In this economy, the concept of “VALUE” is in, anything seen as “COST” is out. More than ever, showing the value and benefits for the work you provide, will help you set higher client fees and save your business.
Setting client fees, that represent a fair and justifiable reward for the value you achieve as a consultant on a client assignment, remains one of the most awkward and sensitive issues for independent consultants and professional service firms all over the world. Furthermore, more than 80 percent of consultants and professionals – lawyers, accountants, engineers, dentists – undercharge for the value they contribute on client projects.
Whether you like it or not the traditional professional is more a consultant that s/he appreciates IF they are to achieve the better fees and exceed the expectations of their clients.
As a professional consultant, your primary objective with regard to fees is to achieve value-based billing based on the ‘worth’ of the talent you deliver. Your ability to demonstrate to your client that the high fees you charge are a drop in the ocean compared to the added-value results you help achieve for them is the core of this challenge.
This may be the real blockage point … that is, the ability to communicate the value proposition rather than the technical knowledge imparted.
Appropriate-to-the-result-achieved fee setting is both psychological and operational, and falls into the realm of art and science. It truly is hand, head, heart and soul consulting. It requires clarity of thought and a deep appreciation of your own offering and talent as well as an operational knowledge about the business of consulting and business acumen in general.
Your objective is to show that your consulting contribution will make or save five, 10, 20 times your cost to the client. Nowhere does consulting embody the spirit of entrepreneurship more than at this point.
‘Back from the result’ thinking means that you bring absolute clarity and focus to the outcomes reached. Your uniqueness has a worth and is worthy of a reward commensurate with the value delivered. You may be only one percent different from another consultant. That’s enough!
In summary, be sure to dollarize the impact of the problems, issues and opportunities that you and the client have discussed. Connect your expertise and background with the solutions you will provide in demonstrating that your fees are based on a ROI basis of between 7 to 20 times their investment in you, and that you will help them reach those ROI’s making them happy to invest.
In leading up to any presentation of fees, as part of your discussions, you need to insure you have developed the peer level respect with the CEO or decision maker necessary to charge the higher fees. If you can demonstrate that you and your portfolio of solution systems is an investment with a high rate of return, then you should eliminate or remove the resistance to move forward.