It’s probably safe to say that most of us would like to boost our incomes. How do you do that without burning  yourself out? How do you break the income barrier, especially when the economy is poor, unemployment is high, there are many consultants competing for the same business, and clients are trimming budgets?

Perhaps you’ve wondered why some consultants maintain high incomes in good times and challenging ones.

Take this simple quiz developed by Linda Popky, a million-dollar consultant and president of Leverage2Market Associates, to find out if you’re working hard or working smart.

1. Do you feel the only way to increase revenue is to bill more hours? __ Yes __No
2. Do you feel the need to justify to clients the time you are putting into their projects? __ Yes __No
3. Do you feel you are frequently treated like a vendor or hired hand rather than a partner to your client? __ Yes __No
4. Do your clients tell you they love your proposal but need to get final sign-off from higher authorities before proceeding? __ Yes __No
5. Do you find yourself competing for business on the basis of price? __ Yes __No
6. Do you work directly with decision makers who have the ability to write a check or issue a purchase order for your work? __ Yes __No
7. Can you clearly articulate why the client should hire you in terms of their key business objectives? __ Yes __No
8. Are you clear on why the client should hire you vs. find other ways to solve their problem? __ Yes __No
9. Can you specifically state the metrics the client will use to measure the success of the project? __ Yes __No
10. Can your client state the impact of the project on their organization, including customers, suppliers, employees, and other stakeholders? __ Yes __No

For questions 1-5, give yourself 10 points for every No answer, 0 points for Yes answers.

For questions 6-10, give yourself 10 points for every Yes answer, 0 points for No answers.

Total up your score.

Less than 50 points: You may be working hard, but you’re not necessarily working smart. Look for opportunities to take your business to the next level.

50-60 points: You’re on the right track, but wouldn’t you like to increase your revenues in line with the value you’re creating for clients?

70-80 points: You’re doing a great job, but there’s opportunity to build your business by thinking more strategically about the value you provide.

90-100 points: You understand the importance of selling on value and you’re always looking for best practices to help you do even better.

Whatever your score, join Linda for the upcoming WIC workshop, “Earn What You’re Worth: Value-Based Pricing” on Tuesday September 20. She’ll discuss ways you can use value-based pricing to get the fees you deserve for the value you provide to clients. Linda will focus on the methodologies of million-dollar consultant Alan Weiss, author of more than 40 books on consulting, including Value-Based Fees: How to Charge — and Get — What You’re Worth — A Guide for Serious Consultants.

Register by September 6 to get the early-bird rate.

By: Michelle Gouldsberry

Netflix, with its latest rate change, is helping customers like me explore not only other video sources, but also explore my technology to avoid being impacted by its changes.

In one fell swoop, Netflix has gone from being perceived by movie watchers across the U.S. as the darling ‘little guy’ that displaced Blockbuster to now being perceived as just another greedy corporation. In less than 24 hours after the announcement, over 30,000 people posted comments to Netflix’s Facebook page and they are almost entirely negative (some people suspect that 30,000 is conservative since Netflix is deleting some of the comments).

They had good reasons: they are paying millions of dollars in royalties/fees to Hollywood to stream videos. And despite what they say about their DVD channel being a long-term strategy, there is speculation that they sorely want to reduce their huge physical inventory and streamline their operations in the process. And then there are those pesky shareholders. All good reasons for raising your prices/changing your pricing model.

But the lesson for us as consultants is that you need to be very careful about making bold moves to force customers into a business model that works better for you. Netflix’s new pricing model incents customers to move to more video streaming/downloads vs. order physical DVDs. However, only 27% of Americans are currently streaming videos. Seems like too early to punish your ‘bread and butter’ customers.

Customers enjoy having the option of either ordering a DVD or streaming video. Personally, I try to download first, but if I can’t find the movie I want, I’ll order it. It’s great to have the option because the streaming product just is NOT there, yet. Even my 17 year old son knows that. When we talked about moving to the ‘streaming only’ plan to avoid doubling our fees, he went haywire, saying that most of the movies he watches aren’t available via streaming. And sure enough, he proved that by showing that only 2 out of 10 videos at the top of our queue are available for download right now. Not ok.

There are definitely things Netflix could have done to execute this change better, specifically, by doing it AFTER they had invested more energy and funds in beefing up their virtual movie inventory. By communicating added value at the same time they raise prices would have eliminated a lot of the outrage that their customers have. But as a result, they are forcing consumers like me to look around for alternative sources for videos and, yes, they will also get our family moving quickly to see what technology we have that will allow us to download videos in all of our viewing areas of the house. A move we’d have to make eventually, so again, “Thank you, Netflix!”.

By: Jen Berkley Jackson

Powerful Advice from Warren Buffet and Seth Godin
Two very influential people have recently commented on the power of pricing.  Warren Buffet said “The single most important decision in evaluating a business is pricing power” and Seth Godin said “the goal, no matter what you sell, is to be seen as irreplaceable, essential and priceless. If you are all three, then you have pricing power.”

Pricing professionals like me find it exciting to see pricing in the headlines. There have been plenty of links and tweets about these articles but what does this have to do with consultants?  From my perspective, consultants are pricing professionals too. You may not think of yourself that way, but you probably set prices more often than most product managers!

Pricing power is rooted in delivering value.  For consultants and small business owners, pricing power is relevant in two ways:

1.      Regardless of your consulting specialty, you impact your clients’ power to price.  You may help them create a higher quality product or service or deliver a better customer experience which is valuable to their customers.

2.      The ability to increase your clients’ pricing power is your value.  This value will give you the power to set higher prices.

If you focus on being irreplaceable and essential for your clients’ success, you will be providing value and perhaps even be seen as priceless.

Watch for my next post on relating price to value where I’ll provide clarity on how to get the highest price for your value.

By: Robin Pieracci

I love fresh starts: New Years, the beginning of school, spring. There’s something about the limitless possibilities and the promise they hold that creates an excitement and happiness within me that leaves me almost giddy (okay, drop the almost) and adventuress.

So as I begin my second year as WIC’s president, I felt inspired to write about two recurring themes I saw in 2011:

• Pricing: should I raise my prices and how
• Marketing: should I market my services and how

The short answer: Yes. How: Just do it!
Just Do It
Every morning, I see two women walking a street near my home. They’re older, heavy, and one uses a walking stick. But every morning, they’re out walking–and they do it confidently. And that’s exactly how we should approach pricing and marketing our consulting services.

Odds are that which is preventing you from marching forward is a roadblock only in your mind. If those two women held onto thoughts that they were too old or too heavy to walk as others I know do, they’d miss out on the joy that I see in their faces every morning — and I’d really miss seeing that, because they inspire me.

So, just do it. Let go of your worry and preconceived notions and raise your prices. You’ll be surprised by the results. 

The success reported by WIC’s Leaders Network members and the feedback in the 9th Annual WIC Compensation survey from consultants who took the plunge bear that out. One quote in particular sums up this point well, “I simply took a breath and added 10 – 20 percent. Viola!” Another participant shared how she ”really just made a decision to charge more. I come up with project fees like always and then before presenting the numbers, I bump up the amount to counter my tendency to underestimate effort and undervalue my services.”

Remember, you’re good at what you do — really good. And therein lies the key.
Confidence Is Key (and Fake It ‘Til You Make It)…
Running your own business takes a lot of chutzpah. It’s not for everyone. So you’re already ahead of the game. But for some reason when it comes to money, many of us pause. 

So, assess your services. Survey the market, including demand. And pick a price that reflects the value that you deliver and what the market can bear. That doesn’t mean lowball, the market bears a variety of prices based on the value of the offering — the better the offering, the higher the price.

When it comes time to discuss costs with clients (after you’ve wowed them with the deliverables), simply present the price. Be matter of fact. Be confident. Don’t add extraneous explanations. And don’t “defend” the price. You already outlined the deliverables and value; nothing more is needed.

Easier said than done, I know. But here’s what I used to tell my public speaking students: no one knows how you feel inside but you — unless you show them. Don’t show them. It doesn’t matter if you’re a quivering mass of nerves and doubt on the inside. Project confidence and that’s what your audience sees. And the more you do that, the more you’ll start feeling what you’re “faking.”
…So Is Being Clear About Your Value
Being confident is key, but so is articulating what you do and the value it brings. Sometimes, this can be challenging in part because it feels like we’re bragging. So, if it’s hard for you to talk about yourself or you’re not quite sure what your sweetest value proposition is, work with a coach. I do, and it’s been illuminating — and I’m already seeing an impact on my business.

Once you’re clear on your messaging, strut your stuff. Write articles. Blog. Speak. Update your website. Meet people. Blog. Tweet. Answer questions on LinkedIn. Start a Facebook page. Blog.

There are a lot of ways you can market yourself these days. Choose the ones that make best sense based on your audience. But whatever you do, don’t do them all — at least don’t start them all at once. Get one up and running and then start the next one. The one I think all consultants should strongly consider is blogging, in case you didn’t pick up on that already.

Blogging is the equivalent to speaking softly but carrying a big stick — blogging is a big stick when it comes to demonstrating your knowledge.

So what do you say? Are you going to just do it?

I’d also love to hear about your favorite “big stick” and why. And if you feel inclined, share your favorite best practice for using that tool.

Oh, and if you have a question about value-based pricing and marketing your services, go ahead and post it. If I can’t answer it, someone else on the WIC board can.

By: Avery Horzewski

I read a nice article on Raintoday.com that deals with a scenario that most consultants face at one time or another: What to Say When a Client Claims Your Price Is too High” by Charles H. Green, Contributing Editor, Raintoday.com. It’s a good read, so make sure to check out the full article.

“If you’re like most professionals, you’re not comfortable with selling. It’s not easy fighting the feeling that hyping yourself is somehow inappropriate. And it’s worse when you have to deal with objections, doing presentations, and getting rejections—or waiting for the phone to ring.

“But little can compete for sheer discombobulation with the plain old, ‘We think your prices are too high.’ What do you say to that?”

• “Listen to your gut and ask yourself seriously, objectively, curiously, ‘What exactly do they mean when they say your prices are too high.’ And stay there for a minute. That’s because until you know what they mean, you are simply arguing with yourself. You presume to know what the client means and are answering the presumed objections you have invented.”

  According to Green, there’s more than one reason why customers may think this way (read the article for the details on each of these:) 

  • Sticker shock
  • Budget busting
  • Bazaar bargaining
  • Sucker punched

“Here’s the key point. If you try to guess which of those scenarios is operating behind the curtain of your client’s eyes, you have maybe one chance in four of getting it right. But if you choose to guess without confirming your guess with the client, you will lose—even if you guess correctly

“Therefore, the worst thing to do is defend against the attack you are imagining in your own head. The best thing to do is exactly what you don’t want to do—ask the client simply, ‘Can you help me understand what you mean by that?’”

(Blogger’s note: I love this point. It’s key to every client interaction. Don’t guess. Ask. Communicate.)

• “Asking the ‘help me understand’ question: explain that clients often mean widely varying things when they say the price is too high. The read off the list above.  
• “The intent behind the conversation: treat price concerns like any other objective piece of information: you explore its meaning and implications with the client until you have a share understanding.”

Read the full “What to Say When a Client Claims Your Price Is too High” article

By: Avery Horzewski

I was thinking about WIC’s survey results from last week’s meeting when I came across an interesting article by Geoff Colvin in Fortune from March 2, 2009.  In talking about products, he asserts that smart companies can raise prices in the midst of the recession.  Using a classic pricing matrix,  he talks about the long term impact of pricing decisions and how they are made.  None of this is new.  I assert that the same principles apply to us in the professional services marketplace as well. Differentiating your service and selling value to the client is still the name of the game for successful consultants.

So be fearless and understand your value to the client before you begin discussions on the project. The recession will not last forever, and we need to be ready.

By: Deb McClanahan