Читать книгу Value-Based Fees - Alan Weiss - Страница 23

I was at a speaking convention as one of the plenary speakers, and I was playing hooky until my speech the following day. I was at the pool with only one other person present, a woman I didn't know. I'm lousy at small talk, but her magazine blew away and I retrieved it. I asked if she was a speaker, since I couldn't think of anything else to say.

“No, my husband,” she said. “I come to the convention because he travels so much that this is a time I can be with him.”

But where was her husband? I looked into the pool to see if he had drowned. “He's in a workshop he didn't want to miss,” she continued, “but he'll be back for dinner.”

“How much does your husband travel?” I asked

“He presents 120 time a year, so he travels about 240 days.”

I was stunned at this. “May I ask how much he charges?”

“One thousand dollars a day, plus expenses.”

“May I offer you a suggestion?” I asked, but simply continued before she could answer, “If he doubled his fee he could travel only half as much and you'd have an even better lifestyle.”

She laughed. “Oh, he could never get that much,” his faithful wife responded.

This is the problem with charging for your presence and having poor self-esteem. It's called “the poor house.”

Fourth and finally, the resultant hourly rate in the equation has no bearing on the market, the client need, the unique conditions, or the value of the help delivered. It reduces the consultant to an arbitrary commodity, to be compared to other hourly rates and other commodities, like fish or movie tickets. When you deliberately remove market uniqueness and differentiation, you also remove the basis for high fees.

The last thing a good consultant wants to happen is for a client to make comparisons based not on the value of the contribution but rather on the charge per hour. Our value is simply not conveyed by merely showing up (thank goodness).

So the very basis for a “supply and demand” dynamic is fallacious. We do not have a limited supply of expertise, nor do we seek higher and higher demand (not if we want to maintain a life). What we should want to accomplish is an ideal relationship of interesting, growth-oriented work and fees based on our contribution to the clients' results.

The “Big Four” (or whatever it is at this reading, having come down from the “Big Eight,” perhaps the “Big 1.5”) consultancies are the stepchildren of accounting and audit firms. Consequently, they have been fixated on billing rates that are based on hours, fit nicely into boxes on a spreadsheet, and can be conveyed in a no-thinking-required fee schedule. These are, after all, descendants of the primeval bean counter. Their dilemma, facing the tremendous overhead of multiple offices, advertising, and huge recruiting costs, has been addressed by creating an army of inexpensive technicians who descend on the client with an hourly billing rate that is somehow digestible but significant enough to generate profit when multiplied by the legion of consultants assigned to the account. This model has been adopted by smaller firms and independent practitioners who, frankly, should know better.

Supply and demand tends to get way out of whack when the consulting firm can produce a prodigal supply of low-level people, irrespective of the actual client demand. And this tactic has, understandably, driven clients to ask: “Can you do this with fewer people?” “Can you do this in fewer days?” “Can you do this with cheaper people?”

These are not the questions we want a client to be asking. I'd rather hear a client ask: “How can we maximize the results?” “Will you work with me on this as a partner for as long as it takes?” “Will you assure me access to you personally?”

These latter questions represent the value of a long-term relationship, not an attempt to get me out before I run up too much of a bill.

Leave supply and demand to the economists or the people raising ostriches. It has nothing to do with good consulting, and it should never be used as a basis for fees.