The note from a friend was very kind.
“I have been presented with a professional opportunity and so I am in search of a career & transition coach to talk through the process. I have always been impressed with and inspired by what you have to say in person and online and I am hoping you would be available for us to book some time . . and wanted to know what your rates are. . .”
Rates? For conversation?
At most, the cost of a medium non-fat hot chocolate (hold the whipped cream, please).
If it’s a real project and piece of something we’d call “work” I can spec out what a fair fee might be but I don’t think a meter shouldn’t be running when someone’s figuring out whether it makes sense if there’s actual work to be done, and if so, what it would look like.
Giving good advice – unlike Lucy’s advice booth in the Peanuts comic strips – for consultants should be about relationships (understanding the client) and value (the help and outcomes you provide) – not a transaction fee.
If you take a step further back, it sometimes seems like a pretty funny (as in odd) world in which we live. Even though many folks want something for nothing, we often derogate stuff that costs little as having low value.
Free advice? People mostly don’t listen.
Stuff that costs a lot?
People who can pay sometimes do – and sometimes overpay. One firm with whom I worked had a vendor routinely bill out $10,000 a day for group facilitation services even though the higher range of most good, experienced practitioners at the time was $5,000 per day.
When you love what you do – as I do – it’s an interesting dilemma. Do you charge for your talent or give it away at times for free? If the goal is to help people, most often to help them change, sometimes the answer is not what you think it might be.
Research from Arizona State professor Robert Cialdini has shown that pricing is often perceived as a a signifier of quality. He notes that “organizations will sometimes raise their prices and as a consequence, will be seen as the quality leader in their market” – even without changing their product or offering. Raising prices can lead to more business, not less.
So do you charge people for things that come easy for you? Does “helpful, free advice” become “paid advice?”
Hunch is that like many things in life, it depends.
There are some who believe that it’s best to charge for whatever you do. When I took my practice full-time several years ago a colleague encouraged me to bill out the marketing advice I gave people even though my focus is coaching execs and coaching start-up and leadership teams. “No one else does marketing in the coaching space as well as you do,” she advised. “You can charge for it.”
I’ve been blessed to know, though, really good people and practitioners – attorney Lindbergh Porter at Littler, Mendelson or compensation / stock equity consultant Dan Walter come to mind – who make giving free advice part of the routine way they do business. Although they do it in very different ways, the action is the same; shared wisdom is part of building a practice by giving more than the client expects, not less. Looking at the long-term relationship, rather than the short-term transaction.
LinkedIn Chairman and serial entrepreneur (and now billionaire) Reid Hoffman advocates the importance of thinking about how to help, rather than what to bill someone. Reid notes that this approach – along with being able to see the world from another person’s perspective – is critical to forming genuine, authentic business relationship. He notes, ”The second ability is being able to think about how you can collaborate with and help the other person rather than thinking about what you can get.”
Doing business, as the saying goes, the old fashioned way; earning it.
So I met with my friend to talk about their opportunity, asked a number of questions and listened to what they were thinking, and then gave some thoughts and guidance on things they might do. Who knows; it may never turn into a paying engagement, but hunch is it demonstrated some smarts, wisdom, and caring on my part.
It may be for free, but that doesn’t mean it can’t be good.
And building a word-of-mouth practice on the strength of smarts, wisdom and real caring for your clients is a pretty decent way to run your business.
Just ask Lindbergh, Dan, or Reid.
Author J. Mike Smith is a business leadership, career and team coach, devoted dad and recovering Foursquare addict, J. Mike’s pragmatic optimism around life is infectious. You can view his other articles here, and learn more about him here.