Why You Don't Publish Pricing
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You'll have to look long and hard before you find a marketing firm that publishes much, if anything at all, on their pricing. That's been true for years, and only recently are firms experimenting with a little more transparency around the financial aspect of what qualifies a prospect as an appropriate fit. And if they are feeling particularly bold, they might even publish some pricing for a few services that they've packaged up so that they have fairly similar deliverables from project to project.
One good example of talking about money, which we should do as early in the relationship as we can, is Bill Rossiter's new site. Here's the URL where he describes the client he wants to work for, turning the typical sales process on its head by setting the agenda first:
The firm is owned by Bill Rossiter, an extraordinarily knowledgable marketer with years on the client side. He's positioned correctly and he's not afraid to be proud of his expertise, and rightly so. He knows what it takes to make a profit and to make a difference. (Disclosure: Bill is a client.)
I think the wording is non-confrontational, clear, simple, and confident. (I would probably add a few things to it, but that's just quibbling.)
Reasons You Don't Publish Pricing
As I noted, you can't find many examples like that, and I'd like to think outloud with you about why that is. I think there are five primary reasons why this is the case. See if any of them resonate with you.
First, most principals don't really believe that the main purpose of their corporation is to make money. They know that it's probably the right reason the company exists, but underneath it all is the truth: the business is an extension of what they want to do personally. The money is nice, but the work is more important.
Second, principals crave the opportunity to pivot when they finally start talking about money with a prospect. Depending on their financial situation and how far away the next payroll is, they may be willing to compromise on the appropriate price. So if a prospect sees that price first on the website, the principal won't get a chance to compromise. That's good, because more time is wasted chasing unqualified prospects than anything else in new business.
Third, principals think that the sales process is fragile and always subject to falling apart right in front of their eyes if they don't do exactly the right thing. Personally, I think a whack-a-mole approach is more appropriate. When an exciting opportunity pops up in front of you, whack it on the head and see if it comes back. I honestly don't believe there's much you can do to screw up a business relationship that is meant to be. Just remember that maybe it's not meant to be right now.
Fourth, principals are always salivating about that idylic project and the last thing they want to happen is for someone who visits their website to remove their firm from the running because the prospect wasn't planning on spending that much. You know what? Prospects are significantly more honest about their fit with your firm than you are. You are always trying to bend the rules, twist expections, and talk yourself into pure nonsense. Then you get the client and do nothing but complain about what cheap bastards they are.
Fifth, for most firms each project they do is so different that there is no possible way to standardize the pricing and publish it. Everything is new, different, exciting, titillating--and you end up learning on the client's dime because you value variety over expertise. As I've said many times, expertise comes from pattern matching, and pattern matching comes from the repeated application of your expertise to similar situations. In other words, you may not be well positioned like Bill is.
Achieving Greater Transparency
Do you want to be a tad bit more courageous and move toward a more transparent model? Here's what I would suggest, and though there will be moments of terror, these will be smothered by the excitement that comes from the confidence that you begin to build. Remember, you are in business for three reason, in this order: make money; move the needle for clients; create and maintain a great culture. So here's how I'd would move from where you are to where you eventually should be.
First, make sure your positioning is tight. If you fire the client or the client fires you, it should take them months, not days, to find someone with equal expertise. Is that true for you?
Second, start small by crafting a "Diagnostic Package" that you strongly encourage all new clients to begin with. Say a client has $350,000 for a new initiative. Urge them to carve out $20,000 to find out exactly what they need, what it will cost, how long it will take, and how success will be measured. The pricing for this diagnostic should not be tied directly to the number of hours you expect it will take. It should probably be priced at 150-200% of the cost of the hours it will require. And here's the best part: what you are doing is essentially paid prospecting for yourself.
Third, if you are uncomfortable publishing a specific price, publish a range. That still gives you some wiggle room but sets parameters so that you can't lose (as much) money.
Fourth, keep taking your services and consolidate them, incorporate repeatable processes, and develop training materials to help new employees get up to speed faster.
When I started my consulting practice 18 years ago this month, I took a second-shift blue-collar job at an R. R. Donnelley print line running a J. C. Penney catalog trimmer. I knew that if I didn't have an adequate source of income while I built the business up, I'd compromise. After six months I was ready to quit and my appropriate pricing was preserved.
Everybody compromises on pricing. Those who get over it thrive.
