This week on our podcast (careful, Hebrew) we talked about my now defunct consulting business, which in it’s last year of operation made me hundreds of thousands of dollars at rates north of $200/hour. I got some follow up questions, I’m collecting my answers here.
How do you explain your high rates to customers?
I solve problems for free until there’s nothing to explain and it’s clear to all sides that my cost is much less than their gain. For this method to work, two things are necessary:
- The right pipeline brings in potential clients that (a) have large problems I can solve big time and (b) have enough money to easily spend $50k if it makes sense to them.
- A method which lets me deliver value fast to that pipeline. The key here is deliver not explain. The fast part enables the pipeline’s economics. If it wasn’t fast I couldn’t do it for free, if I couldn’t do it for free, sales would be a lot tougher.
When it works, after one or two meetings the client sees how my work is changing significant outcomes for their business. At that point cost is not an issue as long as they have the money available.
The harder questions are (1) how do you develop the skills to do work that is genuinely worth say $30k/month (2) how do you put yourself in front of people who can use your help and deliver solutions so obviously that hiring you for more solutions is a no brainer.
How do you manage conflicts with clients?
The important thing is understanding that if you have a conflict you’ve already lost, you’re now in damage control mode. When things go well conflict almost never happens. I haven’t had a client conflict in years, and I used to have them often.
If you do have a conflict optimise for ending it. These things can be a real drag and there’s basically no limit on how bad it can get. You’ll also want an agreement structure that makes the option of “hey this isn’t working out, let’s just call it a day” feasible. This means as much time based billing as possible and as little fixed deliverables as possible.
How do you fire a client?
You sit them down, explain transparently why you don’t want to continue the work and because you’re not a douche you give them as much control over the wind down process as possible.
How do you manage your work-life balance?
The best thing you can do is have clients that crazy appreciate your work (first step: do work that is worth crazy appreciating). That dynamic changes everything, you’ll get no pressure from your clients and how you manage your work life balance will be entirely up to you.
If you find yourself thinking “sure, that’s easy for someone who is already established”, I can see why you’d think that but I’d disagree. One always reliable way to do work that is crazy appreciated is really caring about your output. That almost always works and never requires experience or connections.
How do you source customers? Blogging? Talks? High profile projects? Free meetings?
Find ways to deliver as much value as possible to as many people as possible. Nothing sells your services better than actually delivering small portions of it to the right people.
High profile projects are useful, but ideally you want your clients to hire you because you’ve already helped them. They’ve already learned from you, you already solved problems for them through a blog, a talk, a meeting, whatever. At that point, your skills are not under examination. You can’t fake solving someone’s problems.