Is Consulting Worth It?

My daughter is a junior in high school and in the process of investigating colleges.  In a parallel effort, I’m in the process of investigating how to maximize her ability to get scholarships and minimize our expected family contribution (EFC).

As part of my research, I’m finding that there is an entire industry category of consultants who are happy to share their knowledge and promise thousands of dollars in tuition savings to insure my daughter’s ability to get into her top school, all for a nominal up-front fee.

Is consulting worth it?

My initial tendency is to view these services as scams, preying on unsuspecting parents who are facing the daunting prospect of paying for their child’s college education, the cost of which could exceed the size of a mortgage.  I want to think any parent with normal intelligence can do the due-diligence and research to maximize their chances of acceptance and get an acceptable scholarship offer.

But there’s another side of me that wonders: What if this $3,000-4,000 investment in consulting actually resulted in, say, $2,000 savings per year over four years?  That $8,000 return justifies the cost.  There are some other potential gains.  These firms perform services such as completing the complex application forms and coaching services for essay preparation, interviewing skills and acceptance tests (ACT/SAT).  They could provide tips that can increase one’s chances of getting into their university of choice.

And it dawned on me that this is the business dilemma that my clients face whenever my firm proposes for our consulting services.  They wonder if the large fee that we hide at the end of our proposal will provide them with a benefit that exceeds the cost.

They also wonder if they could just do it themselves. Do they have the bandwidth and competency to forego the cost of consultants and save a lot of money in the process?  Or will the lack of expert opinion and experience cause them to miss out on big opportunities?

The classic “make-or-buy” decision.

The responsibility falls on the consultant to quantify how investing in the consultant’s services will reap bigger returns.  There are several ways to do this.

Experience

Demonstrate to the prospective client that your firm has done this before.  Perhaps you have performed similar marketing studies for other clients and you know the land mines – and how to avoid them – to get the study done faster and more accurately.  Showing some specific examples will help to convince them.

Specialized knowledge

It is certainly gained from experience, but knowledge can also be attained through extensive research.  If your firm has invested the time and has some broad knowledge on the topic, particularly if it involves complex laws or regulations, your client may realize how much they don’t know and recognize their need for outside help.

Core competency

Let’s say your client is an insurance company and needs a web site developed.  Web development is well outside of their core competency.  If your firm’s specialty is web development, you may be able to convince them that you can do it better and faster than them.  If you’ve developed web sites for other firms in their industry, that’s all the better.

Competitive advantage

You’re probably competing with other consulting firms who also have experience, knowledge and specialize in the skills in question.  If you can demonstrate to the client that your firm has MORE experience, knowledge and competency, you may be well on your way to a consulting sale.

See my related post: Why Would You Need a Consultant?

This is where quantification is important.  Providing specifics on when and where you’ve done the work will help your case.  Offering references and real dollar savings realized by your previous clients will ice the cake.

In the end, I ended up not using the services of the college scholarship consultants.  There is a lot of literature available and I’m willing to do my own research.  The firms I talked to didn’t convince me that they were worth their fee.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

I hope I can do better with my own clients.

As always, I welcome your comments and criticisms.