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).
Okay. 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.
Something to consider. Please let me know your thoughts.