The Consultants Club on Thursday 17 July held a members-only roundtable discussion on pricing strategies. With participants including seasoned consultants with decades of experience and those just starting on their consulting journey, the message was clear – pricing remains an uncomfortable blend of intuition, trial and error and strategic negotiation.
Whilst there is perhaps no perfect pricing model, there are plenty of lessons and tips that the Consultants Club members shared.
The proposal dilemma: Price or relationship first?
Professional services marketers understand well that clients rarely buy on price alone, and so to with consultants.
Whilst the temptation may be to include charging and fee proposals in initial tender documents, there is a clear move towards benefit and value over price. “We get them to like us first,” one consultant said, “and then discuss fees,” with another adding clients “buy what you bring to your table”.
The Consultants Club top tip
Whilst this approach can delay sometimes challenging conversations on fees, it allows consultants to build rapport with clients with the focus on the value and contribution they will bring to a firm or project. Where a would-be client’s sole focus is on fees, it is unlikely to be a meaningful or fulfilling piece of work.
Retainers, projects or time spent
The billable hour is loved and hated in unequal measure yet remains stubbornly used across professional services. So it is perhaps surprising how few marketing and BD consultants choose to charge professional services firms in a similar way. Indeed, where one consultant was asked to keep time sheets, not once did the client ask to see them!
Consultants use a range of pricing structures: day rates, project fees, retainers and hybrids depending on the nature of the project. The use of gold, silver or bronze service levels gives clients options and encourages upselling.
Fees based on outcomes are increasingly the norm, with one consultant summing it up saying clients are “not buying your time; they’re buying your knowledge, connections and experience”.
The Consultants Club top tip
The Consultant Club members encourage each other to focus on the value and benefits they bring to their clients. The temptation to equate fees to a daily or hourly rate should be avoided as it naturally limits the projects that can be taken on.
Project creep
Almost all Consultants Club members have experienced project creep – being asked to do more than the fee allows. Whilst the temptation to “go the extra mile” or “add value” might be there, it should be avoided.
It is, one consultant shared, commonplace when instructed on strategy projects with “clients then asking for implementation”.
In addition to a contract, a detailed scope of work shared and agreed up front is essential. “That scope of works should not only set out what is included in the fee, but also what isn’t”.
The Consultants Club top tip
Consider a three-month (or similar) review clause built into contracts. This allows consultants to test pricing assumptions in practice, adjusting fees up or down after an initial period of collaboration.
Increasing fees
Consultants Club members are diligent in ensuring all engagements are supported by strong contracts, which include the right to increase fees each year in line with the Retail Price Index. Yet surprisingly, not all members take advantage of those clauses.
As one consultant said, “We are dreadful at doing this every year, even though clients expect it and don’t push back”.
Those that do have created sensible and commercial habits with pricing revisited annually and being transparent about rising overheads. “If you were in-house, you’d expect a pay rise,” said one consultant. “This is no different.”
The Consultants Club top tip
A strong contract that makes a provision for annual fee increases and charges on late payment is vital. Consultants should enforce them.
The gender pricing gap
Reputation and experience clearly influence pricing, with consultants with strong personal brands or proven track records commanding higher fees.
Yet a clear difference emerged in pricing strategies between male and female marketing and business development consultants. In short, male consultants appear more confident in the value they bring and the fees they charge.
Several consultants pointed to a persistent gender gap in how men and women approach pricing. “Men go in and say, ‘I’m worth this,’” one participant observed. “Women tend to caveat their rates and even talk themselves down.”
The Consultants Club top tip
Independent consultants are encouraged to believe in the value they bring. Use colleagues and peers as a sounding board on fees if unsure.
Pricing for pain
With wry smiles, Consultant Club members recognised what was called the “plumber’s fee” or, more bluntly, the “pain in the backside” fee – the premium consultants add when a client or project is expected to be difficult. It is not seen as “punitive more protective”, consultants agreed.
The Consultants Club top tip
Ask yourself, will an increased fee outweigh the stress of a challenging client or project? Sometimes it is simply better to walk away.
Pricing isn’t just numbers
Pricing is ultimately more than numbers. It’s about knowing your value, setting boundaries, and shaping the kind of work – and life – you want. “What do you want this piece of work to do for you?” one consultant asked. “Does it fit around your life right now?”
For independent consultants, pricing isn’t just about revenue. It’s about sustainability, respect and impact. And if there’s one message that echoed through the roundtable, it’s this: pricing may never be perfect, but with the right conversations, community and confidence, it can be a lot less painful – and a lot more powerful.
To join the Consultants Club and attend future round table discussions contact visit The Consultants Club.