The Electronic Discussion on
Barriers to Raising Fees
From the Electronic Discussion on Group Facilitation
The contents of this resource file were compiled by Peter Meyer and Herman Holtz of
The Meyer Group
883 Cadillac Drive
Scotts Valley, CA 95066-3303
fax (408) 461-0211
They represent the results of the survey question:
"WHEN (IF) YOU WANT TO RAISE YOUR RATES OR PRICES,
WHAT ARE THE THREE TOP BARRIERS TO DOING SO?"
The 1750 word summary is divided into three sections -
A) The responses
B) Comments by the responders that I found interesting
C) Comments from Peter and Herman
- There were almost 50 responses, from consultants in all fields, from
independent specialists in training, and from independent professional
facilitators. (For the sake of convenience, I refer to all of them as
consultants.) Several stated that they did not have barriers (see C). Of
those who did, you see the trends.
- As you would probably agree, there is no right or wrong response, only more
common ones. These are ranked by frequency as I grouped them. I have
identified the relative rankings with Number 1 being 1.0. Number 2 occurred
86% as often and so on.
- In numerous cases I asked for clarification to answers. I always got it,
thanks! That does not mean I understood everyone correctly.
- If you have any questions, or want to get background information on the
answers or the programs, please drop Peter an Email or give him a call.
A) THE RESPONSES
1. Internal Standards - Value - Normalized score of 1.0
It is clear that for most respondents the most important barrier is inwards.
The "consultant's beliefs about the value of the services offered, level of
self-confidence, and attitude, attitude, attitude" shows up as the biggest
concern. A fair summary of the concern is "I believe the biggest barrier to
getting one's rates is one's own mental set. You have to believe that the
rate you ask is right for you, you are entitled to it, and there is no
question that it is a fair exchange for what you do for a client. You have to
believe it before you can make a client believe it."
Another expression of it is through lack of confidence. "My own confusion
about how to estimate my time and worth. I never know what I 'should'
charge, so I'm not confident about asking for a certain amount. "Feeling
comfortable with the amount of increase/reason for increase."
2. External Standards - Competition - .86
Closely related is "What are my competitors charging?" This is the second
strongest concern. Several responses make it clear, however, that many
consultants do not feel constrained by competition. While some of us feel "I
believe that prices do have to be "competitive" and "I don't know what the
range of acceptability is in higher fees compared to the next consultant."
many do not. They have found a way to dismiss competition (please see C.)
3. External Standards - Protect an Existing Client Relationship - .75
This is a combination of judging the 'Comfort-zone' of clients with regard
to old/new prices" and "If I am going to raise my price, I might hold the
existing price for a period of time for a client with whom I have a long
standing, ongoing relationship." It implies confidence, but is explicit in
the concern that old clients will not agree to an increase.
4. External Standards - Value (Am I perceived as valuable?) - .57
Some feel that "Probably the top barrier is perceived value" as the client
sees it. "Will clients value my services enough to pay the higher rate?" This
is a problem even if the consultant sees the value. It begins to put the
emphasis on the value as perceived by the client, not the consultant.
5. External Standards - Client Wants Low Bid - .43
"Clients whose companies expect them to negotiate the lowest rate" and
"Clients who want proof that you've charged (and received) this rate
elsewhere" are a concern as well. Some consultants responded that they are
limited by "People (who) get praise within the organization for getting a
cheap price." whether they are government or private.
6. External Standards - Budgets - .21
Some consultants find they are constrained by client budgets ("Don't want to
price myself so high that they decide not to do the work or figure out how to
do it internally") or their economic condition ("One wants to keep his or her
prices within the budget of even struggling firms.")
7. Internal Standards - Are We Truly Understood? - .21
Some consultants feel that "Clients don't realize what a professional
writer/instructional designer (or other skill set) brings to the table." This
is not quite the same as 4, as the focus there is on consultant output, here
on the lack of understanding of the complexity of the task.
8. External Standards - What Level Am I Positioned At? - .14
Several consultants said their concern is "Not being able to get to the CEO
level. Not being able to get the organization to tell me exactly what it is
they 'really' want to get fixed." Some of these consultants draw a direct
link between high contact and total lack of concern about price by the
9. Other Issues
Two other issues came up - One is "Cash flow" (do consultants ever lower
price to get cash when they need it?) The second is "Forgot to think about
B) COMMENTS THAT I FOUND INTERESTING:
- "I avoid such an issue by not quoting the client a rate, I only quote
them the cost for the entire project. That way I avoid hassles over whether
my rate is too high, or why am I raising my rate, etc. I have done this for
over 15 years and find that it works for me. The only time I charge by the
hour is as an expert witness when there is no way of telling how much of my
time will be required."
- "We are experimenting with base plus pricing - taking a percentage of
the gross profit improvement. Vote is still out on how successful that will
be. We set in motion with two clients - now if they'll make application!"
- "Well, if you present yourself professionally, then a rule of thumb in
Australia is AUD$400/day - beginner, AUD$600/day - relatively experienced and
AUD$800 - expert (Professor, etc). How do I know this? Because I have done
my market research." (NB: at recent conversions, this is $300, $450, and
$600 per day respectively.)
- "The dollar amount I present to the client allows room for negotiation,
but is based on whether I feel having new clients at a higher price is more
valuable to me then keeping the one client at a lower price. This may appear
cold-blooded, but I am constantly updating my client base to people who not
only value my service, but are willing and able to pay fair market value. I
feel both sides will maintain a more satisfactory relationship."
- "I tend to work by having achievable, measurable milestones that are
also decision points for the client because they establish and minimize risk
of taking on the next stage and also set the goals for the next stage. So far
the clients have decided to proceed because we keep making progress."
- "Beyond that, there really are not any barriers, at least in my case. I
usually find little resistance to my new fees. If any thing I weed out those
who really can't afford professional marketing anyway and get only clients
for whom my work will actually make them money because they can afford to
test their mailings and advertising --- something smaller firms often can not
do. Or, worse yet, refuse to do."
- "My internal messages that say don't ask for a high price because
a. You will not get the work.
b. Are you really worth that much?
c. If I work 15 days a year I make more money than my Dad ever did
working a whole year as a meatcutter. He raised 6 kids, I have
raised 0 kids - am I really worth that?"
- "My own Internal Editor, who tells me my experience is not enough or my
quality is not high enough to charge more. This is total bull****, but it's
just that little voice inside."
C) COMMENTS FROM PETER AND HERMAN
There is a real link from internal to external view. The first feeds the
second which feeds the first. Based on the work we have done, we believe that
one secret to being able command the fees you want is to specifically work
with the client to bring the two into agreement. Many consultants do this
with something similar to the 7 Step Process (see postings on this or the
Raise Your Price program. For more information, drop Peter an Email.)
Most of the consultants who responded try to evaluate themselves against
- What the competition is doing, or
- Against their own perception of the value of the work.
However, some intentionally measure themselves against the client's view.
This minority say that they do not have problems with raising fees. Most do
not report issues with competition.
Among consultants who do not report barriers or competition, charging by the
project (not hour or day) seems more common. At the extreme, two consultants
(seemingly at the upper end of the fee range) do not always tell the client
what the price is going to be until they are done. Part of what this group
does is to move the focus from a standard of self or other consultants to a
standard of value recognized (and agreed to) by the client.
There seem to be both "Me too" consultants (I do what others do but I do it
better/cheaper/faster) and "I am special" consultants (No one does what I do
for you because I am different and special: I have and offer a USP [Unique
Selling Point]. A 'me too' consultant can only offer to do what competitors
do and promise to somehow do it better, faster, or cheaper. Maybe a client
will pay a bit more for that and maybe not.
An 'I am different' consultant has a different situation: The client cannot
compare you to competitors because you are unique. But it is up to you to be
unique and thus able to name your own price. You must come up with a USP so
that you are indeed different and special. How do you get a USP? There are
frequent postings on this, but it is something that we clearly need to
discuss in the program.
We asked the fees question to help fine tune the Raise Your Fees program.
From the answers, it seems we have a clear need to address the way
consultants and clients see value. If we understand the value ourselves, we
can help our client understand. This, luckily, can be done systematically.