As we continue to “tweak” our business model in ways that help us succeed, I caught myself responding to an email the other day, in which I was about to say “no” to a prospect. The reason? Well, it was a “home user”, rather than a business with multiple computers and deep technical requirements. What’s wrong with home users, you might ask? There’s nothing wrong, per se, but the modus operandi of interacting with home users is wildly different than that of working with businesses, for instance:

  • Home users typically want help in the evenings or weekends, when they’re not at work themselves
  • Home users seldom call once things are working, but when they do, they feel they have the same urgency as a business of 50 not being able to work at all
  • They often expect “little” follow-ups (by email, or quick calls) to be complimentary because somehow our services should be warranted forever
  • There is little to no value placed on productivity and the benefits of proper hardware lifecycle planning
  • There’s no certainty in how much work we can generate on a month-to-month basis

So why did I feel like I wanted to say no? Simply because the ratio of effort to monetary compensation is often not sustainable with this type of client. In order to satisfy our income goals, I’d have to take a lot of these appointments, and put myself back in the “rat race”, so to speak. The challenge with IT consulting, like many service-based businesses, is that customers expect to pay a certain amount per hour, which means my earning potential is, for all intents and purposes, capped – once I book all the hours I can book, I simply can’t make any more money.

It’s fairly easy to miss this in the early stages of starting a service-based business (I did!), but as we continue to expand our knowledge, take more training, obtain more certifications, and generally become more experienced, it is acceptable to expect the value of our time to increase. However, there are usually few “superstar-level” computer problems that can only be solved by superstar-level consultants that charge a premium rate. There can be regular problems that junior consultants can’t figure out (who may also be overcharging for their entry-level knowledge), but that’s a different story. It’s just very hard to place a subjective value on time, and expect every prospect to be comfortable with it.

All financial reasons aside, I just hate saying no to business. It’s just not in me, it seems. Besides, it sounds negative and rejective. I’ve struggled trying to say “no” for a number of years, especially to existing clients that have been calling for a while, and simply expect service to be there. I started to notice many service-based business charge a minimum fee (e.g. 2-hour minimum), etc., but this is just a way to spend more time at the same low hourly rate. In thinking “how can I say yes?”, it occurred to me to transfer the decision of working with someone to the prospects themselves. Rather than saying “I’m sorry, we only work with businesses of 15 or more people”, I’ll now say something like “absolutely, our half-day and full-day rates are posted here, and once you’re ready to proceed please sign our consulting agreement here, and we’ll get to work!”. Now, it’s entirely up to the prospect to make the decision about working with us at the posted rates or not. I feel this is a much more passive approach, in giving them that room to think about it. In the end, what we’re really after, is working with clients that understand their priorities (aligned with ours, ideally). If anything, the exercise of sending them the info to think about, is allowing them to prioritize, and figure out whether the time we can save them is worth it or not – and it’s OK if it’s not. The main goals are  a) they have choice, and b) we’re not saying “no”.

When I tell colleagues about our half-day and full-day ploy, I often get a chuckle, the reason being that the reverse-engineered hourly rate is quite high. But this is precisely the perception we need to focus on changing. We don’t charge for our time, really, we charge for the result we provide our clients — the value of the solution –. Clients do want to feel like there is a “quantification” of the rate (see my article “Quantifying the Value of Managed Services”), so it’s important to understand the tangible make-up of the value we provide.

Ultimately, if the home user decides to proceed with the booking, I no longer have a monetary hang-up about it (in fact, I often over-deliver), as the relationship now stems from the appreciation of value. Years ago, even with a full calendar of bookings, I usually found myself not enjoying a lot of the work, and I discovered that it largely resulted from the inadequate monetary compensation.

Why this whole rant? Hopefully I can empower someone somewhere to make that small adjustment (from “no” to “yes”), and remove that income cap roadblock.