How to Price Your Consulting Services so You Finally Earn What You Truly Deserve
This is especially true for consultants on the side
There are 2 rules I abide by as a consultant on the side.
Rule # 1: Get paid a premium on my services.
Rule # 2: Refer to Rule # 1.
I get it. Pricing upwards is odd in a world drowning in discounts. After all, everyone wants cheap stuff.
Read that sentence again. Sounds weird? Because it is.
Yes, I want cheap food, groceries, and pens. But there is no need for everything to be dirt cheap.
I want to know that the Patek Phillippe Nautilus watch I am buying decades down the road is worth my time and money. I want to be waited like a King when I am on vacation.
And this is the core message of this article. To earn more as a consultant, we must think premium.
The Rationale for Pricing Premium and Market Psychology
Many businesses mistakenly under-price their products attempting to convince the consumer that their product is the least expensive alternative hoping to drive up volume; but more often than not it is simply perceived as cheap.
- How to Price Your Products, Inc.
There are 2 ways to think about the word cheap. One has to do with the transaction price. It refers to affordability.
The second interpretation has to do with low perceived value. And that is a consumer psychology issue.
The worst scenario occurs when both interpretations exist in your clients’ minds as you pitch your consulting services. When they start thinking that you are another-one-of-those-freelancers-online, you become another-one-of-those-freelancers-online.
This is a perfect recipe for disaster for consulting services. Why? Because you will have a difficult time upselling, cross-selling, and pricing the same set of services upward in the future.
Remember. First impressions stick like blue cheese.
Or, like a super-adhesive.
First Thing First. You Must Spend Time Defining Your Marketplace.
A market is where people come together and exchange goods and services for payment. There are many tiers of the market in the consulting niche you operate in.
The good news (or the bad news, as you perceive it) is this. The consulting service market tier you operate in does not discriminate the full-time professionals from those playing on the side.
The consulting world competes with knowledge, practical experience, and thought leadership. This explains why some consultants earn 6-digits within 4 hours, and a vast majority earn 4-digits in 6 months.
You can play in the exclusive market where 6-digits is the norm if you (actually) know your stuff. You are never nickel’ed-and-dime’d. You need not submit timesheets. No excruciating meetings. Last-minute quality audits are unheard of.
I used to work with an electrical engineer with 30-years of experience in a technology consulting firm. He is the only one in Asia-Pacific who has completed I.T. projects with integration to complex electrical grids.
James charges the firm a flat fee of $20,000 per month. And he banks in this amount every month even if there are no projects for him.
And you might be wondering. Why would the firm do that?
Simple. This marketplace (I.T. project with electrical grid integration) has only 1 player. Either you pay to keep James, or he joins the competitor and grabs all the deals.
Be like James. Be your exclusive market.
Watch Clients Throwing Gold, Silver, Bitcoin, Ethereum at You
Let us circle back to our core topic. How do we price our consulting services?
Take care of potential pricing pushbacks for a start. Create a YouTube channel with videos of relevant content, write thought leadership articles, or how-to’s, so you can point clients with a limited budget there.
Another reason you should do that. Because you want to focus your time, energy, and attention on the Big Fish.
Let us assume that you have already done that.
Premium Pricing Model for Consulting Services # 1 — Price-to-Perfection
What would it look like when you are on your A-Game?
What would the clients get from you when you pull no punches and give your all?
What does it mean to work with a client who places unconditional trust in you and your work?
How much does the client have to pay you for you to sacrifice everything and do your utmost best for him/her?
Write that number down. That would be your premium price based on price-to-perfection thinking.
Author’s Note: You can work with 1 or 2 clients maximum if you choose this route.Premium Pricing Model for Consulting Services # 2 — Price-to-Scarcity
You want to price your consulting services as if you are the Mona Lisa painting hanging on the wall in The Lourve Museum.
That is, if you are the only one in this world who can get the job done. Like James.
If so, the market dynamics will work in your favor. Think about it this way. When there are more bidders for (the real) Mona Lisa, bid prices will continue to climb until one successful bidder emerges.
Price like Mona Lisa. The real one. Have faith and confidence that you have the skillsets and experience to back yourself.
In Conclusion
What is your choice between premium pricing and basement prices?
I choose premium pricing because quality clients pay top bucks. I want to attract such clients.
It takes confidence and a mindset shift to engage in premium pricing. And there are 2 ways to do that mechanically.
Now go earn what you deserve!
Other Stories To Help You Grow Your Consultant Side-Hustle:
On starting your Consulting Practice.
On building credentials.
On the toolbox you need.
As a content contributor, I write my observations from daily life and my business exposure. Because our life experience is the bedrock of our unique perspectives.
