the number of people who can provide the service goes down, so billing rates go up. But the number of interesting, high bill rate jobs becomes smaller and smaller.
You’re trying to find the best spot that maximizes your billing rate while minimizing the time you spend looking for your next engagement. And, of course, which provides work that you’re interested in doing. There’s plenty of people making large amounts of money as PCI assessors, but that’s not work that I would personally ever want to do.
What Industry Do You Want To Work In?
Some people like the fast-paced, high-pressure Wall Street environment. Others like working with Law Enforcement. Some find the Federal Government a comfortable niche. The question of who you work for is intimately tied up with the services that you offer. Some consultants identify the industry they want to work for first– because a given sector may be perceived as more stable and/or have more money to spend– and then try to figure out what services to offer to that industry and how to sell them.
When you’re first starting out, it’s typically easiest to provide consulting services to the industry where you got your experience as a full-time employee. You will have a better “network” of contacts in that industry and be more familiar with the problems and needs of your potential clients.
But once you get your legs under you as a consultant, it may be worthwhile to investigate other industries and see whether you might find interesting work and higher billing rates elsewhere. Start inviting people in your target industry to lunch, and really listen to where their pain points are. Be frank about asking what service offerings you could provide that would most help them.
Where’s the Work?
Once you’ve identified and industry and a service offering to provide, it’s worth considering where the highest concentrations of that kind of work are located. Wanting to do IT infrastructure work for high-tech companies, I moved to the Silicon Valley which had the highest density of that kind of work available. This increased my pool of potential jobs and reduced the amount of overhead I needed to invest in travelling to my work site.
But it’s worth noting that, twelve years after moving to Silicon Valley, I ended up moving to a smaller community in Oregon for “quality of life” reasons. There are all kinds of criteria that go into the decision about where to live– family ties, cost of living, access to healthcare, recreation, etc. Consulting has always been a “lifestyle” business for me, so the demands of your business shouldn’t be the overriding factor in determining your location.
Of course, your location may limit the choices of available work and the industries you work in. Or you pursue the path that I have and spend a lot of time on the road travelling to various client sites. You may have to balance your desire to live in a particular location with the issue of having to spend most of your time going someplace else to find work.
Who Are You Selling To?
The next question is where to direct your sales pitch. Some services get sold to C-level staff in the Boardroom– audit, compliance, and data mining are examples. Technical services get sold to technicians and technical management at a lower level of the hierarchy. The higher up the food chain you go, the higher billing rates you can typically command, but the longer the sales cycle is going to be, meaning more overhead.
Different level sales require different language and presentation. Your target market also determines where you spend your time getting noticed. C-level execs read very different media and frequent different meeting venues from technical folks in the trenches.
Ultimately, this one often comes down to your comfort zone. I like being hands-on with technology and talking about technical topics with other like-minded people. So it’s most natural for me to sell specialized technical services to my peer group. But perhaps I might command a higher billing rate if I sold my services to their CEOs.
Short Term or Long Term?
Are you excited about taking on a lot of smaller, tactical jobs in rapid succession or tackling a bigger project with a longer time-frame? The one obvious advantage to longer-term engagements is that there’s less overhead involved in finding work and getting up to speed on your role. Plus you get a chance to do “bigger” projects and really get into watching the life-cycle and evolution of your work.
Or boredom could set in. Or you could find the technical skills you’re not using starting to atrophy. The nice thing about shorter-term contracts is you can really get a wide variety of marketable experience in a relatively short amount of time.
The type of work you’re doing may determine the length of a typical contract. For example, if you’re doing Incident Response work, there are no long-term engagements. You ride in, clean up the town, and then hand things over to the local sheriff. Unless you want to become the local sheriff, of course. But at that point you won’t be doing IR consulting anymore, you’ll be doing operational InfoSec work.
You Don’t Have To Have All The Answers!
The more you can think about these questions before starting your consulting practice, the less overhead you’ll tend to have looking for work. But you don’t have to have specific answers nailed down for each question. And you shouldn’t limit yourself when you’re first starting out anyway. Stumble around a little bit and try out different types of engagements.
But every year sit down and think about your past work history. What engagements were the most fun and interesting? Which were the most comfortable working environments? What was the most lucrative? Then think about the best engagements in the context of the questions discussed above and try to home in on the best kinds of work for you and the right industries, locations, and people to sell that work to.