Package and Position Your Consulting Services to Earn Higher Fees

Consulting Success

5 Apr 201606:16

Summary

TLDRIn this video, Michael Zaperski from consultingsuccess.com discusses strategies to increase consulting fees and win more business. He advises against relying solely on an hourly rate, as it fails to convey sufficient value and may deter potential clients. Instead, he recommends creating packaged programs that offer clear benefits and transitioning to value-based pricing. By focusing on the results and value delivered to clients, consultants can charge higher fees, increase their income, and potentially reduce the amount of time spent on projects.

Takeaways

💼 Charging an hourly rate can limit your earning potential and may not convey enough value to clients.
🚀 Consider creating a structured program or service package that offers a clear set of deliverables for a fixed fee, which can increase perceived value.
💡 Positioning your services with a focus on the results and value you provide, rather than just the hourly rate, can help win more business.
📈 Transitioning from hourly or daily rates to value-based pricing can open up new opportunities and increase your income.
🤝 Demonstrating the value you bring to clients, through clear communication and showing tangible results, can justify higher fees.
💼 Consulting clients may be more attracted to a well-defined program with a set fee rather than an open-ended hourly rate.
📊 The speaker suggests that by focusing on value, consultants can create business models that increase income with less travel and work.
🛍️ Offering a specific program with a set of services and a fixed fee can make clients feel more compelled and attracted to your offer.
🔑 Emphasizing the value you create for clients, rather than just stating your fee, can lead to higher compensation and client satisfaction.
📈 There is potential to significantly increase your income by shifting from an hourly rate to a model that emphasizes the value of your services.
🛑 The mindset shift from hourly billing to value-based pricing can change how consultants perceive their services and how clients perceive the cost.

Q & A

What is the main issue with charging an hourly rate for consulting services according to Michael Zaperski?
-Charging an hourly rate, such as $450 per hour, may sound premium but doesn't convey much value or provide a compelling reason for clients to engage the consultant's services.
What alternative does Michael Zaperski suggest to simply stating an hourly rate?
-Michael suggests creating a program or an offer that outlines specific services with a set fee, such as a program for $1500, which can convey greater value and attract clients more effectively.
Why might clients feel more compelled by a program with a set fee rather than an hourly rate?
-A set fee for a program gives clients a clear understanding of what they will receive, making the consultant's services seem more valuable and providing a compelling reason to take action.
What is the potential downside of focusing solely on an hourly rate for consulting services?
-Focusing only on an hourly rate can lead to clients feeling like every hour costs them a significant amount without seeing the value in what is being offered, which may deter them from engaging the consultant.
What is one of the key strategies Michael Zaperski recommends for consultants to increase their fees and win more business?
-One strategy is to shift away from charging on an hourly or daily basis and instead focus on the value and results being created for the client.
How can consultants demonstrate the value they create for their clients?
-Consultants can demonstrate value by clearly communicating and showing the specific benefits and outcomes that clients can expect from their services.
What is the potential benefit for a consultant in creating a new business model that focuses on value and results?
-The potential benefit includes the ability to charge significantly more for their services, as they are creating more value for their clients, which can lead to increased compensation.
Can you provide an example of a new business model that Michael Zaperski discussed with a consulting client?
-One example is creating a model that allows the consultant to double their business in a few months and potentially reach an annual income of $900,000, with less travel and work involved.
What is the importance of focusing on the value created for clients rather than just the fees charged?
-Focusing on value allows consultants to build stronger relationships with clients, justify higher fees, and potentially reduce the amount of time spent on client projects, leading to a better work-life balance.
How can consultants assess if they can benefit from the strategies suggested by Michael Zaperski?
-Consultants can reflect on their current business practices, consider if they are primarily charging hourly rates, and evaluate whether creating value-based packages or programs could benefit their business.
What steps should consultants take to start seeing results from implementing the strategies discussed by Michael Zaperski?
-Consultants should evaluate their current offerings, identify areas where they can package services to convey more value, and begin communicating the benefits and results they provide to clients more effectively.

Outlines

00:00

💼 Increasing Fees Through Value-Based Service Packaging

Michael Zaperski from consultingsuccess.com discusses the importance of packaging and positioning services to increase fees and project earnings. He observes that many consultants, including international tax consultants, often rely solely on an hourly rate, which may not convey enough value to the client. One consultant charges $450 per hour but fails to offer a compelling reason to engage their services. Zaperski suggests creating a program or service package that communicates greater value, such as a specific program with a set fee of $1500, which could be more appealing to potential clients. He emphasizes the need to shift from hourly rates to value-based pricing to capture more earnings and win more business.

05:02

🚀 Transitioning from Hourly Rates to Value Communication

In the second paragraph, Zaperski continues the discussion on fee structuring by advising against reliance on hourly or daily rates. Instead, he recommends focusing on the value and results delivered to clients. He shares a story of a consulting client who was generating over $200,000 a year but wanted to reduce travel and spend more time with family. By transitioning to value-based business models, Zaperski helped the client create opportunities to double their income to $400,000 in a few months and potentially reach $900,000, with less travel and work involved. The key takeaway is to communicate the value created for clients in all interactions and to price services in a way that reflects the significant value provided, allowing for higher earnings and client satisfaction.

Mindmap

Keywords

💡Packaging Services

Packaging services refers to the process of structuring and presenting one's professional offerings in a way that is appealing and easy for clients to understand and purchase. In the video's theme, Michael Zaperski suggests that instead of offering services at an hourly rate, consultants should package their services into programs that convey more value. An example from the script is when he mentions creating a program with a specific set of services for a fixed fee of fifteen hundred dollars, which is more compelling than an hourly rate.

💡Positioning

Positioning is the strategy of how a service or product is presented to occupy a particular place in the mind of the target audience. It's about creating a unique place for the service in the market. In the context of the video, positioning is about how consultants can present their services to increase their fees and be seen as more valuable, as opposed to just stating an hourly rate.

💡Hourly Rate

An hourly rate is a pricing structure where a service provider charges a client for each hour worked on a project. The script discusses the limitations of using an hourly rate, such as not conveying enough value and leaving money on the table, as seen when the international tax account charges four hundred fifty dollars an hour.

💡Value Proposition

A value proposition is a statement that clearly articulates the unique value a product or service provides to customers. In the video, the value proposition is the idea that consultants should focus on the value they deliver rather than the time spent. It's about shifting the conversation from hourly rates to the outcomes and benefits clients receive.

💡Compelling Offer

A compelling offer is a proposal that is hard for the target audience to resist because it provides significant benefits or solves a problem they have. In the script, Michael suggests that consultants should create compelling offers by packaging their services, which is exemplified by the idea of a program with a fixed fee of fifteen hundred dollars that covers specific services.

💡Consulting Success

Consulting success refers to achieving desired outcomes in a consulting business, which can include higher fees, more clients, or better work-life balance. The video is about achieving consulting success by reevaluating how services are offered and priced, as illustrated by the example of an international tax account who could increase their fees by offering a packaged program.

💡International Tax Consultants

International tax consultants are professionals who specialize in tax issues that cross national borders. In the video, Michael Zaperski uses his experience speaking with international tax consultants to highlight common issues with pricing strategies and to suggest improvements, such as moving away from hourly rates.

💡Business Models

A business model describes the rationale of how an organization creates, delivers, and captures value. In the context of the video, new business models are created to help a consulting client transition from hourly billing to value-based pricing, with the aim of increasing revenue and reducing travel.

💡Client Projects

Client projects refer to the specific tasks or assignments that a consultant undertakes for a client. The script mentions that a consulting client feels they are spending too much time on client projects and not enough with their family, indicating a need to reassess their business approach to achieve a better balance.

💡Value-Based Pricing

Value-based pricing is a pricing strategy where the price of a product or service is determined by the value it provides to the customer, rather than the cost of production or market competition. The video encourages consultants to adopt value-based pricing by creating programs that demonstrate the value they bring to clients, as opposed to charging by the hour.

💡Compensation

Compensation is the payment or reward received by an individual for their work or services. In the video, the concept of increasing compensation is tied to delivering more value to clients, suggesting that by creating more value, consultants can also capture more of that value in the form of higher fees.

Highlights

Michael Zaperski from consultingsuccess.com shares advice on increasing service fees and earning more per project.

Consultants often charge an hourly rate, which may not convey enough value to clients.

An example of an international tax consultant charging $450 per hour is given.

Charging an hourly rate can leave money on the table due to lack of perceived value.

Suggestion to create a program instead of just an hourly fee to increase perceived value.

A specific program offer can make clients feel more compelled and attracted to the service.

The mindset shift from hourly cost to the value provided is crucial for higher fees.

Transitioning from hourly to value-based pricing can open up new opportunities.

A consulting client's story is shared, illustrating the shift from hourly to value-based pricing.

The client's goal to double their business and reduce travel is mentioned.

Creating new business models that focus on value and results rather than hours worked.

The potential to significantly increase income with less work and travel is highlighted.

Two recommendations are summarized: creating packages and focusing on value communication.

Demonstrating value to clients instead of just stating fees can lead to higher charges.

The importance of delivering more value to capture more compensation is emphasized.

Encouragement to reflect on current practices and consider the suggested approaches for business growth.

A prompt to take action and expect positive results from implementing the advice given.