When people don’t want to pay for consulting

By Patricia Egen • February 27th, 2013

Once again we are sitting around the business “camp fire” discussing why people think it is not fair when we say we charge for answering questions. We are a consulting firm. That’s what we do. The advantage we have over other support numbers is we know the answers quicker so it may take someone 1 hour of waiting on hold for a support person who “may” know the answer when we answer the phone immediately (usually…) and have the answer within 5 to 15 minutes or less. So, they are already ahead of the pack by getting their answer quickly. So, why are they not willing to pay. This is not everyone mind you. But we have been very good about answering quick questions for free and I realized that people were taking advantage of that and less money was coming in the door.

I figured it was time to change that and remember that what we do is consult and we don’t do that for free. What is happening now is a few of our clients are going through sticker shock when we say we can answer the questions but not for free. I just don’t get why that upsets some people. When you go to the doctor, is if free? When you talk to your lawyer is it free? Of course not. We are not an exception. The main problem is we set a precedence and are now trying to fix that.

The same problem may happen to you in your business. Costs are going up for almost everything. Production costs are skyrocketing. It takes more to make less. So, you probably need to raise your prices for services or products as well. This is where it becomes an art at learning how to manage the “we are raising our prices” dance. Because in essence that is what we are doing. We are just raising them from free to for a fee.

Trust me, I know this is a hard thing to do during lean times. They say we are coming off of the recession, but if we are, it’s happening slowly. People are looking for anything that costs less or is free. While it was tough we were trying to help by answering calls and fudging when we sent out a bill. That has to change.

Now I am working with my crew to help them understand what is sales and what is consulting. That’s where it gets the most gray. It’s the which comes first thing again – when we advise you on what to do is it consulting? Is it selling you on what we know? This is a tough thing to understand and to teach. When you sell a specific product it’s a lot easier. What we sell sometimes is answers to questions and our knowledge.

And that’s basically what this is all about. Getting paid for what you are worth. What we bring to the table is knowledge and expertise. We bring value in having the right answers. We save time by getting the client to the end result. And that should be worth some money, right? So why is it so hard for some people to understand? It won’t be answered in this blog. I actually went out on Google searching for some insights and found even more questions and discovered it’s a common problem, especially when the economy is tough. Since we are being aggressive in this move, I am assuming I may lose some customers. But I ask myself were they customers I wanted. My customers know we are nice people. They know we want to help. The good ones will understand. I have payroll and business expenses and need to eat too. This is a decision we have to stick by. Our loyal customers will know that and move with us. Time will tell.

Comments

At Xact Software we are thinking on introducing coupons to the value of one service unit (up to 15 minutes). We provide 1 or 2 free redeemable coupons when a customer takes up training as part of a complete CRM project. That gets people into the mode of valuing service, you simply ask for their coupon number at the next service request or if they have run out would they like to purchase a 6 unit coupon bundle at a 6 for price of 5 discount.

By Patricia Egen on February 28th, 2013 at 7:55 am

Nice idea Graeme. Interesting approach.

 

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