Noah Fleming is the bestselling author of EVERGREEN: Cultivate The Enduring Customer Loyalty That Keeps Your Business Thriving, and helps $2M to $2B companies create long-term, sustainable, highly profitable customer relationships.
Noah doesn’t bill by the hour or sell deliverables. He regularly sells $70,000 projects that he used to sell for $7,000. (No, Noah isn’t some snake oil salesmen.) The best part is that his clients are thrilled with the deal because Noah is focused on something most agencies aren’t: the value that the project creates for the business.
In today’s chat, we cover how Noah developed these skills from the consulting master himself, Alan Weiss, as well as the missteps he took when applying it early on.How you can use value-based pricing to 10x your consulting fees with @noahfleming (PODCAST) Click To Tweet
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Investing in yourself [2:00 – 9:00]
Noah had been making a decent living as a consultant for a few years but didn’t have a real plan. He was working with golf courses, mom and pop shops, and whoever else would give him money in his small town. He wanted to expand beyond a 5-minute drive from his house and knew that he had to get serious in order to do that.
As he started looking into improving his consulting practice, one name kept coming up over and over again: Alan Weiss. Noah bought one of his 60+ books, The Million Dollar Consulting, and joined his online message board. He was quickly surrounded with smart people talking about topics he had never even dreamed of. He knew he was in the right place.
Noah signed up for Alan’s private coaching, knowing that if he wanted to get serious he needed to work with the best. Between the coaching and the travel cards, Noah spent nearly $40,000 that first year but calls it his greatest investment, because his business has 10x’d since then.
If you want to get serious about something, having a coach and surrounding yourself with like-minded people is one of the fastest ways to achieve success. While $40,000 is a ton of money, Noah viewed it as an investment in himself that has more than paid off, and he continues making similar investments to this day.
Value-Based Fees: The Basics [10:30 – 16:00]
The underpinning of Alan Weiss’ consulting philosophy and the strategy that has allowed Noah to turn $7,000 projects into $70,000 ones is called value-based fees. In short, as a consultant, you should be paid for your contribution to the outcome that your client gets.
Noah argues that these sort of fees are actually beneficial for both the consultant and the client because the consultant isn’t stuck trying to put a certain number of hours into a project even when it isn’t needed, and the client isn’t worried about the clock running whenever they pick up the phone.
When Noah takes on a project, the client has unlimited access to him and they don’t have to worry about being charged for necessary meetings or phone calls. The deliverables aren’t the focus, the value the project is creating is.
Value-Based Fees: Making the Sale [16:00 – 30:25]
People won’t just come to you, tell you what they want, and then pay value-based fees to be fair. In order to earn these rates, you need to figure out their problems and identify a solution they aren’t aware of. Otherwise, they could just go to the development shop down that road that charges a fraction of your fees.
One of the hardest parts of selling value based consulting is that you cannot discuss the fees until after you have conceptual agreement on the value created and the client has a proposal in their hands. If you talk about the fees too early, they haven’t had a chance to see the value yet, and just like a doctor, you won’t have had time to properly diagnose the problem and identify the needed treatment.
At the end of the day, even when you can justify fees based on the return you can generate, not everybody will be on board. If you want to commit to increasing your rates, you are going to lose some business, but the business you gain will more than make up for it.
Don’t specialize, generalize [41:45 – 50:30]
One of the mottos of Alan Weiss is “Don’t specialize, generalize.” This flies directly in the face of the vast majority of the guests I’ve had on my podcast who have preached the virtues of taking a narrow positioning in the market.
Noah takes a different view of consulting than most of the agency owners that come on the show. If you plant your flag in a niche, then it is relatively easy to stand out, charge above market rates, and build a great living for yourself. But Noah doesn’t want somebody to say, “Get me a consultant that specializes in customer service for ecommerce companies that do $2mm-5mm a year.” He wants people to say “Get me Noah Fleming.”
To achieve that sort of recognition and be able to command high, value-based fees requires a strong brand. I don’t think this approach is for everybody, but it does have merit and is clearly working for Noah and many others, so I’d strongly recommend listening to this portion of the podcast to challenge your own assumptions.
Want to learn more?
Noah’s website, NoahFleming.com, is packed full of great resources. If you want to learn about his mentoring program, check out his books, or sign up for his Tuesday Tidbit newsletter, it is all there. If you want to talk to Noah directly, he even gives out his email address, but you need to listen to the show to get that.
What do you think about value-based fees?
Some agency owners “know” value-based fees won’t work for them, others don’t think they’re fair, and others absolutely love them. Everybody has an opinion on value-based fees. Could they work for your agency?
I love hearing from listeners, so share your thoughts in the comments below.