Value-Based Fees: How to Charge—and Get—What You're Worth: A Guide for Consultants, Second Edition

10.1. ENTRY-LEVEL FEES

One of the worst strategies that I've ever encountered at entry level is to price low in order to get business. Since this book is for advanced consultants and flourishing practices, I won't spend too much time on this, but since early fee strategy often determines later fee levels, it's important tounderstand the influence (so that you can undo it, if you must).

Ironically, but completely understandably, the tendency to set low fees to attract business actually reduces business and establishes a horrible precedent that is difficult to overcome.^[]

^[] Note that because my focus is on value-based fees, I'm not referring to fee schedules or per diem amounts when I talk about fee levels but rather to the value that the consultant is comfortable using as the basis for his or her fees.

NOTE

Poor fee strategy at the beginning of one's consulting career creates all kinds of problems later in one's career. It's easiest to reach the roof from the top floor, not from the basement.

Here's what I mean when I refer to fees that are too low on a value basis: if the client would have paid, in terms of value, $70,000 for a project and the consultant's actual fee was $58,000, that's fine. But if the consultant's fee was $24,000, that's not fine, despite "exposure," the promise of future business, or the prestige of landing that client. That's because those factors would also have been garnered at the higher fee.

The invidious nature of low fees early in one's career creates ...