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Answer Upon - The Inherent Lunacies of Commonly Used Pricing Techniques in Service Businesses
“A business without a sign is a sign of no business”. This is an advertising banner or quotation that can be seen in large billboards along the roads and on the side or top of buildings that are vacant. In Television and radio they might say, “This program would not be shown or be heard without advertisement”.It is no different with internet your business needs to be advertised in other words be seen.Most Business owners understand how important advertisement is. It is thru this manner that they would tell others that they are selling some products and offering services. If they didn't advertise then they would not have sales, which in turn gives them profit to stay in business. So most people can understand the importance of advertising and spending money doing it.However, there are people who would try to steal money from advertisers and business owners by offering cheap advertisement packages and not delivering the agreed service. Business owners and advertisers should be informed of this because they would become victims of advertising scams.The scam here is when the advertiser has paid for these different kinds of services but none or some of them are not really even performed. The main point to consider here is to whom is the advertiser transacting with. To avoid being ripped off doing a background check by doing the following will help reduce your risks of being scammed.* How do you contact them can you call them, do they have live support or is it just email used. If it is just email I would be a little weary.* Where are they going to place your ad? If your selling womans shoes you certainly don't want them advertising in the automotive section.* Find out past successful projects as evident by customers comments and testimonials. Even contact those clients because they normally have there web address advertised. See what they say about the site.* Trust your instinct if it sounds to good to be true like 1,000,000 visitors for 19.95 it probably is.Then we have the pay-per-click ad campaign this is when an advertiser would pay a certain agreed amount by the search engine developers every time a user clicks on that advertisement. This was a good idea before it was not touched by hackers who developed a certain program to automatically click on that advertisement which increases the amount to be paid by the advertiser. The next paying scheme was the “pay per action”, which is harder to hack since the
Fixed Fee With Exposure Opportunities
This is when clients say "Although we pay you only peanuts but you will get millions of dollars worth of media exposure." This is retarded.
Imagine going to Safeway (Grocery store chain in North America, the UK and maybe elsewhere too) and refusing to pay full price, arguing that "I offer you exposure by carrying my groceries in your shopping bags". What do you think would happen? The cashier would call the nearest lunatic asylum to book me a place.
Push back to buyers and tell them that unless they only want "exposure to value" not the value itself, they had better cough up the dough. Imagine, you go to a restaurant starving, order teriyaki elephant tail, and the waiter does a nice PowerPoint presentation on how teriyaki elephant tail is cooked. Then he happily brings you your discounted receipt. You have just been exposed to value but did not get it. You are still starving. How would you feel? Still starving? Then wa
How do automotive detailing companies start? What makes them work and how do they grow? How do they choose which services they will offer? This is an interesting case study about a test market of a franchise company in the cleaning business and how they went about setting up Auto Detailing Shops. It maybe of interest to your business study and research; I am familiar with this story because it is one of the companies that I founded.It all started in Reno, NV where we had set up a mobile car wash franchise of the Car Wash Guys for a franchisee there. www.CarWashGuys.com . Because we have significant market share in Reno NV, we wanted to expand into different lines. So we looked at co-branding with Ziebart, yet their corporate culture did not mix with our Entrepreneurial Fiber and the cost of their franchises were quite high. On top of that they had sold so many franchises in the US, there would be a problem later if we decided to roll out our system nationwide or continue buying their units to expand with our current franchisees, still we felt this might be worth pursuing. So instead going thru all the mistakes, which had already been learned we wanted to buy into a proven system and wanted to exhaust this possibility first. They turned us down. So we have decided to take the market, city by city. But first we needed to establish a prototype unit and this is where our Reno Franchisee came into play. Ziebart instead of partner would become a challenge, as they had 216 units already up and running. We visited many of their locations including Hilo, HA at the time.We decided we would put in co-brands at car washes as well, express detail centers. Also at Park and Flys and High End Parking Structures. These permanent Detailing Centers would provide a wide array of services. We are detailing for large dealerships, adding oil additives, which are guaranteed by Lloyds of London for 100,000 miles, bed liners, gold plating, window tinting, auto accessories, pin striping, Gold Plating, Dent Repair, Windshield Repair, Wood grain and Interior Paneling, Vinyl and Leather Repair, Paint Touch-Up, Engine Steam Cleaning, Rust Proofing, Odor Elimination. The business plan is extensive, and the training intense.We determined to be able to handle all the services we wished to provide the Centers would have to be 8 bay Detail Shops the largest of all organized Detail Shops. By having other WashGuy.com franchise systems customers to draw from there would be enough customers to
While some of these fee-setting methods are good for certain situations, some of them are plain duds and can land you in really nasty situations.
So, let us review here some pricing methods service professionals use, and we look at both the pros and the cons of each method. Some methods are great but the problem lies with their interpretation.
Let's start with a common belief. Many professionals guarantee results and try to use this guarantee to entice clients from competitors. This is the same as guaranteeing to your spouse that your marriage is for life and nothing can end it except death.
So, the essence is that we cannot promise definite outcomes, unless we control every aspect of the client relationship. And there are just a very few professionals who can do that. They are gravediggers, embalmers, autopsy doctors, and other professionals whose clients are fairly cold and fairly horizontal. When I was a gravedigger and embalmer, I was in charge and my clients were pretty passive. They gave me the right to make key decisions.
Personally I believe it is unethical to guarantee outcomes when you work collaboratively WITH clients.
It may work a bit better when you work as an outsourced labourer and are expected to produce results FOR your client.
So, let's see these fee-setting methods.
Flat Negotiated Fee (Project Fee)
In this method professionals usually calculate how many hours it will take to do the job and how much you have to fork out on materials, and quote a price accordingly. But from the client's standpoint the "I run a team building workshop for you" is as useful as a chiropractic clinic en route to the gallows. Clients want to reduce talent attrition, boost sales (strategy) and the way (tactic) to achieve it is improving team performance. But how you improve team performance is absolutely irrelevant. If it is a workshop, be it a workshop. If it is removing some team members, that is fine too. If it is feeding them some pancakes, that works too. The means are irrelevant as long as they are legal, moral and ethical.
If you can say that that let's work together to reduce annual talent attrition by 25%, that is a valuable proposition. Can you see the difference? If it takes 10 minutes to remove some prima donnas from the team and improve performance, why the cricket would you bother to run a workshop? The real performance improvement takes place right after removing the troublemakers.
You can't improve the overall performance of the fire brigade by running workshops on the physics of fluid dynamics. Hey, they don't need to know that aspect of water.
Since this approach is about working hours, there is a tendency to include heavy reports and tonnes of unnecessary memos in the agreement.
Monthly Retainer
There is a huge misunderstanding here. For many service professionals, retainers mean a certain number of hours of pre-paid manual labour. However, I believe that buyers use service professionals for what they know, that is, brain power, and not for what they can do in the form of manual labour (brawn power).
Just imagine a financial advisor. She takes care of your assets for a certain annual fee, but if you try to convince her that "Hey, I'm too busy, here is some money, go to the bank, stand in the queue and pay off my VISA card, since I pay you anyway", she may recommend you a check-up from the neck up in the local mental hospital.
Also make sure you get paid in advance and provide unlimited access to you. You also have to stipulate who exactly has access to you. There is no point in charging one single fee and allowing a whole corporation to call you whenever they need your help.
Again, your retainer is compensation paid to you for access to your smarts and talents for a pre-specified period of time. The retainer is not a pre-paid hourly rate that is drawn against as dispensed billable time. You are not a human vending machine.
There is no project in retainer agreements. There are no specific objectives. The emphasis is on having access to your smarts and counsel. The value of the retainer agreement is not a function of your physical presence either. It is the client's responsibility to contact you whenever your advice is sought.
Fixed Fee With Exposure Opportunities
This is when clients say "Although we pay you only peanuts but you will get millions of dollars worth of media exposure." This is retarded.
Imagine going to Safeway (Grocery store chain in North America, the UK and maybe elsewhere too) and refusing to pay full price, arguing that "I offer you exposure by carrying my groceries in your shopping bags". What do you think would happen? The cashier would call the nearest lunatic asylum to book me a place.
Push back to buyers and tell them that unless they only want "exposure to value" not the value itself, they had better cough up the dough. Imagine, you go to a restaurant starving, order teriyaki elephant tail, and the waiter does a nice PowerPoint presentation on how teriyaki elephant tail is cooked. Then he happily brings you your discounted receipt. You have just been exposed to value but did not get it. You are still starving. How would you feel? Still starving? Then wat
Advergaming is an interactive advertisement—a video game that promotes a certain brand, company, or product. There are several different ways marketing and gaming come together. One way works a bit like product placement in the movies—a product appears in the graphics of a game. For example, there might be a Toyota banner at the stadium in EA Sports’ Madden NFL. Before the rise of the Internet, some companies gave away games on Floppy disks or CD-ROMs with their product—for instance, General Mills cereals used to come with General Mills All-Star Baseball, where the company’s cereal mascots played against Major League baseball stars.Today, advergaming has taken on new life online. Companies from Orbitz to Life Savers have well-known online games that promote their brand and encourage traffic to their sites. Here are some reasons why advergaming is so effective—and why it could bring some serious traffic to your site.Because a good game is addictive. An addictive game doesn’t have to be complex and expensive to put together—but it will keep people returning to your site over and over. The right game can get consumers obsessed. And the more they come back to their site, the more likely they are to buy from you, not your competitor. An addictive game keeps people coming to your site even when they don’t have a need for your product—so your name is at the forefront of their minds when they do.Because a lot of people get bored at work. Think about how many people work in an office with a computer and online access. Then think about how many of those office workers get bored and need something to pass the time. Managers won’t like to hear it, but a lot of people do play games like Solitaire and Minesweeper at work when things are slow. Every one of those people is a potential fan of your advergame. Bring them something fun, addictive, and easy to minimize when the boss walks by, and you could win a lot of people over.Because promotional games cause customers to seek out your ads—not avoid them. Our culture is saturated with ads. And advertisers may hate to hear this, but consumers don’t generally like them. When it comes to online ads, people have very little tolerance—pop-ups, pop-unders, and flashy banners are almost universally disliked.Many online advertisers are reduced to chasing consumers down and making it difficult for them not to look. They hide the “close” button on a pop-up; camouflage it so that when people click to close the ad,
Personally I believe it is unethical to guarantee outcomes when you work collaboratively WITH clients.
It may work a bit better when you work as an outsourced labourer and are expected to produce results FOR your client.
So, let's see these fee-setting methods.
Flat Negotiated Fee (Project Fee)
In this method professionals usually calculate how many hours it will take to do the job and how much you have to fork out on materials, and quote a price accordingly. But from the client's standpoint the "I run a team building workshop for you" is as useful as a chiropractic clinic en route to the gallows. Clients want to reduce talent attrition, boost sales (strategy) and the way (tactic) to achieve it is improving team performance. But how you improve team performance is absolutely irrelevant. If it is a workshop, be it a workshop. If it is removing some team members, that is fine too. If it is feeding them some pancakes, that works too. The means are irrelevant as long as they are legal, moral and ethical.
If you can say that that let's work together to reduce annual talent attrition by 25%, that is a valuable proposition. Can you see the difference? If it takes 10 minutes to remove some prima donnas from the team and improve performance, why the cricket would you bother to run a workshop? The real performance improvement takes place right after removing the troublemakers.
You can't improve the overall performance of the fire brigade by running workshops on the physics of fluid dynamics. Hey, they don't need to know that aspect of water.
Since this approach is about working hours, there is a tendency to include heavy reports and tonnes of unnecessary memos in the agreement.
Monthly Retainer
There is a huge misunderstanding here. For many service professionals, retainers mean a certain number of hours of pre-paid manual labour. However, I believe that buyers use service professionals for what they know, that is, brain power, and not for what they can do in the form of manual labour (brawn power).
Just imagine a financial advisor. She takes care of your assets for a certain annual fee, but if you try to convince her that "Hey, I'm too busy, here is some money, go to the bank, stand in the queue and pay off my VISA card, since I pay you anyway", she may recommend you a check-up from the neck up in the local mental hospital.
Also make sure you get paid in advance and provide unlimited access to you. You also have to stipulate who exactly has access to you. There is no point in charging one single fee and allowing a whole corporation to call you whenever they need your help.
Again, your retainer is compensation paid to you for access to your smarts and talents for a pre-specified period of time. The retainer is not a pre-paid hourly rate that is drawn against as dispensed billable time. You are not a human vending machine.
There is no project in retainer agreements. There are no specific objectives. The emphasis is on having access to your smarts and counsel. The value of the retainer agreement is not a function of your physical presence either. It is the client's responsibility to contact you whenever your advice is sought.
Fixed Fee With Exposure Opportunities
This is when clients say "Although we pay you only peanuts but you will get millions of dollars worth of media exposure." This is retarded.
Imagine going to Safeway (Grocery store chain in North America, the UK and maybe elsewhere too) and refusing to pay full price, arguing that "I offer you exposure by carrying my groceries in your shopping bags". What do you think would happen? The cashier would call the nearest lunatic asylum to book me a place.
Push back to buyers and tell them that unless they only want "exposure to value" not the value itself, they had better cough up the dough. Imagine, you go to a restaurant starving, order teriyaki elephant tail, and the waiter does a nice PowerPoint presentation on how teriyaki elephant tail is cooked. Then he happily brings you your discounted receipt. You have just been exposed to value but did not get it. You are still starving. How would you feel? Still starving? Then wa
For the past ten-months, I tried every drug from the popular Vioxx, Celebrex and Aleve, to the long-standing Percocet, Ibruprofen 800, with some other fabulous ones like Fexeril, Ulltram, Naproxyn, and Antevert. (And, this is my short list).I hate drugs and I try very hard to keep them out of my body. For example, for five years I was either pregnant or nursing so I knew the whole “What class is this drug in?” drill.Unfortunately, there’s a time and place for everything. To help manage my physical and “mental” pain, I had to wean my baby right after my car accident, so I can try some of these "Wonder Drugs".[Note: My doctors prefer that I acknowledge my “neurological” pain. I developed an inner ear disorder (benign vertigo and post concussive syndrome) due to whipping my head around. I do not have any “mental” problems. I guess they're right, because “Psycho-Ponn” existed long before my accident :-)]Lessons Learned From Taking the Infamous Vioxx. Tips Every Entrepreneur Should Apply to Their Business:• If it’s too good to be true…it is. I hated what Vioxx and what other hard-core pain killers like Percocet did to me: they’d be knocked out. How the heck can I watch my girls if I’m sleeping? Solution: I stopped taking them immediately.• Trust your gut-instinct. Years ago, one family member was addicted (in my opinion) to Vioxx when they had knee surgery, and another one said he couldn’t bare his back pain without this "wonder drug". I was suspicious way back then.• Listen to yourself…even if the “professionals” say it’s Okay and Test. I’m seeing so many different doctors, that I’m accustomed to asking, “Are you sure I can take these together? Even though one says “can cause dizziness” and the other says “to prevent dizziness”? I chose to try them separately, then, together. You have to run the trail and error tests yourself to really know what works.• Educate yourself. If you’re not getting the answers you want, you need to do the research yourself. I wouldn't have taken care of my benign vertigo if I relied on what I was told rather than what I learned through my own efforts.• Limit yourself & Find Moderation. Don’t wait for your doc to say “taking too much Naproxyn & Ibruprofen can give your liver damage…it’s time for a new drug”. Too much of anything is bad for you. Finding alternatives to a bad thing is not always a good-thing either. I have non-drug days and all-drug days. Just find your happy-medium.• Believe i
If you can say that that let's work together to reduce annual talent attrition by 25%, that is a valuable proposition. Can you see the difference? If it takes 10 minutes to remove some prima donnas from the team and improve performance, why the cricket would you bother to run a workshop? The real performance improvement takes place right after removing the troublemakers.
You can't improve the overall performance of the fire brigade by running workshops on the physics of fluid dynamics. Hey, they don't need to know that aspect of water.
Since this approach is about working hours, there is a tendency to include heavy reports and tonnes of unnecessary memos in the agreement.
Monthly Retainer
There is a huge misunderstanding here. For many service professionals, retainers mean a certain number of hours of pre-paid manual labour. However, I believe that buyers use service professionals for what they know, that is, brain power, and not for what they can do in the form of manual labour (brawn power).
Just imagine a financial advisor. She takes care of your assets for a certain annual fee, but if you try to convince her that "Hey, I'm too busy, here is some money, go to the bank, stand in the queue and pay off my VISA card, since I pay you anyway", she may recommend you a check-up from the neck up in the local mental hospital.
Also make sure you get paid in advance and provide unlimited access to you. You also have to stipulate who exactly has access to you. There is no point in charging one single fee and allowing a whole corporation to call you whenever they need your help.
Again, your retainer is compensation paid to you for access to your smarts and talents for a pre-specified period of time. The retainer is not a pre-paid hourly rate that is drawn against as dispensed billable time. You are not a human vending machine.
There is no project in retainer agreements. There are no specific objectives. The emphasis is on having access to your smarts and counsel. The value of the retainer agreement is not a function of your physical presence either. It is the client's responsibility to contact you whenever your advice is sought.
Fixed Fee With Exposure Opportunities
This is when clients say "Although we pay you only peanuts but you will get millions of dollars worth of media exposure." This is retarded.
Imagine going to Safeway (Grocery store chain in North America, the UK and maybe elsewhere too) and refusing to pay full price, arguing that "I offer you exposure by carrying my groceries in your shopping bags". What do you think would happen? The cashier would call the nearest lunatic asylum to book me a place.
Push back to buyers and tell them that unless they only want "exposure to value" not the value itself, they had better cough up the dough. Imagine, you go to a restaurant starving, order teriyaki elephant tail, and the waiter does a nice PowerPoint presentation on how teriyaki elephant tail is cooked. Then he happily brings you your discounted receipt. You have just been exposed to value but did not get it. You are still starving. How would you feel? Still starving? Then wa
Do sales come from your ezine regularly? How many well-written articles do you submit per week to Online ezines? How often do you send thank you's and follow up messages to your different email groups? If you answered not many, then you need to re-evaluate. The answer to online success is the same as traditional success--promotion, promotion, promotion. Use these easy ways to boost online credibility and sales: 3. Send Follow up Messages to your Customers, Subscribers and Customers Do you keep email lists by category such as subscribers, potential clients, customers, or teleclass participants? Talking with many small business people, I discovered many only keep one list, primarily subscribers. While giving my subscribers information once a month, I make it a point to connect with many other groups. Each month or so, I send them some free information, sometimes with a sales message, sometimes not. How often do you follow up? The people who hear from you over time develop trust in you. Once they trust you, they are more likely to buy from you than new contacts. Keep a file of your loyal customers, your potential clients, your subscribers, your teleclass participants, and ePublishers. To each of these, send a different, targeted follow up email. Send a "thank you" message offering a freebie. To my loyal customers I offered a free question answered by email. In the same email, I followed with "Ways to Benefit and Succeed with the Book Coach." These included a free subscription to my ezine, a free teleclass on book writing and promotion, or an introductory coaching price. It's best to make one offer at a time. Recycle those articles you post online. Give them away as free reports to your potential clients. No cost to you and they take very little time. When a publisher asks me for a longer article, it's easy because I have several versions of each article I write. Put your online promotion groups in a buying mode. Make an irresistible offer that is real. Give them one or two free bonus reports they want. Caution: It's a turn off when the free bonus reports are worth more than the major package being sold. I just noticed one--the book was $39.95--the free bonuses were supposedly worth $500. That certainly doesn't speak truth. For an eBook of 30-75 pages packed with how-to's and resources, offer two free bonus reports taken from your article files or book excerpts. These can be 3-7 pages.<
Just imagine a financial advisor. She takes care of your assets for a certain annual fee, but if you try to convince her that "Hey, I'm too busy, here is some money, go to the bank, stand in the queue and pay off my VISA card, since I pay you anyway", she may recommend you a check-up from the neck up in the local mental hospital.
Also make sure you get paid in advance and provide unlimited access to you. You also have to stipulate who exactly has access to you. There is no point in charging one single fee and allowing a whole corporation to call you whenever they need your help.
Again, your retainer is compensation paid to you for access to your smarts and talents for a pre-specified period of time. The retainer is not a pre-paid hourly rate that is drawn against as dispensed billable time. You are not a human vending machine.
There is no project in retainer agreements. There are no specific objectives. The emphasis is on having access to your smarts and counsel. The value of the retainer agreement is not a function of your physical presence either. It is the client's responsibility to contact you whenever your advice is sought.
Fixed Fee With Exposure Opportunities
This is when clients say "Although we pay you only peanuts but you will get millions of dollars worth of media exposure." This is retarded.
Imagine going to Safeway (Grocery store chain in North America, the UK and maybe elsewhere too) and refusing to pay full price, arguing that "I offer you exposure by carrying my groceries in your shopping bags". What do you think would happen? The cashier would call the nearest lunatic asylum to book me a place.
Push back to buyers and tell them that unless they only want "exposure to value" not the value itself, they had better cough up the dough. Imagine, you go to a restaurant starving, order teriyaki elephant tail, and the waiter does a nice PowerPoint presentation on how teriyaki elephant tail is cooked. Then he happily brings you your discounted receipt. You have just been exposed to value but did not get it. You are still starving. How would you feel? Still starving? Then wa
FACTA stands for Fair and Accurate Credit Transaction Act. The law went into effect Jan. 1, 2005. FACTA is the law which allows all Americans access to their credit report once per year. So what does that have to do with you?On June 1, 2005, a new provision of FACTA went into effect. It says that any employer (even if you only employ one person) whose action or inaction results in the loss of employee information, can be fined by federal and state government, and sued in civil court. Bet you didn't know that. But you need to know, and need to know what you can do to protect yourself.Small Businesses will be affected the most.‘"A small businessman who makes a mistake could bear the brunt of a regulation like this," says James Plummer, policy analyst at Consumer Alert, a non-profit group that focuses on a free-market approach to consumer regulations.’If you don't shred and information gets out, there are penalties. But what if you do shred all potential employee information, and take all necessary precautions to protect your past, current, and future employees’ identities, and the information still gets out somehow? Under FACTA, you could still be held responsible.You may not think information theft could happen to you, but neither did a lot of companies, universities, government institutions, and businesses that have had employee or customer information stolen from them that have been in the news lately:Lexis Nexis University of Northern Colorado California State University (Chico) University of California – Berkeley University of Maryland Las Vegas Department of Motor Vehicles Bank of America Choice Point Weld County (CO) Employees (information stolen by an inmate while in jail)How can you, as an employer, minimize your liability?There are hundreds of things you can do to minimize liability, which are probably things you already do. Document shredding, careful screening of employees who will be coming into contact with personal information of customers and employees, physically locking file drawers with sensitive information, and setting up firewalls on computer equipment connected to the Internet, among hundreds of other solutions, are all good ideas.As Ben Franklin said, “An ounce of prevention is worth a pound of cure”, is definitely the case when it comes to securing personal information. However, no matter what prevention steps you take, there is no 100% effective wa
Fixed Fee With Exposure Opportunities
This is when clients say "Although we pay you only peanuts but you will get millions of dollars worth of media exposure." This is retarded.
Imagine going to Safeway (Grocery store chain in North America, the UK and maybe elsewhere too) and refusing to pay full price, arguing that "I offer you exposure by carrying my groceries in your shopping bags". What do you think would happen? The cashier would call the nearest lunatic asylum to book me a place.
Push back to buyers and tell them that unless they only want "exposure to value" not the value itself, they had better cough up the dough. Imagine, you go to a restaurant starving, order teriyaki elephant tail, and the waiter does a nice PowerPoint presentation on how teriyaki elephant tail is cooked. Then he happily brings you your discounted receipt. You have just been exposed to value but did not get it. You are still starving. How would you feel? Still starving? Then watch the presentation again and pay the discount rate again.
You offer real value, so you must only accept real dough. Wherever in the world you live, I find it hard to believe that the reining currency is called "exposure". But check it with your mortgage company. I may be wrong.
Cost-Based Fees
There is a problem here. In this braindead situation you are supposed to be paid based on your costs. As a service professional, you can offer advice worth of thousands of dollars in ten minutes at very low costs. So, why should you be penalised just because your overhead costs are so low?
When you were in the phase of collecting your knowledge, you paid both for your schooling and your education. (The older I get the more I realise the difference between the two.) Nobody came to you saying, "Let me help you to pay your tuition because a few years later I want to hire you and need you to be as knowledgeable as possible".
Contingency Fees
The mistaken idea behind this payment method is that every dollar your expertise brings to your clients' businesses, they pay you a percentage.
Once I had a woman who wanted to hire me to help her with weight loss. (I am a certified personal trainer and coach some businesswomen over weekends on fitness and lifestyle issues. You can call it a paid hobby.) But instead of paying me my normal fees, she wanted to pay me for the lost weight. I told her that it was up to her how well she would adhere to the programme I design for her, and she would start shaping up accordingly. She insisted on the pay for performance (lost pounds). So I had no option but to tell her that I could push her to the brink of certain death to achieve maximum weight loss, but that would not achieve what she was seeking. Although she saw the point and was willing to accept my normal fees, but I decided to reject her as a client. A troublesome prospect most often becomes a bat out of hell (hello Meatloaf!) client.
How stupid do you think a mother would be if she paid a babysitter for the poundage of flesh she has to babysit? Just a thought.
Business owners all over the world are pounding on their chests that they have no money to waste and they only pay for performance. This statement is also bullshit. They have already wasted a boatload of money on their own stupidity and underperformance, called "figuring it out", instead of hiring some help.
Far too many business owners call in external advisors too late. Just imagine. What is the point in hiring the best ship consultants to save your sinking ship after she hit an iceberg and is already 9/10 under water?
My view on contingency payment is that I don't want to take 100% risk and then be rewarded with a 10% of the rewards, while the business owner is having a great time, knowing that she abdicated all the responsibility to an external helper.
This also reminds me of how so many professionals live their lives. They are willing to sacrifice their own health for the sake of chasing more business, and from their 50s they spend all their hard-earned money on remedial measures to re-build their health. Does it work? No. You simply cannot put in what is not there. Once your health is gone, it is gone forever. It is so simple.
All right, business owners may cry that they are only willing to pay for results. Then how come that they have been paying themselves for years and years for their own mistakes and underperformance? Maybe they should pay back all that money and now there is money for a competent advisor.
This method doesn't work in consulting, which is all about collaboration. It is about WE create something amazing here, not YOU do this and I do that. The synergy lies in "we" not in "you" and "I".
But for example if you do lead generation FOR a client and you are in 100% control of the whole lead generation process, then contingency may work out. Nevertheless, you still have to demand a certain "setup" fee payable in advance. Also note that you don't get paid for the sales, but you get paid for the sales leads. Converting those leads into clients and customers is not your problem.
If you are a DJ and play a popular song, you have to pay royalty on the song even if the whole room is empty. It is your responsibility to bring in people with pulse and money not the musician's.
The other place when contingency compensation works is joint ventures (JV). Howeve
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