Independent consultants who dare to invest in marketing and sales efforts are likely to earn larger salaries, according to a new study. More than 50% of consultants who invest $5,000-$25,000 in their marketing are making more than $150,000 per year.
The UK’s gig economy has continued to boom well into 2018, with the country now playing home to an estimated 5 million self-employed people. The professional services sector is a major driver of growth in this area in particular, with the number of freelance workers in Britain having reached 2 million since 2001.
Over the past three years, this burgeoning portion of the consulting industry has been the subject of a growing body of research. One finding that has remained consistent among studies is that independent consultants are typically happier with their career than traditionally employed individuals. In 2016, one such study by Eden McCallum – a consulting firm which delivers projects with independent consultants – found that only 5% of independent consultants were dissatisfied with their career choice.
This has seen individuals continue to flock to the market, lured by the promise of a better pay and a more fulfilling life. The problem is that, in an over-crowded market, freelancers are now finding it harder to get themselves noticed. According to a new survey from Consulting Success, the key to surviving and thriving in the independent consulting market is the confidence to invest in marketing.
Thirty percent of survey respondents (spanning the Americas, Europe, Africa and Asia) were management consultants, 16% were strategy consultants, 13% were marketing consultants, 7% were operations consultants, and 4% were financial advisory consultants. The findings back up the idea that while marketing and sales are a challenge for freelancers – only 17% of consultants claim they don’t struggle with either – they pay for themselves in the end.
According to the report, a key issue for independent consultants is that they do not spend enough time on the marketing or sales process of their labour. Over a third of consultants polled said they market their business weekly, while 11% of consultants market their business monthly. Surprisingly, 14% of consultants market their business only when they need a new client, while 6% don’t market their business at all. This puts them at a significant disadvantage to the 33% of consultants who market their business daily.
Consultants who market their business daily do not rely on referrals nearly as much; and the more regularly an independent markets their services, the less likely they are to struggle with it. Thirty-nine percent of consultants who don’t struggle with marketing are those marketing their business daily, according to the report.
Following on from this, consultants are also reluctant to invest heavily in marketing, despite the research finding the adage “you have to spend money to make money” still holds true. While those who do invest tend to have higher incomes, 40% invest less than $1000 in their marketing each year. At the same time, 38% invest $1000-$5000, while only a fifth invest $5000+.
Low on agenda
According to Michael Zipursky, founder of Consulting Success, “Marketing is not an expense – it’s an investment. Marketing’s job is to generate conversations with prospective buyers so you can get more clients and make more money.”
However, marketing is still not top of agenda. This is partially because consultants rely heavily on pre-existing networks: over 55% of consultants get 60% of their new business from referrals.
At the same time, while research shows that the highest-earning consultants tend to invest more in their marketing – over 50% of consultants who invest $5,000-$25,000 in their marketing are making more than $150,000 per year and 30% of these make over $300,000 per year – there is no hard evidence that this is a direct correlation. However, the main finding from Consulting Success does mirror similar results that have been found for consulting firms, including a study from Hinge Marketing, suggesting there is likely a link.
Zipursky argued that Consulting Success’ research shows the same applies for independent consultants, stating, “When you invest in your marketing – the right way – you should see a return on your investment. The more you market your business, the less likely you are to struggle with new business and leads.”