The Myth of Low Priced Consulting

When I first started offering consulting?services, I charged $100 to get a hour with me.

After all, I had plenty?of?time in my schedule. Plus that could turn into a client paying much, much more. Heck, I reasoned that $100 an hour was $200,000 a year, which would let me live like a star, since my expense base was a Toyota Camry and a 2 bedroom apartment in Dallas.

The?consulting sessions would often go over, since clients were eager to ask questions and I was eager to answer. I was on a high after each session, since I knew?the?client was happy and that my advice was spot on.

But a couple weeks later, I'd not hear back from them. They had moved on to some other shiny object and needed re-explaining?of?the?points we covered. This felt like pulling?the?scab off an already healed wound.

Some?of?these $100 clients would turn into $5,000 and $20,000 projects-- which also caused me to want to celebrate.?You know?the?feeling.?And it would make me want to bring in more $100 consultations with?the?thinking that if I kissed more frogs, I'd get more princes.

Yet after doing hundreds?of?these, I realized that I wasn't properly tracking my time. Sure, I made $100 during that one hour.?But what about all?the?back and forth in social media, email, scheduling, sharing?the?recording, follow-up after?the?meeting, and?the?"one quick question" they had later??What about?the?marketing I had to do to generate these leads-- speaking, posting on LinkedIn, social media engagement, updating?the?website, ads, and so forth.

My true cost was 8-10 hours for that one hour consultation.?So my time was effectively worth $10/hour.

No wonder my bank account was barren at?the?end?of?each month.

So I raised?the?price to $1,500 for my "Power Hour".

At first I was afraid that people would mock me-- "how could an hour with Dennis possibly be worth $1,500?" And there were a few folks here and there who said this. To which you respond, "If we're not solving a problem that's worth at least $10,000, then you're right--?the?Power Hour doesn't make sense."?Or another good response for us to remember "I'm not right for everyone".?Since after all, if nobody is declining your offer, your price must be too?low.

The?$100 consulting call is almost as bad as?the?"let's hop on a free 15 minute call to see if we're a fit", which most consultants use.?This can work if you can keep it just to a qualifying call and if you have a clear offer to sell them into-- usually at least $2,500 one-time or $1,000 a month.?

I see a lot?of?experts out there who don't realize they can charge north?of?$500 an hour-- whether it's selling time or if it's your internally calculated rate from dividing how much time it takes for you to deliver versus?the?cost?of?your package.

I see?the?pros multiply their effective rate by doing these things:

• Having a group coaching layer between?the?low?ticket (book or lead magnet) and?the?high ticket (one-on-one private "VIP" access to you: if you have 20 people in?the?group, your effective rate is up to 20 times higher. Seems weird that people will pay as much to be in a group, but higher caliber clients are used to this.
• Hiring one or multiple virtual assistants to handle everything except?the?coaching: think?of?it like you being?the?typical dentist who spends only 5 minutes with each patient, bouncing between rooms-- while?the?various dental assistants, dental hygienists, support staff, and front desk handle everything else.
• Packaging up your offerings: So you're not selling an hour?of?your time (since all meetings seem to last an hour for some reason), but should be based on a result.?The?higher ticket sales are on?the?transformation you provide.?And they'll actually pay more if you can do it in 1/3rd?the?time-- which would hurt you in an hourly or retainer model.
• Publishing a book, evergreen webinar, or other thought leadership: But not because you want to reach more people.?No, this is to DISQUALIFY?the?people who would otherwise try to get you on a call.?People can't "pick your brain" for free, but you can freely share your knowledge in pre-recorded content. And you explicitly state on those landing pages, your criteria for successful clients-- before ever getting on a call.

Raising rates is one thing-- but this strategy shift to value and qualifying clients is how many?of?us have made it to?the?next stage-- to go from expert consultant doing one-off projects (each one different) to having a machine that operates for us.??

The?super successful coaches nearly all implement this standard 3 tier model-- to?the?point where I gasped that they must all be following?the?same playbook. And?the?funny thing is that they are, which is why you should be learning from folks like Mary Henderson how to build your personal brand and turn it into a money machine for you via a coaching program.