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

2.1. SUPPLY-AND-DEMAND ILLOGIC

One of the worst pieces of advice I ever heard was from a professional speaker who pontificated to the audience that speakers should "raise fees when demand exceeds supply." That might work for soybeans or cement, but it's simply goofy when applied to professional services.

Demand never exceeds supply. Not only do I know of no consultants who are booked every day of the year, but I can't imagine one who would want to be. The idea, I always thought, was to work a minimal amount of time while earning a maximum amount of money. (My ideal client is one who pays me $5 million to work for twenty minutes a year. My wife points out that if I can work for twenty minutes, I can certainly manage forty minutes.)

Moreover, supply and demand rest on the trembling foundation that a single client at a single time usurps all attention. It is possible to do something for multiple clients at any given time: research, joint meetings, newsletters, focus groups, interviews, and a plethora of other activities can benefit numerous clients in unique ways. (The lawyers achieve this by billing different clients for an aggregate of hours that only slightly exceeds by a factor of four the total number in any one day.)

NOTE

The idea is to meet demand with a minimal supply of labor and, in fact, meet growing demand by an increasingly diminishing investment of time. This is called working smart, not hard.

There are actually formulas that advise that consultants take the following ...