Why Are The Top Management Consultancies So Expensive?
Top management consultancies are described using a lot of adjectives, but ‘cost-effective’, ‘cheap’, or ‘affordable’ aren’t really one of them.
A lot of candidates work really hard to join these firms as consultants, and a lot of clients spend really hard to hire these consultants. Candidates get attracted to the big brand names and fat paychecks of these consultancies. Not to mention the ‘badge of honor’ that comes along.
So, what makes these consulting firms so expensive? Why are businesses ready to pay top dollar to get someone’s advice? And is there a way to access top talent without spending a fortune?
We’ll find the answers to all these questions in this article.
A Brief History of Top Management Consulting Firms
The idea of companies paying another company just for advice was unheard of until the 20th century. Sure, even kings and generals in the past have relied upon expert advice. But the whole process was not as organized or commercialized as it became in 1926 when James McKinsey, an accounting professor, founded McKinsey & Company. In the next couple of decades, McKinsey & Company grew substantially.
And what happens when a business grows? You guessed it right—competitors emerge and take some share of the market. In the last few decades of the 20th century, Boston Consulting Group and Bain & Co. made some serious noise in the market with their unique products and services. BCG, for example, came up with the growth-share matrix (also known as the Boston Box, BCG Matrix, and a few other names that have BCG’s brand name in it). It was basically a chart the company’s founder, Bruce Henderson, created that helped businesses understand their product lines better. He also came up with the famous term ‘cash cows’, which a lot of businesses have started using these days.
Then Bain & Company came up with their own thing to set themselves apart from McKinsey and BCG. They decided to onboard only one client from any given industry, making their services extremely scarce. As we all know, scarcity increases the value of a product or service. Bain & Co. played it really well by onboarding only a handful of selected clients and building long-term relationships with them.
As the years passed, the revenue of all these companies kept growing and the term ‘consulting firms’ became more and more popular. The market had accepted these companies and there was no turning back. Now, businesses who were struggling with some problems had access to the best management consultants. Please note that during this time, there were hardly any freelance consultant platforms, but we’ll get back to them later in this article.
Big Clients and Big Expenses
In the book The 22 Immutable Laws of Marketing by Al Ries and Jack Trout, the very first law itself is this: Law 1: It’s better to be first than it is to be better.
This applies to the consulting industry as well. If new consulting firms are dreaming of becoming the next BCG or McKinsey, then they might be heading for total disappointment. The Big Three have been in the business for decades and have a reputation for charging insanely high rates. But in return, these firms also offer a high salary to their employees and can book first-class air tickets and 5-star hotels for them. Also, they have big advertising budgets and big offices all around the world.
When a consultant from these big firms visits a client’s company for the first meeting, the decision-makers would expect (and are prepared) to pay a hefty fee. So who are these decision-makers? Well, usually representatives of giant corporations or large businesses. In short, the companies who can afford to pay a large amount of money to hire the best management consultants.
So, is there a way for small to medium-sized businesses to hire top consultants? The answer to that question is a resounding yes! Let’s understand how you can hire the best consultants using a freelance consultant platform (also simply known as ‘consulting platform’).
How to Hire Top Consultants Without Approaching the Top Consultancies
Oftentimes, business owners judge a consultant’s competency by the brand name associated with them. This is why they don’t realize that there’s an option to approach freelance consultant platforms and hire freelance management consultants. The process is very similar to hiring an employee through a recruitment agency. A freelance consultant’s background check and initial interviews are conducted by the consulting platform itself. The only thing that you need to do is state your requirements to the freelance consultant platform’s representative, and they’ll find you a consultant that is best suited for your situation.
The big consulting firms have produced great results and have also offered employment to thousands of people around the world. But there are a lot of freelance consultants who don’t work for these big companies and have still produced exceptional results. If small to medium-sized businesses want to access top consulting talent, they can easily do so by visiting a freelance consulting platforms and stating their business needs. The consulting platform can then select the top candidates from their talent pool and connect them with the business. If you are ready to think outside the box, your freelance consultant (AKA the problem solver) might only be a few clicks away.