The Business Behind Consulting ◾ 105
The correct application of the Odyssey Arrow eliminates fee negotiations
further along the process, while allowing you ample opportunity to demon-
strate talent and define value.
It seems counterintuitive, but when you do not charge enough, people
tend not to believe you. Imagine going to two heart surgeons for the most
important operation of your life. The first says that he will do the job for
$100. The second surgeon says it will cost $5,000.
Would you risk open-heart surgery for $100? Would you be suspicious
about the credentials of this surgeon? Credibility comes from the Latin
word credo, which means to believe. What you will find is that when the
price is higher, the client will tend not to negotiate. In fact, the number
one reason consultants lose business is that they do not believe in their
own numbers and abilities, and they betray this lack of conviction to the
client.
When you buy something cheap, you tend to treat it with less respect.
When you invest a large amount of money on something, its perceived value
grows exponentially, and you treat it with great care and respect.
A second point: Suppose by working through the metrics of a project you
have demonstrated to your client that it will save them $500,000. The client
then asks, “How much are you going to charge for this?”
If you respond by saying “$800 per day,” you have immediately weak-
ened your credibility by breaking the link between your talent and its value
to the client. By relating your fee directly to your value to the client, you are
creating an unassailable argument in your favor.
Consider this story. A machine in a factory produces $250,000 of goods
every day. Then one day, the machine breaks down. The factory owner
calls in the supervisors, the mechanics, and the engineers, but nobody can
set it working again. Then they call Joe, an external consultant, a Master
Practitioner in the area.
Joe comes in, asks many pertinent questions, and examines the machine
meticulously. Finally, he takes a piece of chalk from his pocket, goes over to
a pipe, and makes a mark. He calls down the engineer and says, “Drill here.”
They drill there, let out some air, then seal the pipe back up and hit the
start button. The machine starts working again, perfectly.
The factory owner is delighted. “Thank you, Joe, now what is your fee?”
“Fifty thousand dollars,” Joe replies, and the factory owner says, “Joe,
you’ve only been here for half an hour, that’s a mighty large fee!”
“Yes,” says Joe. “It’s $1 for the chalk and $49,999 to know where to put
the chalk mark.”