How to Establish Value in Your Consulting Fees

Would earning 100%, 200% even 300% more than you are now with your consulting fees be of interest?

If you’d like to learn how to increase your fees so you can make more with every project that you take on and spend potentially less time on each project this will be relevant for you.

In today’s article I’m going to explain how to establish value for your consulting fees.

Why Value?

If you’re not basing your fees on value or ROI you’re leaving significant money on the table. Put simply, hourly fees and daily rates compensate you for your time, not your value or contribution to the project.

Most buyers of consulting services are more than happy to invest at a 5-10X ROI.

If you spend 20 hours on a project at $300/hr you’d earn $6000.

There’s nothing wrong with that number, except, what if the work you did for that client helped them to directly increase their sales by $400,000.

Would that be equitable compensation? If you feel it is, you’re certainly leaving a lot of money on the table!

Most buyers of consulting services are more than happy to invest at a 5-10X ROI.

That means if you helped them realize a $400,000 gain your compensation could range from $40,000 to $80,000.

You tell me, $6k or $40k-$80k – which would you prefer?

And what if it only took you 15 hours to get them that result? It may take more or less, but in almost all cases you’ll earn significantly more by basing your fees on value.

There are two types of value to consider with all projects. When you understand what they are and how to identify them you can often earn even more than the example I shared above. You can do this through discovering additional value and communicating it to the buyer.

Tangible

Tangible value is easy to spot. It can include:

• An increase in top line revenue
• Growth in profits
• Improvement in efficiency
• Reduction in costs
• Reduction in time spent
• Improvement in satisfaction levels or surveys

Tangible value can be measured and typically has a $ sign or % mark attached to it.

Intangible

Intangible value is the area that most consultants get tripped up on. They feel it is elusive and hard to spot. That doesn’t have to be the case when you know what to look for.

Intangible value can include:

• How something impacts someone’s stress level
• Helping them to get a promotion or raise their status in the organization
• Improve their health, wealth, family situation
• Realize an accomplishment and reach an important goal
• Creating a better reputation

I recently spoke with one client who felt unclear about communicating the intangible side of their fees. In our conversation it became clear that “reputation” was very important to this buyer.

“Why is it so important to them?” I asked.

“Because they want to be seen as world-class.” my client responded.

I continued peeling back some layers and said, “Great, and why do they want to be world-class?”

“Well, it will help them to attract more visibility and get more tourism and direct investment.”

Now we were making progress. “So their reputation is important to them because they want to be seen as world-class and that will allow them to attract more tourism to their country and increase their foreign direct investment, right?”

When you ask enough questions and dig deep you can uncover tangible value from what on the surface appears only to be intangible value.

“That’s right” my client said.

We went on to talk about the measurable value of tourism and direct investment for the buyer.

When you ask enough questions and dig deep you can uncover tangible value from what on the surface appears only to be intangible value.

Focus on the Conversation

The best way to identify both intangible and tangible value is to have a deep and meaningful conversation with the decision maker (aka. the buyer).

There is no replacement for this.

No shortcut.

If you skip or try to cut the conversation short without having a proper conversation you will leave money on the table 99% of the time.

That’s because to identify value and ROI you must take the time to ask the right questions.

Asking the Right Questions

The most important skill you can have as a consultant when you want to increase your fees and earn more with every project that you take on is to know how to ask great questions.

I’ve written more extensively about how to ask great consulting questions before. Here are some examples for you:

• “What is your number one priority for this business unit during this fiscal year?”
• “What do you believe needs to be strengthened in order to support achieving this?”
• “What do you think the main challenge is?”
• “What is working well?”
• “What is working well?”
• “What is the worst thing that can happen?”
• “What is the best thing that can happen?”
• “Why is that important to you?”
• “What is the value of this to you (your company)?”

I teach my clients a formula and provide them with a script that takes them from start to finish and guides them through having a meaningful conversation with a buyer of consulting services by asking the right questions.

It sets them apart and allows them to earn significantly more with every project they take on.

Here are a couple of examples to show you the possibility and the opportunity for transformation when you make this shift.

Ready to Earn Higher Fees?

If you’d like help to communicate greater value so you can earn higher fees consider applying for the Accelerator Coaching Program. In this program I personally work with clients to help them attract more high-value buyers, increase their fees and win more business.

Want feedback on a proposal? I’ll personally review it for you. Want help to ensure your marketing materials are up to par? We’ll get you that feedback. We do all that and a lot more for clients in the Accelerator Coaching Program. You can schedule a free 1-on-1 Planning Session to learn more about the program. Start by applying here

How to Establish Value in Your Consulting Fees is a post from: Consulting Success

from Consulting Success http://ift.tt/2ox7Q95