View
215
Download
0
Tags:
Embed Size (px)
Citation preview
Improving Organizational Performance
Assisting organizations learn
why and how to continually improve
their effectiveness and efficiency
Misty River Consulting
Maximize Your Incomeand
Client Retention
By Donald A. Kerper
Misty River Consulting
www.mistyriver.net
Main Theme
Providing Superior Value Drives
Increased Revenueand
Client Retention
By Donald A. Kerper
www.mistyriver.net
What You’re Selling
Benefits - Your core product is the benefitWood Pile – split and stacked nicely
Product/Services -Items that provide the benefitSharp axes and hardworking respectful workers.
Augmented Product/Services- Additional but non essential & value enhancing features or benefits that accompany the Product/Service
Cleans the yard of wood chips,disposes of small useless pieces of wood,
places spacer under wood pile to facilitate wood drying, etc.
By Donald A. Kerper
www.mistyriver.net
Point #1
Contractual Fee Alternativesand Impact on Perceived Value
Small consultancy’s have a variety of contractual fee alternatives to choose from that vary in their utility to create a perception of value.
Select the alternative that has the best opportunity to facilitate the creation of perceived superior value.
Doing what is inappropriate harms that perception of value.
By Donald A. Kerper
www.mistyriver.net
Contractual Fee Alternatives
• Time Based Arrangements
• Event Based Arrangements
• Project Based Arrangements
• Retainer Arrangements
By Donald A. Kerper
www.mistyriver.net
Time Based Arrangements
Hourly or Daily Fee Focuses on Efficiency of Time Based Revenue Generation
• Hourly Work - Undefined or Specific Project
• Daily Work - Undefined or Specific Project
By Donald A. Kerper
www.mistyriver.net
Time Based Arrangements- Advantages & Disadvantages -
• Advantage – You are paid for your time
• Disadvantage – Difficult To Emphasize Value
By Donald A. Kerper
www.mistyriver.net
Event Based Fee Arrangements
• Event Based Arrangement Focuses On Clearly Stated Objective With A Definitive Start & End.
• Pricing Options– One Price for Event
– Price Per Event Participant
– Minimum Price for Event with Upside Growth
By Donald A. Kerper
www.mistyriver.net
Event Based Fee Arrangements- Advantages & Disadvantages -
• Advantage– Simple
– Can Leverage Value To Some Degree
• Disadvantage– Can Suffer if Fee Linked to Number of Participants
– Has Definitive End Point
By Donald A. Kerper
www.mistyriver.net
Project Based Fee Arrangements
Project Based Arrangement Focuses On Clearly Stated Objectives That Can Have Real ROI’s.
• Specific Project – One Price plus Expenses
• Specific Project – One Price
• Specific Project – % of Return
By Donald A. Kerper
www.mistyriver.net
Project Based Arrangements- Advantages & Disadvantages -
• Advantage– Simple
– Measurable Return on Investment
– Can Leverage Value
• Disadvantage– You are accountable for the outcomes
– Scope creep very difficult to avoid
By Donald A. Kerper
www.mistyriver.net
Retainer Fee Arrangements
• Retainer – One Price for Estimated Work Within A Specified Time Period
• Future Work Charged Against This Fee• Non Refundable
• Retainer – One Price for Specified Time Period
• Creates Availability not Work• Future Work Is Additional Fee
By Donald A. Kerper
www.mistyriver.net
Retainer Based Arrangements - Advantages & Disadvantages -
• Advantage– Simple
– Provides Ease of Mind for the Consultant
– Can Leverage Value
• Disadvantage– If something better comes along, you are not available
– If client doesn’t use you within the specified time period, you might not be considered in the future.
By Donald A. Kerper
www.mistyriver.net
Point #2
Use the Contractual Fee Alternative That Provides The Highest Degree of Utility
• Example #1– Large scale organization change initiative should not be
time and materials; it should be a project
• Example #2– A single workshop on Action Planning should not be
time and materials, it should be an event that has a set fee and extra fees for session size larger than some maximum threshold.
By Donald A. Kerper
www.mistyriver.net
Point #3
Transitioning to and SolidifyingValue Based Fee Structures
The Goal:
- Be Perceived As The Provider Of Superior Value -
By Donald A. Kerper
www.mistyriver.net
The Definition of Value
Value = Benefits – Cost
Superior Value =
The Value You Provide >
The Value Your Competitors’ Provide
By Donald A. Kerper
www.mistyriver.net
Creating The Perception of Value
• Avoid Hourly or Daily Work Like the Plague• Always search for the true need – not the stated need –
from the accountable manager (not the HR or purchasing manager).
• Collaborate with and gain consensus with the client on the project objectives, key measures of success, potential strategies of action, etc. prior to proposal creation or fee discussion.
• Work with the client to determine the potential return for the project proposed.
By Donald A. Kerper
www.mistyriver.net
Creating The Perception of Value
• Create a proposal that emphasizes the value being provided and that deemphasizes the cost of the project.
• Emphasize that the project’s cost are an investment that has an expected return.
• Insist that the client setup and review the key measures of success themselves – not you.
• Insist that the client track the return on investment from the project, not you!
• Guarantee your work.
By Donald A. Kerper
www.mistyriver.net
Creating The Perception of Value
• If the project implementation is actually not achieving the agreed to objectives, change the implementation strategy or plan and reimplement without additional cost, if possible.
• Include other work as needed to keep the initial project on track without additional cost to the client if at all possible.
• Think of and behave like this project paves the way for many new future projects with the client.
• Turn down business that is not value based in nature.
By Donald A. Kerper
www.mistyriver.net
Creating The Perception of Value
• Ask Clients To “Brag You Up” with members of their networks
• Write Articles and Get Them Published – That Impresses People
• Write A Book and Get It Published – That Really Impresses People
• Become A Celebrity – People Pay To Rub Shoulders With Celebs
By Donald A. Kerper
www.mistyriver.net
Creating The Perception of Value
- Bottom Line -
Focus on maximizing the value that your client is getting from you
– Do not focus on minimizing your costs
– Do not focus on charging for services provided that are outside your contract scope unless absolutely necessary.
By Donald A. Kerper
www.mistyriver.net
Clients Have Choices- Respect That and Leverage It -
• Clients, like any customer, have the right to choose• Clients will choose that which provides the most
value and/or ROI• Clients will continue to return to “The Well” that
provides the most “perceived” value to them• Be the Best Value Delivery Consultancy!
By Donald A. Kerper
www.mistyriver.net
Conclusion
Small consultancy’s have a variety of contractual fee alternatives to choose from that vary in their utility
depending on the situation.
Use The Alternative That Best
Provides Superior Value For You
and Your Client!
By Donald A. Kerper
www.mistyriver.net
Donald A. Kerper511 South Vine Ave.
Marshfield, WI 54449Phone: (715) 387-0718
Email: [email protected]: http://www.mistyriver.net
For updated presentation notes, go tohttp://www.mistyriver.net/IMCnotes
Misty River Consulting