CXO

Top consultant says emphasize value, not price, when selling your skills

As a consultant to consultants, Alan Weiss says many in the IT field are selling themselves short by looking at their services as a commodity. Instead, he suggests they focus on the value they offer clients.


When people hear the term “consultant,” they usually think of an all-knowing expert—someone who’s dishing out advice, not taking it.

But Alan Weiss, Ph.D., knows better. He’s renowned in the corporate world as a consultant to consultants, and a mentor and coach to executives. As founder and president of Summit Consulting Group, Inc.—a Rhode Island-based firm specializing in management and organization development—Weiss has advised clients such as Hewlett-Packard, General Electric, The New York Times, Mercedes-Benz, Coldwell Banker, and more than 80 other organizations in four countries.

An impressive resume
Weiss has been touted as “a worldwide expert in executive education” by Success magazine and is interviewed frequently on radio and television to discuss productivity and quality. Along with his consulting work, Weiss delivers more than 50 keynote addresses and workshops each year for major conferences and trade shows. Still, he’s found time to write 13 books, including What Happened to Excellence, Money Talks, Our Emperors Have No Clothes, Making it Work, Managing for Peak Performance, and the best-selling Million Dollar Consulting: The Professional's Guide to Growing a Practice (McGraw-Hill, 1998). In the book, Weiss explains that consultants can attract and retain lucrative contracts by placing emphasis not on cost, but on value.



“One of my clients approached me with the request to design a training program which his company would market through his offices around the world. However, he wanted me to accept a smaller fee in return for a percentage of the sales,” Weiss wrote. “I usually turn down contingency fees…but he hit me from behind. He opened with, ‘Alan, this has nothing to do, and everything to do, with your value. I couldn’t begin to pay you fairly for a fee based on value. Oh, I could pay you $40,000 or $50,000, but your work here would be worth well into six figures. That’s why I want to offer a royalty with no time limit.’”

Weiss continued, “Well, he had me… It was one of the few instances in which I’ve done work for ‘a piece of the action.’”

A conversation with Weiss
I spoke with Weiss recently and heard more of his valuable observations. Here are the highlights.

TR: What made you want to go into consulting?
Weiss: I was president of a consulting firm and I got fired. When you get fired, you either get destroyed or you get angry. I got angry and I decided I would never work for anybody again, that I was going to be my own boss. And in this profession, the only way you really get wealthy is to own what you do, not to be an employee. A lot of IT consultants are out there because they want to be their own boss, they want to be independent. They’re taking the risks that are inherent in this job but they’re not reaping the rewards. So when I got fired I decided I would build relationships and only charge for value, never for time. It’s 15 years later, and I never looked back. I run a seven-figure-a-year practice out of my home.

TR: Why do you think “Million Dollar Consulting” has been so popular for so long?
Weiss: So many more people are going into consulting because in the nineties, downsizing forced people out of work and made them not want to be dependent upon others anymore. In the IT world and as technology grew and start-ups proliferated, there was a need for more people to do specialized work. And it’s a very lucrative field, so people who are in consulting wanted to learn how to do it better, and people who were entering the profession needed to learn everything. And there are so many myths about the profession, so much bad advice out there, that I think Million Dollar Consulting succeeded because it cut through all the nonsense.

TR: Tell me a little about your upcoming releases.
Weiss:Getting Started in Consulting (John Wiley & Sons) was released in June. The publisher asked me to write a book that would take people from a standing start. It talks about everything from the kind of equipment and office you should have, to creating a marketing plan so people start to recognize that you’re there, to the best way to create a gravity that attracts people to you. It helps people avoid the common mistakes of this business, like billing by the hour, mistaking who the right buyer is, and spending too much money or not enough in certain areas. It really takes the reader through a methodical process to get up and running as a consultant rapidly and start deriving business fairly rapidly.

Jossey-Bass is the publisher of The Ultimate Consultant, which will be released in the fall. They asked me to write a series of books that would be the library for sophisticated consulting. This is the first book in that library and the other six will be spinoffs from that. It tells people how top-flight consultants act.

All of my books are written irrespective of a consulting specialty. They’re written from a process point of view: Here’s how you attract customers, no matter what kind of consulting you do.

Advice for IT consultants
TR: Would you advise IT consultants about their careers differently than you would individuals in other consulting fields?
Weiss: I’ve had a lot of contact with IT professionals because as I do consulting seminars around the country, more and more IT people show up in them. IT consulting is different in this respect: Consultants in that field have educated their buyers all wrong. Too many IT consultants act as if they’re plumbers, carpenters, or electricians. They come in to do a specific thing and they leave, so the client just sees them as a commodity. You pay the electrician $65 an hour and you pay the IT consultant $80 an hour; it’s the exact same principle.

Some of them have been smart enough to realize that they have to take what they do and turn it into a business result. That is, showing the client the connection between what they’re doing and the improvement of the client’s business, and that’s worth a lot of money. If you’re just going to fix a piece of hardware, write a program, or fine-tune the knowledge management systems, that’s a commodity approach. But if you walk in and tell the client, “We’re going to enable your sales people to have better competitive data right at the point of contact with the prospect,” that’s a highly valuable business outcome. And there aren’t enough IT consultants who can look at what they do with that range. Too many of them are simply immersed in their specialty. Too many of them also think that if they’re an expert in IT, that’s enough. But it’s not… because this is the marketing business. They need to become better strategists, have a better business model, and approach the prospects with a whole different mental set. If they’re worried that the guy down the street is charging $95 an hour and they need to charge $85 to get the contract, they ought to be out washing cars.

TR: Will IT consultants, who generally need a staff to perform the work, have the same satisfaction you’ve achieved from working virtually on your own?
Weiss: Yes, I think so. I have a mentoring program I’ve been running for four years, and a variety of IT consultants have been through it. You can get gratification from a lot of different aspects of the profession. The key is that you set up your practice—whether you work alone from home or have a big staff and an office—you charge fees consummate with the value you deliver, and that’s how you get wealthy. You don’t have to go to the Fortune 500 companies for that. You can work in the small market, the midsize, in education, nonprofits, whatever. But they should be charging for the value that their work brings to their prospect, that’s the difference.

IT consultants tell me, “Everybody else is charging by the hour, so I have to, too.” If you’re going to do that, you’re never going to be successful because your strategy is always going to be determined by somebody else. You have to be willing to step apart from that and educate your clients in a different manner. They need to be able to talk to the client in business terms, not technical terms. Once you just talk about technical terms, you’re seen as a techie and you’re relegated elsewhere in the organization. And that’s death.
Alan Weiss will offer further expert commentary at TechRepublic. Revisit the IT Consultant Republic in the coming weeks to read his columns on influencing clients’ decisions, dealing with brokers, easing around budget constraints, and much more.To send us suggestions for future article ideas, please drop us a note.

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