Skip to content

Value-Based Consulting

Value-Based consulting is when fees are set based on the monetized value created for clients, as opposed to time-based fees.

What is Value-Based Consulting?

Traditional consulting multiplies the time consumed times the hourly rate to arrive at the total consulting fee.   
This creates an ethical conflict for the consultant since the only way for them to maximize fees is to ensure the project takes the longest amount of time possible to finish.
"Fees are money paid to the consultant as equitable compensation for the value delivered with a dramatic return on investment for the client."
Source: Alan Weiss

Value-Based Fees are Set Differently

As the name suggests, establishing a value-based fee requires establishing the monetized outcomes and targeted return on investment to arrive at the total fee.
My Target Return on Investment for Clients is 10x or higher. 
In my practice, there are two variants for calculating fees:

Value Growth Consulting

Monetized Outcome Basis

The monetized outcome for a project represents the annualized tangible benefits plus accumulated intangible benefits divided by the target ROI to arrive at the fixed value-based fee. 
Key Scope Areas:
  • Revenue Growth
    • Implement Measurable Direct Marketing Strategies to Accelerate Top-Line Growth
    • Structure Sales Funnels to Acquire Leads Without a Marketing Budget
    • Maximize the Lifetime Value of Clients
  • Organizational Growth
    • Implement a World-Class Organizational Structure and Technology Stack
    • Decrease the Cycle-Time Required to Implement Decisions
    • Consistently Grow a Leadership Pipeline

Expense Reduction Consulting

Success-Fee Basis

The Expense-Reduction segment of my practices specializes in negotiating contract-based cost reductions on behalf of our clients and billing for a percentage of the achieved savings.
Key Points:
  • Zero-Risk Proposal - If No Savings are Achieved, No Fees are Charged
  • The Focus area is contract-related costs.  Headcount is out of scope for my expense reduction consulting practice
  • Begins with an assessment of the spending footprint for your business by cost category
  • When viable cost categories are identified, a 'Client Engagement Letter' is signed to begin the engagement
  • After the research is performed a 'baseline report' is prepared that defines the current unit cost baseline for future savings calculations
  • Once offers/proposals have been gathered, an 'options report' is prepared and the client decides which engagement option to pursue
  • Once the engagement option has been selected, implementation begins and the savings start


Leave a Comment