Setting FeesNovember 18, 2009
There are three situations you will face over and over again: those where (1) a common fee has determined the market and you must play the game already established, (2) the price you command is determined by the contribution you can make and (3) you are in demand and your reputation earns you more than you would otherwise be worth – they want you!
Speaking is a good example of the first. If you are brand new, you command $1,000 – 3,000. A rising star gets $3,000-5,000. The seasoned veteran with an established niche: then you are in the $5,000- 10,000 band. Do you have a book that is widely accepted? It’s $10,000 – 15,000 for you. Are you a business star? $15,000-25,000 is your market. And, if you are superstar, celebrity, household name, your price goes up from there.
Business consulting is an example of the second. If you can make $200,000 for your client, you have every right to charge $20-50,000 regardless of how much work is involved. The more certain, the lower a return the client is willing to accept. If they are guaranteed to earn an extra $200k, they will pay you up to $150k. If there is a reasonable chance they will see the $200k, you may only be able to charge $50k. How do you set these fees? You work with the client to determine the worth of your contribution, your ROI. Then, provide a decent return on their investment.
When you are in demand, the third situation, your price goes up by repute. You can find a facilitator in my city for $500. But, when my clients say they want Seth, I can command twenty times that – I have established high value when it comes to running meetings.
Know which market you are in and set your fees accordingly.