To reduce operating costs, we have trimmed our consulting offerings to just one high margin service. Should we keep just this one, which seems to be in demand, or build more?
Risk and opportunity are the first things that come to mind. Specifically, the risk of a single product and the lost opportunity of such a limited set of offerings. Let's discuss risk first. Your one offering may be in demand now but the market may change and reduce demand, another competitor might offer the same or a substitute product, or you might lose the people or control of an technologies for information components of your service. Without a robust service offering, you put your company at risk.
A one product company loses opportunity. First of all, you become known for that product rather than your suite of possible services. Eventually, prospects don't think of you offering anything else. Second, by not having a route for people to buy lower cost or more commoditized products, few people will place the trust in you to even try your product. You may like all clients to arrive at the high margin, high value service but, by reducing a choice of what types of your services to use, you are making it hard for them to buy.Tip:
Consider the value of a portfolio of services. First, provide a few low cost or free white papers, tips (like these), or blog of relevant topics. Next offer some modest cost, commodity-based, easy to use, short term services, such as workshops, seminars, assessments or one-day consultations. Then offer a suite of medium-term services, perhaps through partnering with subject matter experts, to broaden the appeal and value of services across a client's enterprise. Finally, offer some high value, high margin, and high touch services at the executive level. This portfolio approach allows a user of consulting services to enter your desired path to high value services at any point, and move up the pipeline to the point where they find value/cost equilibrium. This will lower your risk, increase opportunities and provide valuable market data on what service offerings you need to expand.© 2009 Institute of Management Consultants USA