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"The Most Important Act In Consulting Is Setting The Right Fee."

"The Most Important Act In Consulting Is Setting The Right Fee."

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 Alik Levin    This is what Gerald M. Weinberg writes in his book Secrets of Consulting: A Guide to Giving and Getting Advice Successfully.

The book is full of great advices to consultants like myself and to those who hire consultants. 
Weinberg discusses many other topics spiced with stories from trenches. But in this post I am focusing on monetary part of consulting.

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Here in Microsoft Services Organization there is clear separation of who does marketing, sales, operations, and who delivers the service as an opposite to freelance consultant or small consulting firm. Everybody is crystal clear aware of what each team member does, how she does it, and most important why she does it. All the team members work in synergy in order to make sure:

  • Marketing is targeted to most profitable sectors.
  • Business is growing by selling more.
  • Team is capable to deliver the services being sold.
  • Team is capable to deliver world class services to highest customer satisfaction.

On other side, when the team is not in synergy it suffers...

These are the few anti-patterns I witnessed:

Wishful marketing

This is about marketing services that cannot be delivered to the highest customer satisfaction. Weinberg's writes:

"We can do it - and this is how much it will cost".

I only hope the emphasis here on "We Can" vs. "Will Cost".

Selling no matter what

Sometimes sales folks are eager to hit their numbers and just sell services without making sure there is a proper resource available with a relevant skills. This might lead to the situation where many service packages sold with a very low price making consultant who delivers it a very cheap deal. During few of my service deliveries I found out my work was completely ignored only because it's been done too quick (read "cheap") without major resource investments. Few days after I got to know another consultant was hired to do the same work. I reviewed the recommendations - they were identical to mine. I also got to know that the service fee was few times higher comparing to what was charged for mine... The other guy's report was fully implemented. This is what Weinberg writes:

"The less they pay you, the less they respect you".

Committing to deliver something you can't

This situation might be due to the desire to win another customer, arrogance, recklessness, or incompetency. In any case the customer is left extremely unhappy. I cannot remember Weinberg's exact quote but I think it goes along something like "if you weren't able to deliver on your promise don't take the money". Sounds crazy but true. I did such mistakes in the past and I expect to make some more in the future. Admitting my mistakes and not charging the customer created the trust and gave me a second chance - something I would not get the other way around.

 

What are your lessons learned from charging your customers?

 

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  • Sorry, I cannot agree with "The Most Important Act..." I hate to repeat it but many employers just dont listen consultant's conclusions and others do nothing with their recommendations. So regardless of the fee hiring consultants means waste of money for nothing for those who is not ready to follow all the recommendations.

    Alex Piller,

    IT consultant

  • Alex, good point!

    But why does your website advertises Viagra vs IT consulting services?

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