I don’t know about you, but it kind of bugs me when I call or email my attorney regarding a quick question and end up with a bill for a quarter of an hour. Attorneys are infamous for their hourly fees, but should consultants and coaches do the same and charge by the hour? Is that the way to make more money?
When I spoke at the ICF Coaching Federation a few years ago and shared my strategies to move away from hourly fees, the audience looked at me like I was crazy. They had asked me to speak because they wanted to know how I earn revenues in the multi-six figure range, but they were surprised by my answer – move away from hourly fees!
Granted, if you’re new to the industry you may need to charge an hourly fee as you practice your craft and get your timing down. But if you consider yourself an intermediate or advanced consultant or coach, it’s time to take away those “time limiting” factors.
Benefits of Charging High-Value Based Fees for You and Your Client
- You get paid higher lucrative fees for the consulting or coaching engagement.
- You don’t resent your clients when they reach out for another session. You actually enjoy being of service!
- You stop trying to have a crystal ball. 90% of the time, even as a seasoned consultant, you have no idea how many hours it will take for the client to achieve their objectives. It’s stressful coming up with a number and unnecessary. Why put a time-limiting number on your larger projects?
- Your client doesn’t have to scramble to find more money to consult with you in another session.
- Your client doesn’t feel like you are money hungry and running the time-clock to nickel and dime them one more time. They love knowing they can stick to a budget!
- Your client feels like you are there for them when they need an emergency lifeline session. This keeps your project moving forward as being proactive vs. the hourly mentality of being reactive when there’s a problem.
3 Keys to Move into Value-Based Project Fees to Make More Money
Key #1 – Stop placing specific time-limiting restrictions (like # of sessions, how long sessions will last) in your signature programs or corporate proposals.
You aren’t paid like a trained seal performing at SeaWorld for an hour! Yes, you will need to provide some structure once you get into the engagement but stop looking into the crystal ball to make that prediction before you even start. From your years of experience, you’ll have a baseline in your head but don’t communicate that to your prospects/clients. What do you say when they ask you how many times will you be on-site, or how many sessions will it take or what’s the duration of our sessions? You say, “I can’t give you a precise number right now as every client is different.”
This key led to amazing opportunities for me. Years ago, when I started ramping up my business with more corporate clients and high-level leaders, I stopped putting these “time-limiting” factors into my proposals. Today when giving a workshop, coaching a senior executive client or working on a consulting project, I focus on the value I’m providing. Let them know, right from the beginning, that you will spend the necessary time to ensure they achieve their objectives. Who can argue with that?
Key #2 – Link your price to their results.
Bigger outcomes and bolder results should come at a higher price tag. When it comes to pricing you need to figure out both short-term and long-term results. The short-term results are usually a little easier to identify because the client has articulated them to you, but take the time to think through what these desired results are worth to the client.
Also, consider the momentum that will be built by achieving those results. Take into consideration that everyone needs traction before they can learn how to take on more difficult challenges. What longer-term results and bolder outcomes will you help them achieve, leading them closer to big futurist goals? What’s that worth in terms of value to them? Trust me – your value is never determined by a clock running, but how your insights and perspectives are helping your clients achieve bigger and bolder results.
Key #3 – Believe and articulate the value to your clients.
It’s one thing to say I’m going to start charging value-based fees, but it requires a mindset shift to sell it! From experience, I’ve seen how you have to level-up your mindset to say to yourself, “I’m worth it! I’m going to stop the hourly clock mentality and start educating my clients about value.” As an advanced consultant, you need to be confident that you can help your clients obtain their expected outcomes and set them up to achieve bigger futurist goals.
But talk is cheap unless you can convince people that you are the real deal. This is where many consultants fail because they are not articulating why these value-based project fees are in the client’s best interest. I’ve found that in order to articulate this value and convert more clients, you have to master how to frame your language with emotional phrases, overcome objections gracefully and have the courage to boldly convince your prospects that you can help them in a multitude of ways.
If you’ve been running your business using the paid-by-the-hour model for years, transitioning into value-based fees may seem like a big leap for you. But the benefits for both you and your clients make it worth stretching outside of your comfort zone. Ask yourself the following questions to gain insight into what needs to change.
Sarah’s Predictable Results Insights
- What’s holding you back from charging value-based project fees?
- Can you articulate both the short-term and long-term value you provide clients?
- Do you need to learn how to confidently present your fees using bold, powerful language?
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