Did you short change yourself?

Did you short change yourself?

Many consultancy owners price work using a time-and-effort model. It’s simple, but is it fair? What if fees were based on the client's desired result instead?

Here's a scenario.

A client is stuck with a problem.

They've had it for three years. Three departments that should have worked together to fix it are now at war. You're invited to mediate a 3-hour workshop to clear the air and find a way forward.

Turn up ... use your skills ... what is a fair price for that?

Say your normal fee is £150 an hour (£1,125 a day). Perhaps you decide to charge that, or maybe £500 an hour (£3,750 a day), or £1,000 an hour (£7,500 a day), or even £1,500 an hour (£11,250 a day).

Let's assume you go for £1,500 an hour, then add another £500 for expenses.

You ask for a fixed price of £5,000 for the workshop. The client immediately agrees. You're pretty chuffed with that fee. After all you're normally on £150 an hour, right?

Now imagine you mediate the meeting.

It's challenging but you unstick the issue. The participants get a different perspective. They decide on a solution. The whole group commits to get executive approval.

Good job!

Later you hear the issue got resolved. And you also learn it was a half-million pound a year problem, with no resolution in sight ... until you worked your magic.

Do you still think £5,000 was a reasonable fee? That's a 100:1 return for the client.

Doesn't £25,000 look more appropriate? That's still a 20:1 return on the client's first years saving.

Fees are all a matter of perspective.