A few months ago I had a rant of sorts on consultants and professionals that bill for their time. Here’s an excerpt from that February 1st post:
Without malice, I´m fed-up with the consulting business and countless consultants and industry gurus — frustrated with most everyone that bills by the hour or sells tasks in the form of business solutions for that matter. To me, billing for your time is placing value on the least common element of your worth.
My problem with consultants is they too often talk about customer focus and selling benefits of their services, while in reality they really want to sell you their tasks — sales training, web development, MARCOM, market research, strategic planning, seminars, workshops, information products, etc. They want to sell their time.
To a customer, time isn´t what they want to purchase or what they value in the least. A customer wants to purchase the work-product and the promised results of the consultant´s efforts, not the working hours of a professional. Work-product has the greatest value and ultimately demands the greatest fee. Billing hours or selling tasks is not only placing value in the wrong place, it´s an environment for abusive billing and unwarranted recommendations.
I bring this subject up at this time for two reasons:
1. I’m more convinced than ever the next great opportunity in professional services is value-based billing. In my own business, we don’t bill for time – never have, never will – and the results are impressive, both for us and our clients. Billing customers based on results, defined from their business purpose, is a Win-Win business proposition that creates fierce customer loyalty and ultimately more revenue for both the customer and consultant. Once your combined goals are aligned, the opportunity for mutual success increases.
2. My one-time customer, turned friend and business partner, Richard Hall, and I have agreed to co-author a book on the bane of the billable hour and the great opportunities that flow from value-based billing. We’re beyond the talking stage so, it seemed appropriate to mention it here. We’re mixed on having a Red Couch – don’t be surprised if we do or if you never see one 🙂
Richard is a thought leader on the billable hour as it relates to the profession of law. As a one time litigator, Richard found a business 11+ years ago to analyze, categorize, benchmark, and report on legal services. His company´s services are sold to F1000 legal departments and their public sector counterparts.
In the absence of a Red Couch, I’ll give periodic updates here on our progress in publishing our book.