Set Fees Based in Value, Not Time Spent

Consider establishing fees based on value of the services you will provide and not on the time you spend on the project. Clients will judge the wisdom of your services based on their own agenda. They want to know if your services will help solve a problem, or if using your services will benefit them equal to or more than the cost of your services. Your fees must reflect value to the client.

You must be willing to estimate the total time needed to get the job done when you are quoting fee on a time and materials basis. Just telling the client you charge $200 an hour plus expenses is not always sufficient. Howard Shenson recommends you let the client know the number of hours you will take to produce the desired results. To properly estimate requires careful analysis and attention to details, says the late Shenson, the consultant’s consultant.

Dr. Darryl

L. Darryl Armstrong

ARMSTRONG and Associates

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Charge for Travel Using a Per-Diem Basis

You may want to consider charging a per diem for your travel expenses (hotels, meals and incidentals) rather than direct reibursement. Most clients prefer the simplicity of per-diem expenses and this arrangement avoids any criticism about how you spend expense dollars.

Think about having multiple per-diem rates, the late Howard Shenson, the consultant’s consultant suggests. You would have one per-diem for expensive cities and another for smaller markets. Set per-diem rates and define the quality of your life on the road in a way that is consistent with the style and expense that your client feels is appropriate. People are more comfortable when you do things the way they do them.

Dr. Darryl

L. Darryl Armstrong

ARMSTRONG and Associates

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Get something back when you giveaway a “freebie”

So now you are a successful consultant!

As a professional in the field of consulting, you will be frequently asked to give your clients “little favors” and since you can rarely collect a fee for them, the best term we can use is that these are “freebies.”

These “freebies” can include everything from answering a quick question by telephone to sending them copies of articles and documents. The list can be quite endless.

 However, these free services can be turned into a profit center for you with the “one-minute commercial.”

Here’s the secret.

When asked for a “freebie” or a favor, quickly respond with one of these answers:

• “I will be glad to take care of that for you … if you will make a deal.”
• “I’ll help if you make an agreement with me.”
• “It’s free, no problem … but there is a catch.”
• “Sure, I can help … but you must make me a promise.”

So, what is the deal? What is the Catch? What is the promise?

Well, it’s simple really … They simply promise, agree or make a deal to call you first when they need the services you provide. Add some spice to your one-minute commercial by also getting them to promise or agree to recommend you to others or to provide you a testimonial (which you can offer to draft for them).

This one-minute commercial can be fun for you both, and is a powerful sales tool for your firm.

However, we recommend you use this technique only when you have done something for free or extra for a prospect or client.

Dr. Darryl

L. Darryl Armstrong

ARMSTRONG and Associates

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Don’t nickel and dime your clients

Don’t quote fees or invoice for services in any way that will communicate that you are petty or not delivering solid benefits for the services you provide.

Almost all clients would prefer to pay a little more per hour or per day than to be burdened with small charges for support services, activities, or costs that they feel should be included in the already high fee they are paying.

A feeling that fees are reasonable and predictable and that invoices are not filled with “nickel and dime penny ante stuff” will encourage referrals and future business with your client.

Until next time.

Dr. Darryl

L. Darryl Armstrong

ARMSTRONG and Associates

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