24. Februar 2004

[ Consulting , English ]

How to price Consulting Services

Tomasz Rudolf has kicked off an interesting discussion on KnowledgeBoard: Towards value billing: pricing of consulting services

He has a number of good questions:

For me, the big question is the relation between the perceived value of the intervention (both a priori and ex post), and the Real Value (if we can speak of any objective contribution of the consultant). Of course it is very hard to research, but I would like to know if the more expensive consultants (with higher perceived value) really do deliver higher ROI, or are they just proving it better?

What is the client buying when he calls a consultant? Well-presented information? Access to your knowledge? Capability? Transformation? Prestige? These are mostly intangibles, the value of which is very contextual, individual, and subjective.

There is a pressure on consultants to justify their cost. Especially in Germany consultants have lately come under pressure [de] to explain why they are so expensive. (Roland Berger, CEO of the well-known consultancy that bears his name, failed miserably doing this and damaged the reputation of the entire sector.)

The problem is that the results of a consultant's intervention can usually only be seen after he has finished his job and left the client. Also, they can seldomly be separated from the interventions of the managing client and other interventions into the business.

Tomasz says:

Right now, I do not think many consultants take the additional effort to do real analysis of the project results some time after the engagement. (...) But, if both sides want to learn, they need to take the additional time for reflection. what do you think?
Please join the discussion on KnowledgeBoard if you're interested.

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