Revenue Mix for a Consulting Firm

When you’re leading a Professional Services firm, pay attention to the mix of revenues from the mix of your services:

Pass Through Services vs Direct Services vs Productized services (IP).

  • Pass through as in you’re tacking on a margin when selling someone else’s services.
  • Direct Services when you deliver your solutions
  • IP representing the repackaging of what you’ve learnt and delivered at one customer to others for solving a similar problem

The margins are increasingly attractive as you move across from pass through to IP. The relationships may arguably be strongest when you’re delivering your direct services reliably over a period of time.

What the ideal mix is for your firm depends on your strategy and the unique demands of the clients you serve. Decide on it, dashboard it and manage to it.

Ramana Metlapalli
Ramana Metlapalli
Ramana is a Managing Principal at Varasi. Ramana is a lifelong learner and eternally curious about what goes into making some individuals and organizations, high performance ones. He writes about Business Analysis, Salesforce best practices and the world of Consulting.