Now you know what your time costs you, what your competitors charge for their time and skills, and what clients expect to pay for your service. So which figure is right? All and none. What you want is a price that will drive away about 10 percent of your prospects as too high and another 10 percent as too low.

Selling Value

Here's a technique that will make your business more profitable, put your business above your competitors, and keep your clients happy: sell value not price. How can a fancy restaurant charge five times as much as the diner next door for the exact same ingredients? They sell value.

Call it ambiance or image or snobbery or non-price considerations or whatever. The fancy restaurant makes the client's purchase an event rather than just a transaction. The fancy restaurant treats the client like an individual rather than a number, gives extra service, uses finer dinnerware, and prepares the food to look more appetizing.

You'll see the same technique — selling value rather than price — in any competitive business where one firm wants to stand out above the others. Chevys are sold on price, Cadillacs are sold on value — and both are built by General Motors.

Value says that, whether the price is large or small, you will get your money's worth.

The Value of Consulting

So how does a consultant sell value? By establishing pricing based on results rather than time worked.

For example, a marketing consultant may charge a percentage of the client's marketing budget to review, manage, and audit it. A financial consultant could charge a percentage of return on investments rather than an hourly fee. Attorneys often base their fees in civil cases on a percentage of recovery. They may earn 25, 35, or even 50 percent of the recovery — or nothing if they lose.

Depending on your specialization, consider setting your fees based on value. This is an effective way of countering competitors who want to compare hourly rates.

Imagine going to the grocery store and seeing a can of tomato sauce that was discolored and dented. You'd probably pass it by for one that looked neat, fresh, and undamaged. Yet the contents of each can may be exactly the same quality. Appearance does make a difference, especially in the consulting services business.

For just a few dollars more, your business can develop a clean, professional appearance that will tell prospects and clients that you offer quality. Keep your office neat and orderly. Dress professionally. Use quality papers.

Why is your service worth something?

• You're knowledgeable. You know about your specialty and how to perform a valuable service.

• You're efficient. You know how to work smart to get the job done in less time.

• You're honest. You will not knowingly mislead your client or charge for services not performed.

• You're helpful. You want to solve the client's problem and not just perform a job.

• You're fair. You charge a reasonable fee for an important service.

• You're accessible. You respond to questions, answer telephone calls, and follow up with clients.

Successful consulting services don't shun the question of pricing or apologize for high rates. They look forward to the question so that they can explain why their service is worth more than that of other consultants. They sell — and deliver — value.