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Why Clients’ Budgets Have Nothing to Do with Your Pricing

Jot this down on a Post-It note and pin it to your monitor:

A client’s budget has nothing to do with my pricing.

Truth is, start-up founders and people who work in the corporate world typically aren’t educated on what consulting services cost. 

In fact, consultants’ prices are not apples to apples with employees’ salaries.

  • Consultants bring deep expertise to the table.
  • Consultants don’t have healthcare, vacation days, bonuses, wellness, education, equity, training, and other corporate perks bundled into their compensation.
  • Consultants offer flexibility that employee arrangements do not.
  • Consultants incur business expenses that employees do not.

This is why I advise not asking clients “What is your budget?” to inform your pricing.

Yes, the client may have a number in mind or a set budget to work with. However, this number is not always aligned with the rates you charge. 

Also, that number can magically change if they are convinced you’re the person for the job. (I’ve seen it happen hundreds of times.)

Your goal?  Ask the right questions during the discovery phase to get to the true value of the deliverable. 

Questions like:

  • Why did you agree to meet with me today? (or Why did you reach out to me?)
  • What’s keeping you up at night?
  • What’s your goal in working with a consultant on this project?
  • Why aren’t you able to achieve this goal with the resources and talent you already have in-house?
  • What do you stand to gain if we move forward in working together and this project goes exactly as planned?
  • What do you stand to lose if you do nothing/take no action?
  • Why is this important for you right now? 

This line of questioning helps get to the true value, something companies aren’t always aware of when they ask for services like new branding, PR, operations advisory or fractional CFO support.

Once you help the client understand the value of what they’re asking for, they will likely see that whatever number they had in mind was way off. 

To easily segway into the pricing conversation, you can simply say:

“Projects like these typically start at $35,000 and can go up to $65,000 depending on the complexity and duration of the scope. If this range works for you, I’ll go ahead and draft up a formal proposal.”

Then pause, even if awkward, and wait for the decision-maker to either give you the ok to move forward or push back if it’s way out of range. 

If they push back, resist the urge to justify your pricing and instead say something like:

“Why aren’t you willing to invest $65,000 for a project that you’re planning to receive a $2M return on?”

Or

“You just said that you stand to gain $2M in additional revenue if this is done right, and that you don’t have the resources in-house to take this on. If bringing on an expert like me will get you to your ideal ROI, and the investment is only 5% of the total end goal, doesn’t that make financial sense then to move forward?”

And remember this:

Always believe in your pricing. Because if you don’t feel conviction about it, the clients certainly won’t either.

Erin Halper

About the Author

Erin Halper is the founder and CEO of The Upside and the leading authority on independent consulting. Since launching The Upside in 2017, Erin has helped thousands of professionals transition from corporate life into consulting to achieve flexibility, autonomy, and a renewed sense of purpose in their careers.

Erin has been a frequent speaker at Columbia, NYU, Harvard, and Brown and has been featured as a leading future of work expert on dozens of podcasts as well as in Forbes, Business Insider, Nasdaq, Crunchbase and many more.

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