Alan Weiss - Value-Based Fees

We speak today of “disruption” and “volatility.” With the original version of this book over a decade ago, nearly 20 years ago, I disrupted the consulting profession with the concept of billing for value and not time.

Today, professional services organizations, from law firms to accountants, from architects to professional organizers, are evolving toward value-based fees (though some are mammals and some are still dinosaurs).

In volatile times, your value is your value. It doesn't matter whether you're on Zoom, or Skype, or you're a holograph levitating in a virtual meeting room. Value is not “presence,” and certainly not physical presence in the traditional sense. In fact, the benefits of meeting without travel, without the expenses of lodging and transport and food, and without the vagaries of rescheduling and postponing at great cost due to uncontrollable factors, make for even greater value in remote interactions.

The $18,000 cited in the introduction to the earlier edition would be $50,000 today. Our value is greater than ever, but it does face that toughest of all sales.

The first sale is always to yourself.

Read on, and let me assist you in closing the deal.

Alan Weiss, Ph.D.

East Greenwich, RI

March 2021

My thanks go to the people who have made the fees possible, the wonderful clients with whom I've had the good fortune to work over the past two decades. I immodestly think that they're better off, and I know that I am. They are wonderful people.

Who says that nice guys finish last?

Here's to the most enduring clients: Dr. William Winter, Keith Darcy, George Rizk, Art Strohmer, Jarvis Coffin, Marilyn Martiny, Wayne Cooper, Lowell Anderson, Roseann Strichnoth, and Jerry Arbarbanal.

Deep appreciation goes to the wonderful editors at Jossey-Bass/Pfeiffer, headed by Kathleen Dolan Davies, the only human who speaks even faster than I do. It has been a joy to work with them all.

My thanks also go to Matt Davis for suggesting and assisting in the second edition.

Once again to L.T. Weiss, my love and affection—I know you hear me.

Alan Weiss is one of those rare people who can say he is a consultant, speaker, and author and mean it. His consulting firm, Summit Consulting Group, Inc., has attracted clients such as Merck, Hewlett-Packard, GE, Mercedes-Benz, State Street Corporation, Times Mirror Group, The Federal Reserve, The New York Times Corporation, Toyota, and over 500 other leading organizations. He has served on the boards of directors of the Trinity Repertory Company, a Tony-Award-winning New England regional theater, as president of Festival Ballet Providence, and chaired the Newport International Film Festival.

His speaking typically includes 20 keynotes a year at major conferences, and he has been a visiting faculty member at Case Western Reserve University, Boston College, Tufts, St. John's, the University of Illinois, the Institute of Management Studies, UC Berkeley, and the University of Georgia Graduate School of Business. He has held an appointment as adjunct professor in the Graduate School of Business at the University of Rhode Island, where he taught courses on advanced management and consulting skills. He once held the record for selling out the highest priced workshop (on entrepreneurialism) in the then-21-year history of New York City's Learning Annex. His Ph.D. is in psychology. He has served on the Board of Governors of Harvard Medical School Center for Mental Health and the Media.

He is an inductee into the Professional Speaking Hall of Fame ®and the concurrent recipient of the National Speakers Association Council of Peers Award of Excellence, representing the top 1 percent of professional speakers in the world. He has been named a Fellow of the Institute of Management Consultants, one of only two people in history holding both those designations.

His prolific publishing includes over 500 articles and 60 books, including his best-seller, Million Dollar Consulting (from McGraw-Hill). His newest is Legacy (Taylor &and Francis). His books have been on the curricula at Villanova, Temple University, Stanford University, and the Wharton School of Business, and have been translated into 16 languages.

He is interviewed and quoted frequently in the media. His career has taken him to 63 countries and 49 states. (He is afraid to go to North Dakota.) Success magazine cited him in an editorial devoted to his work as “a worldwide expert in executive education.” The New York Post called him “one of the most highly regarded independent consultants in America.” He is the winner of the prestigious Axiem Award for Excellence in Audio Presentation.

He is the recipient of the Lifetime Achievement Award of the American Press Institute, the first-ever for a non-journalist, and one of only seven awarded in the 65-year history of the association. He holds an annual Thought Leadership Conference, which draws world-famous experts as speakers. In 2017 his featured speaker was Harvard Distinguished Professor Dan Gilbert, whose work on happiness has drawn over 15 million TED views.

He has coached former Miss Rhode Island/Miss America candidates in interviewing skills. He once appeared on the popular American TV game show Jeopardy , where he lost badly in the first round to a dancing waiter from Iowa.

Alan has been married to the lovely Maria for 52 years, and they have two children and twin granddaughters. They reside in East Greenwich, RI, with their dogs, Coco and Bentley, a white German Shepherd.

Somewhere in the mid-eighteenth century, agricultural production exceeded population growth, meaning that surplus farming could replace subsistence farming in many places. The farmer could therefore barter crops in exchange for someone to repair fences, tutor the children, or sing in the evening.

Thus, “value” became highly important. Was someone who planted crops more valuable than someone who tended the animals? Was a plow horse more valuable than a new roof? Could some of the children be released from sunup-to-sundown chores by employing others, perhaps even sending them to school, or the priesthood, or the military, or a convent?

And I'm quite sure that about 200,000 years ago one of our forebears exchanged some flints or arrowheads he had prepared in exchange for a mastodon steak or some hide for clothing. The two parties involved somehow reached an agreement about the value of the transaction and the worth of the services or products.

“Value” represents worth, usefulness, importance, good stuff like that. A “fee” is equitable compensation paid in return for a desired service or product.

Questions? Simple, right?

I was the keynoter at a convention once where a participant in the audience told me that he could make more by billing hourly for his time than anyone could basing fees on value. I laughed and walked away. This isn't a shade of grey, or a debate, or philosophic point. He was denying the existence of gravity or oxygen.

Alanism: Logic encourages thought, emotion urges action.

When retailers find sales declining, the smarter ones raise prices, they don't engage in desperation sales. Buyers are willing to pay the higher prices when they perceive those prices denote higher value.

People believe they get what they pay for; otherwise no one would buy a Brioni suit, or a Bentley car, or a Breitling watch. Now, you don't need Brioni, Bentley, or Breitling for attire, transportation, or the time of day. But they do fulfill certain ego needs, certain emotional desires. Nothing wrong with that.