A surprising reason to not list your consulting prices¶

As I've shared insights on indie consulting, marketing strategies, and referral techniques, a recurring question from my newsletter subscribers is about pricing. Specifically, many ask if they should lower their rates or make them public.

In this article, we'll delve into the counterintuitive reasons why listing your consulting prices might not be the best strategy, regardless of whether you're aiming to appear affordable or exclusive. We'll explore the potential drawbacks of transparent pricing, introduce more effective alternatives like minimum level of engagement pricing, and provide actionable strategies to help you maximize your value and earnings as a consultant.

Building on the foundation laid in my previous posts about building a consulting practice and using the right tools, this piece will add another crucial element to your consulting toolkit: strategic pricing.

The Pitfalls of Transparent Pricing¶

When I first started consulting, I made the mistake of listing my rates. Here's why that's problematic:

It limits your earning potential: When a billion-dollar company reached out, they were getting the same price as a seed-stage startup. That's leaving money on the table.
It can scare away potential clients: Listing high prices to show exclusivity might deter clients who could benefit from your services but assume they can't afford you even when you can build a different offering, (monthly vs weekly meetings, meetings with vs without research memos, etc)
It doesn't account for value: Your pricing should reflect the value you bring, not just your time, even $11,000 per month started feeling too low.

The Airline Pricing Model¶

As we've discussed in the email course. Instead of fixed prices, think about pricing like an airline:

Economy class: Your basic offering
Business class: Enhanced service with more perks
First class: Premium, high-touch service
Private jet: Custom, enterprise-level solutions

This model allows you to cater to different client needs and budgets while maximizing your revenue.

Want to learn more about implementing this pricing strategy? Subscribe to my email course for a deep dive into pricing models and other consulting tips!

Value-Based Pricing: The Farmer Analogy¶

Consider a farmer who charges based on crop yield, not hours worked:

If it rains more, they don't charge less because they didn't have to water the plants.
If there's a drought, they don't charge extra for the time spent watering.

The focus is on the outcome (the harvest), not the input (time spent). This is the essence of value-based pricing. But there's probably some minimum yield that they care about. It's unlikely you're going to convince that farmer to tend to your roof garden.

How to Talk About Pricing¶

Instead of listing fixed rates, provide estimates for minimum engagement:

"Our typical engagements start at $X over Y months. This ensures we have enough time and resources to deliver meaningful results."

The Power of Discovery Calls¶

Use initial consultations to:

Understand the client's specific needs and challenges
Assess the potential value of your services to their business
Tailor your proposal and pricing to their situation

Remember, you're not just selling your time - you're selling outcomes and solutions.

The key takeaways:

Don't list your prices publicly to show affordability or exclusivity
Use a tiered pricing model like airlines
Focus on value-based pricing, not hourly rates
Provide minimum engagement estimates instead of fixed prices
Use discovery calls to tailor your pricing to each client

By adopting these strategies, you'll be able to price your services more effectively, attract the right clients, and maximize the value you provide (and receive) in your consulting work.

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