“I can’t increase my billing rates. No one’s going to pay <insert number> an hour for a consultant.” Have you ever said something like that? Do you think there’s no way you could increase your fees 30% or 50% or 100% or more? If so, you need to say goodbye to your inner quarryman.1
First, though, how much would you pay for a six-ton piece of marble? Since there’s an off chance you don’t recall the going rate for marble, I’ll remind you that it typically runs about $150-200 per ton, though white onyx can set you back $700 per ton. What do you figure the upper-limit is on six tons of marble? Five thousand bucks? Maybe ten thousand?
That’s your inner quarryman talking, and he’s doing you no favors. It so happens that Michelangelo’s David weighs about six tons and I’d hazard a guess he’d fetch more than ten grand at auction.
The quarryman just sees blocks of stone. He views his product as generic and he believes his customers harbor similar perceptions. Hence, he believes there’s a firm upper limit capping his prices, with competition and market rates clamping down the lid.
In essence he denies that marble can actually be priceless or that high fees could apply to him. What about you? Is your inner quarryman convincing you that your offerings are generic? When it comes to raising fees, are you a virtuoso at the fine art of denial? Probably.
Denial is a surprisingly ambrosial seasoning easily sprinkled onto whatever life dishes up. If a topic, event or situation is marred by the bitter flavor of fear, we can toss a bit of denial at it and suddenly everything tastes like chocolate. Or close enough. And what could be scarier than facing the truth that we have not lived up to our potential; that, with our incomes on the line, we have heeded the quarryman rather than Michelangelo?
Years ago I saw a YouTube video in which a woman folded a t-shirt perfectly in about two seconds. (Don’t ask why I watched this.) The comments section was a flood of skeptical comments deriding the video as a fake and pointing out the obvious cut in the footage. If the critics had set aside their denial for long enough to try out the technique demonstrated in the video they would have learned that, in fact, it’s possible to neatly fold a t-shirt in a veritable blink of an eye.
You could have easily doubled your revenue over the past twelve months but, instead, you left that money on the table. What’s your reaction to that statement? One possibility is to say, “No way,” throw some denial at this preposterous blog and be on your merry way. Let the quarryman carry the day and keep your fees exactly where they are.
On the other hand, you could kick the quarryman into his pit while yelling, “We are Sparta!”2 and take two actions: 1) consider the evidence; 2) give higher fees a try.
When I first started working with a mid-size, Boston-based consulting firm about five years ago their average project was around $250,000 and seven-figure projects were very rare. Their work has remained the fundamentally the same over the years; however, we fired their inner quarryman and started asking clients for bigger projects and higher fees. Now, their average project is around $1 million and it’s not unusual to win $3+ million engagements.
If they can do it, why can’t you? That’s just one example, and I’ve got plenty more. If you’ve read this far you’ve already taken the crucial first step of considering the evidence. Now take the second…
Try asking for higher fees. If you charge based on an hourly or daily fee, then quote a 30% higher rate on your next four projects. Trying it one time is not a fair test and you can’t expect to win every project. If you get at least two wins, try raising the rates another 30%, then raise them again so that you’ve doubled your current rate.
You might not win as many projects (though I think you’ll be pleasantly surprised), but you don’t have to. Imagine winning half the projects, working half as much and taking home the same pay. Not a bad picture, right?
If you charge based on value, follow a similar process: on your next four projects figure out what you would normally charge then determine the client’s return if you increase the fee 30%. Are you still giving at least a seven-to-one return on risk-adjusted value? If so, then propose the higher fee. Just try it.
When you get down to it, you can either settle for believing you’re a stonecutter, churning out blocks of stone, and accept the limits on your revenue or you can try climbing out of the quarry. You don’t need to be consulting’s equivalent to Michelangelo—even a simple headstone commands ten times the price of raw rock.
I can’t guarantee that you’ll successfully double your rates or that you’ll ever learn to fold a t-shirt in two seconds; however, I know from working with hundreds of consultants that if you try raising your fees you’ll end up being a happier, wealthier consultant.
Text and images are © 2019 David A. Fields, all rights reserved.