Don’t build product in a vacuum! The best way to create a product that will…
Are You Leaving Money on the Table?
As an author or a thought leader there are many ways that you can and should offer your content to clients – assessment tools, training, consulting, speaking, products, e-learning programs, coaching – the list is almost endless. The tough part is being able to convert your content into the right modality at the right price point for the market(s) that you serve. Offering your work in the wrong modality or at the wrong price point is an expensive mistake, yet it’s one that I see too often.
First, you need to have a clear definition of what training is and what consulting is and you must be able to share this definition with prospects and clients. Consulting is solving a specific problem for a specific client at a specific point in time based on a variety of data points and circumstances. It is similar to buying a custom made suit. It needs to be made of the perfect fabric, the cut and color are unique to the end user and the fit is tailor made.
Training, on the other hand, is teaching others your model, systems, mindsets, frameworks and methodologies. It’s an explanation of your work to a group in a way that enables them to understand it and see how it might apply to their situation. It’s closer to a suit that you buy off the rack. You still need to make sure the fabric and color are right, but it may not be a perfect fit for everyone.
There’s also a huge middle ground which I call semi-custom training and there are varying degrees of customization of the content. This is closer to buying a suit off the rack and having a tailor modify it to meet your needs.
Now this may all seem pretty obvious and logical, so where is money being left on the table? Money is often left on the table because a client is paying for an off-the-shelf solution and the provider is actually delivering a semi-custom offering or in many instances a consulting engagement.
The burden of determining how to price and position your work is up to you and needs to be done in the early phases of interacting with a prospect or client. By being able to communicate to them what they can expect from an off-the-shelf solution versus a semi custom solution or a consulting gig you are able to manage the expectations relative to the outcomes as well as pricing. Off-the-shelf training solutions should always cost less than semi custom solutions, and semi custom solutions should cost less than consulting services.
What I see happening is that the author or thought leader takes on a client but fails to have a thorough enough understanding of what the client needs or expects. You sell them an off-the-rack suit, yet deliver a custom tailored suit for the same fee. It’s not smart and it causes you to leave money on the table. Even worse, it creates a precedent whereby the client will always expect you to do so in the future. You’ve taken a potentially high profit client and converted them into a low margin client. Ughhhh…
There’s no simple way to avoid this situation but by being able to clearly articulate to your clients and prospects the differences in the offerings you provide (in terms of pricing and outcomes) you’ll gain the buy-in and the alignment you need. It is worth investing a little time upfront with a client so that you can avoid getting into an undesirable situation down the road.
This Post Has One Comment
While it’s true that many experts leave money on the table whether they’re consulting or training or coaching, the problem isn’t providing a custom suit for the off-the shelf price. The problem is starting with (selling) your modalities, methodologies, or processes–your input. The starting points for any well-priced engagement are the objectives of the client and the value to that client of meeting their objectives. The consultant/trainer/coach must establish a peer relationship with the client, and become a trusted advisor. When this happens, the consultant has earned the right to offer options that focus on achieving the client’s objectives and values and attaching a fee communsurate with the value. Then every option is customized, but this doesn’t mean that every modality is customized. If the primary objective is to cause a group of employees to use a new skill, and you have a training program that effectively does this, you supply that modality. If you have to write a new intervention you do that. The fee is attached to the valuable outcome, not to the input.