Value-Based Fees: How to Charge—and Get—What You're Worth: A Guide for Consultants, Second Edition

4.1. CONCEPTUAL AGREEMENT: THE FOUNDATION OF VALUE

Consulting is a relationship business. Trust is essential to relationships. When a buyer trusts you and you trust the buyer, you are in a position to acquire the three essential building blocks for a value-based project:

1. The business objectives to be met

2. The metrics or measures of success to assess progress

3. The value to the client of meeting those objectives

NOTE

A relationship with an economic buyer is always the first step in a value-based project. You don't need anyone else, but you can't make the sale with anyone else either. It's that simple.

That's it. That's all you need from the client to set a fee based on value. And you can only obtain that from the economic buyer. The sequence here is simple and straightforward, but also ineffable (see Figure 4.1).

As you can see in the figure, our marketing efforts create leads, which we pursue and qualify to find the true (economic) buyer—the person who can write a check for our services. We then establish a relationship with that buyer so that we can gain conceptual agreement about the three criteria above. Without the economic buyer, the discussion is irrelevant; without a trusting relationship, the important information is unlikely to be shared; and without conceptual agreement, we are unable to establish the value as perceived by the client, which is the key input to determining our own fees.

Figure 4.1. The Value-Based Fees Sequence.

One last time, then:

• Objectives: Business ...