Don't Hire Consultants to Help You Grow. Just Answer These 3 Questions Instead

I meet lots of entrepreneurs through my book, articles, and keynote speeches at conferences. I’ve noticed a common theme: We all want to grow, but face challenges and need help, but we’re strapped for cash and can’t spend millions on consulting and advisory.

Even if you do have the money, context is king when it comes to hiring consultants.

Larger consulting firms function like teaching hospitals. You pick a famous teaching hospital because of its reputation and you are worried about a symptom you have. You meet with and are impressed by the chief of surgery, so you choose the teaching hospital, only to wake up and discover first year residents and medical students did your procedure.

It’s hard to avoid unless you are personal friends with the senior partner or you have significant enough value as a client to get an ‘A-team’.

Absent that, the best way to use consultants is be crystal clear on what specific question you want answered. This way you know precisely what you are getting and which consultant has the right expertise.

When it comes to growth strategy, don’t pay someone to answer the question of how to grow. Here are three tried and true questions to help:

1. What needs to be true to double your price?

Raising your prices is truest test of whether your startup is relevant and differentiated. If people want what you have to offer and they have no other choice, then you can easily raise your price.

The new $ 1,000 iPhone is a great example of this. Is the phone better than the latest Samsung Galaxy? Some say not. But the total experience and ecosystem remains superior, so they can raise their prices.

Coffee is full of great examples, where coffee has gone from $ 0.05 per cup with instant coffee, to $ 0.50 per cup via Keurig, to $ 2-5 per cup via Starbucks and even $ 20 per cup via third-wave coffee providers like Verve.

I’m not saying you should double your price. My point here is: What can you do to improve the brand, benefits, experiencing or the price/value equation so that your prices could actually double?

2. What needs to be true to double usage of your category?

Often times this can also be product innovation. Let’s go back to coffee. For as much as we as Americans love coffee, per capita consumption of coffee has been cut in half over the last several decades and flat for the last ten years.

How is that possible given we all spend so much on coffee? Coffee has given way to coffee drinks, where milk and dairy make up far more of the volume than not. Lattes, Frappucinos and cold brew have created new occasions and new use cases for ‘coffee drinks’ to grow the category.

This is also about business model innovation, specifically distribution innovation. Our total video consumption exceeds 40 years per week, per Nielsen, meaning all Americans have a second job of consuming video. How has this happened? Distribution innovation via Netflix and other streaming providers.

3. What needs to be true to convert non-users into the category?

I call this the “Green Eggs and Ham” problem. The true challenge of growth strategy is convincing someone who won’t eat green eggs and ham to actually try and like it.

This requires both product and business model innovation, which I call category creation. The easiest place to start is to find a category that has pent up demand, such that you’re not really competing against traditional competitors like you are with inertia and non-action.

Charlie Williams, founder of Insideoutcounsel, is a great example of this. He’s a lawyer by training, and realized that a lot of small businesses need legal services–but often go without given the scariness of lawyers.

Legal concerns can evoke scary images for small business owners as it is, but the industry standard bill by the hour pricing model makes people clam up and avoid talking to lawyers. His startup competes with inaction, by flipping the pricing model on its head. He charges a fixed fee to get 30 days worth of ‘all you can eat’ legal counsel from experienced lawyers who are vetted and focused on you, unlike other services which are just referrals.

It’s a great way to grow the category–and re-invent it via pricing strategies.

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