Monetization and Fees
This section includes other methods of monetizing your projects other than selling your own products. This may include accepting paid advertising on your site, promoting other affiliate programs, the revenue from your own product sales, etc.
First let’s deal with monetizing beyond specific deliverables…
Value Based Fees
The highest project values are beyond commoditised / specified deliverables such as an event, a website, an ebook, a new process, etc.
As consultants, we are not vendors. Our value is not in ‘deliverables’. Â The notion of deliverables is anathema to consultants.
Our focus is on the ROI through agreeing the project value. Â The highest project values are based on the financial or personal returns that the project owner / organisation will receive.
Where return on investment can be attributed to a project, define the objectives, regardless of mechanism, and charge value-based fees.
Value-based fees are set according to the value contribution that the client receives as a result of the project objectives being met.
Such value-based pricing requires clear business objectives that the client can place a specific value. Â What are the outputs and business results of the possible project?
How will you and the client measure success? Â What metrics can be used? You will have the conversation with the client to find out ‘how will you know that the goals are being met?’
Next is to understand what actual value to the organization and/or buyer the results will have. Â These can be financial values, percentage improvements (try to track these into financial values), or personal achievements (again which should be trackable to promotions or bonuses).
Conceptual Agreement is achieved when objectives, measures of success, and value are agreed by the client without qualification.
This is the basis on which a proposal will be established.
Fees can then be based on an agreed return ratio. Â A value of $750k can command a 10:1 ROI fee of $75k for example. You may decide on a 5:1 or 20:1 fee ratio.
‘I don’t have rates”
Alan Weiss explains “Never cite a daily rate, materials cost, or person charge. Â If a buyer asks ‘What are your rates?”, simply reply, “I don’t have rates. I charge a single, agreed fee once we establish your needs and the scope of the project.”
Requests for Proposal
Be careful to avoid RFP’s. Â These invariably are evaluated by low-level people who put an emphasis on cost savings, not results, and are systems in which you rarely will get to meet the buyer to forge conceptual agreement.[widget id=”ad-continue-marketing”]Ad: continue-marketing[/widget]Instead, become a ‘sole source’ provider. Â As such, competitive bidding is pointless. This requires positioning yourself beyond the competition. Â Plenty of insight is provided for this throughout the 6 elements of the New Professionals Matrix.