Scope creep dogs both clients and service providers, but it should never be considered the cost of doing business. Scope creep poses an important business risk from both sides and it’s important to take steps to manage it.

In fact, scope creep strikes me as such an important factor that I’ve created a new page on managing scope creep.

Many times, people think they’ve got a problem with consulting fees when where they really need help is project management. That’s why my Consulting Fees Guide goes into detail about managing sticky client situations.

I’ve seen scope creep plague consultants from a range of industries, from life coaches and graphic designers to accountants and lawyers and from carpenters to social media specialists. It’s natural to want to please a client or avoid conflict, of course. And many people get so focused on the excitement of the project or the potential for greatness that they may lose site of the original scope of work.

When I was just out of university and happily working for a firm, I was brought in to help with a software project that had got out of control. The young specialist who’d been leading the project had missed many key deadlines. When I took a closer look, I saw that he’d made several helpful suggestions to the project team along the way. They were excited to have so many opportunities to build cool features and functions that they too lost site of the original plan. On delivery day, they presented what seemed like an incomplete application to us – except that it still had all those cool features and functions. Seeing that the problem was scope creep, I had to set up a meeting between senior management at both firms, go through all the documentation to sort out feature requests, agreement and the lack of money that changed hands. While I hadn’t been involved with the project or its scope creep, I needed to figure it out. I was fortunate to have a fantastic mentor in senior management, so I gained a tremendous amount of information about scope creep. After sorting out the legal and billing issues with the senior management teams, I worked with the service provider to get the project back on track. I appreciated the opportunity to be a turnaround artist and that’s stuck with me for the rest of my career. But seeing how the other young specialist had almost derailed with the project, I also learned how important managing scope creep was. (For the record, the young specialist is now in senior management and very successful in his life and had many other skills and talents that he brought to the project.)

Check out the new article on handling scope creep.

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Imagine you are terribly ill. You have a huge pain. You would do anything to take the pain away. It’s preventing you from enjoying your life. You can’t work. You can’t sleep. It’s making you miserable.

Now imagine two doctors appear. One can start right away. They’ve got a solution, they have experience in the field, and you really click with them. They charge $500 an hour for their consulting fee.

The second doctor also has a solution, has some experience in the field and you really feel like you’ve got a strong rapport with them. They tell you that their practice is new and they’ll take you on for $200 an hour in consulting fees.

What does your gut say?

When you’re in pain, you want someone you can trust. You want someone who understands your pain and the cause of it. You want to know that they can do the job and they’ve got the bedside manner to see you through. Does the price matter?

Imagine now that you’re a small business owner. You need a new website. The one you have now is laughable and even your friends tease you about it once in a while. Clients sometimes call in, tying you up, because they can’t find information they need. You now you’re losing business, that you’re not putting forth the image that will support sales, and you’re spending way too much admin time on managing the site. Realizing you can’t go on like this, you bring in a few contractors and narrow it down to two. An established company you really like with experience and higher consulting fees. And an upstart company, where the owner is new to consulting, and says are really new to this and that they’ll cut their hourly rate if you’ll take a chance on them.

Which would you choose here?

Here’s the thing. The hourly consulting fee matters less than the solution and that value of that solution. If one person charges $200 an hour but does it poor, has little experience managing clients, and takes 100 hours to do it, you’re in for $20,000 and you may still be in pain. If the person who charges $500 an hour gets it done and does it right, you may be so glad to be out of pain that you won’t be sitting there counting pennies. In fact, because they’re more experienced, perhaps they’ll get it done faster. Or maybe they’ll end up charging $25,000, but they’ll put this problem behind you, you’ll never hurt again, and there’s really no risk. Would you care if the first person discounted their fees?

Now look at your own consulting business. It’s not about your rate. It’s about the value you offer to clients. Perhaps you’re not yet ready for Solution-Based Fee(tm) pricing. That’s okay – you’ll get there, and you can charge one of these other models instead. But you can – right now – start to point clients to the value of the solutions you offer. You can point them to the vision of a better tomorrow and to the hope of getting through this. You can show them your portfolio, your testimonials, your references. You can talk to them about your methodology and more. But if you tell them, “Hey, I’m new at this, so I’m going to charge you less”, you’re telling them that you’re not worth more than that, that there’s a risk in working with you, and that you’re not confident enough to charge what you think you’re worth. And that client will now know they can get you for less, because you obviously discounted just now. So the ground is made of quicksand, which is hardly the place to build a strong relationship.

So think twice before you tell the client you’ll cut your rate. It makes far more sense to point them to your special methodology that allows you to move more quickly, your lower overhead that you pass on in the way of lower fees, or other reasons you can offer a special rate. (And, ideally, you move on to Solution-Based Fees, so that you haven’t got the meter running and you’re not hamstrung by your own success in getting work done quickly.)

If you need help with setting your rate, take a look at Consulting Fees: A Guide for Independent Consultants here.

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If you’ve been in business for a while, chances are that you’ve considered revamping your brand at some point. Perhaps you’ve changed your positioning, your target market or even your identity. It makes sense to revisit your marketing plan and brand strategy on an ongoing basis.  When you look at repackaging your identity or products, make sure you’re going to be able to pull it off. The importance of this really stood out for me when I saw the following book on the shelf at my kids’ school.

 

Old Yeller. This was a staple of the Disney movie rotation on Sunday nights when I was growing up. And I later read the book in school. But it was a novel, not a picture book, and it certainly was not meant for first graders.

So, seeing this book set out in the after-school care’s first grade room, I was a little surprised. (It turns out that the book was left behind by someone else.) I opened it up to see how on earth the tragic Old Yeller story would unfold as a picture book. Here’s the last page.

“He knew he was here to stay.”

Well, if you haven’t read Old Yeller or seen the movie and you think you might, I urge you to watch the very sweet opening from the 1957 movie and then skip past the spoiler alert that I’ve marked below, perhaps shielding your eyes.

**SPOILER ALERT**

A 1956 Newberry award-winning novel by Fred Gipson and then a 1957 Disney movie, Old Yeller’s a tale about a little boy who adopts a scraggly dog. The boy’s older brother tries to dissuade him. But the dog eventually saves the family several times, while the father is off on a cattle drive, and the older brother, Travis, becomes attached to the old, yellow-furred dog. Unfortunately, a rabid wolf attacks poor Old Yeller. Knowing the risk to the family, the boys’ mother decides the dog must be killed to prevent further tragedy. Travis, knowing it is truly his dog now and taking on his own emerging role as a man, insists on shooting the dog himself. (The novel is a little bit different, but Travis shoots the dog when it looks like his younger brother is about to be attacked by rabid Yeller.) And there emerges one of the most tragic tales in children’s literature or Disney films. (I just realized this is one of the only Disney movies with a living mother, by the way.) The story manages to recover from that low point after Travis adopts a puppy sired by Old Yeller – Young Yeller helps him get over the tragedy.

So, as you might tell from that summary, the Disney picture book seriously leads the reader astray. “He knew he was here to stay.” I’m serious. That’s how the picture book ends. Yes, the repackaging of a tragic story ends on a completely different note – with a happy dog who knows he’ll be here forever.

Now, don’t get me wrong, I am not in the habit of traumatizing young children. So I’m not saying that we should tell a bunch of six-year-old kids that a teenage boy has to shoot his beloved dog (as well as the family cow and the rabid wolf).

**END SPOILERS**

But I do wonder about repackaging such a tragic tale as a warm-hearted picture book. Kids probably don’t know the story and will be happy to read a book about a lovely Golden Retriever with heroic categories. But I would think their parents, grandparents and librarians are the ones buying the book. Would you think to buy Old Yeller for a young child? Well, I suspect the power of the Disney brand and marketing machine helped to spark sales, but I am not sure any other company could pull this off.

If you are about to embark on a revamp of your own brand, product or services, take a good hard look at what you can actually achieve. If you’ve got the resources, brand power and identity of the Disney marketing machine, you may well be able to turn a real “dog” into a star or cash cow, with just the right plan and implementation. Yeah, I know. I couldn’t help but reference the BCG growth matrix. I swear I’m going to include Old Yeller in all my marketing lectures about BCG’s growth matrix from this day foreward.

For most of us, though, it’s a far easier sell to make changes that align with our core competencies and market. It’s hard to move the position of a low-end product so that you attract high end buyers, for example. It’s much easier to make small moves, unless you’ve got deep pockets, incredible resources and perhaps celebrity endorsements and amazing case studies.

Whatever the case, make thoughtful decisions about your marketing relaunch. Every dog has its day.

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You won’t believe how this gardening truck beats the marketing game.

I got stuck in traffic recently. A big gardening truck was blocking my view. The back of the truck was a cage and there were rakes around the edges. I couldn’t see the traffic ahead of me. But I wasn’t irritated.

Ah, see the trick this gardener has used? You can hardly be angry for long. Who’s on there? Sponge Bob, a witch, Snoopy, Hello Kitty, a smurf, Mario…now I’m too busy giggling to care about the view I lost. And my kids are in the back, giggling and pointing out the stuffies. Are we late? Can we see? Is that truck dirty and blocking the view? Who cares?! Not me. I’m too busy trying to figure out who’s on the truck.

Of course, a friend, who’s a nurse, worried for the plight of these poor souls. “THEY’RE TRAPPED!! Did you help them? Are they okay? Please tell me they’re okay!!”

And, while I was pointing out the stuffies to my kid, my inner (okay, not so inner, more of an all-the-time-inside-and-out) marketer was marvelling at the brilliance of this gardener’s trick.

It’s all about turning a negative business situation around – making it into a positive. Look at a problem and turn it into an opportunity. This gardener turns frowns into smiles. The gardener might have improved upon the positive attention by putting a logo and a joke on the back of the truck – free advertising for this very original garden party.

Can you do the same for your business? Look for a way to turn a negative experience or feature into a good one. Consider how Disneyland has turned line-ups into part of the entertainment experience. Or think about how Five Guys and Fries lets you scoop up a basket of peanuts to shell and eat as you wait, taking your mind off how much longer fresh food takes to make. Sleep Country has their delivery people wear little booties, so your floors remain clean and you remain focused on the excitement of your new bed. Ikea decorates their stores and provides a cafeteria just before you’re completely worn out, so that you can recharge before making your way to product pick-up. Ivory built an empire on their floating soap.

And it’s just just about managing customer experience. You may find an opportunity in a negative. I know of a law firm that became well known for it expertise in helping unfairly fired employees. A few years later, they expanded into helping employers avoid making the sorts of mistakes that would get them sued – the firm leveraged its knowledge in one area to move into another.

How can you turn a negative into a positive?

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As a small business owner, you probably hold the responsibility for making sure your business continues, no matter what the circumstances. By managing business continuity risk and planning accordingly, you can better ensure the long term health of your business.

Have plans. A business plan will help you figure out where you’re going. A marketing plan will help you determine where to focus and how to build your business. And a business continuity plan will help you address potential risks to your business, such as disasters and turnover of key staff.

Identify risks to your business. Think about the risk exposure you have. Look at your assets and your equipment. Think about data, privacy and legal issues, as well as income fluctuation and emergency funds. Consider who has access to your customer information, plans and risk.

Think outside the box. When it comes to business continuity and emergency preparedness planning, we usually consider fire, flood, earthquake and natural disasters or perhaps “key man” or “key person” risk. But, if your business is still very small, that key person risk may mean more than a concern about staff turnover. If you’re at the helm, you may have to consider what could happen if something happened to your spouse, your children, your aging parents or your own health. Thinking about how you can work on the business – and not just in it – does more than free you from the drudgery of running a business. It means that you can walk away when you need to do so and the business will keep running. So consider how to build your business so that you don’t have to show up for it to keep running.

Get insurance and other coverage. Fire, property, car, health – make sure you’re covered. You may also want to look at financing and even a line of credit.

Develop an emergency communications plan. If something goes wrong, how will you communicate with key clients, staff, vendors and others?

Identify potential sources of support. Can you outsource some of your operations? To whom?

Determine what systems and organizational units are interdependent and which rely out outside services.

Prepare a business recovery plan. If you or someone else had to start up again after a disaster, what would need to happen?

Get a 72-hour kit. Whether for home or office, it’s worth having an emergency kit. I’ve even got 72-hour kits for my car and home. If something goes wrong, I know I have the essentials for three days and perhaps longer.

For small businesses, emergencies come in all shapes and sizes. Plan ahead and plan to succeed.

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Setting consulting fees comes up throughout the work life of a consultant. It’s not a “set it and forget it” business activity. Reviewing and negotiating fees can puzzle both new and experienced consultants. Setting your consulting rates involves a little art and a little science. And it involves some emotional resolve – knowing what to charge can stump anyone.

Working through the filters around setting consulting fees

Depending on your approach to setting your fees, you may see your rate through certain filters. For some people, having a formula for setting fees gives them confidence. They prefer to see things through a scientific lens, with consideration for costs, overhead and their opportunity cost (the salary they would make at a job). Some people like to have a rule of thumb, such as my suggestion to double or triple their hourly salaried rate. Others like to take a look at market and competitive conditions and adjust accordingly. Still others like to look at the prices of substitutes. There’s a great article on setting your consulting fees on our site and it’s our most popular piece.

What to charge for consulting gets influenced by feelings

Many people, though, get caught up in a bit of emotional overwhelm – part of the stress, good or bad, of being a business owner. That’s because setting consultant fees comes down to more than just a set of calculations. It involves knowing your market, competitors, core competences and the value of your solutions. It involves managing the actions and reactions of prospective clients, clients and competitors. It does no good to simply work through a consulting fees calculator and say, “Hey, there’s my new hourly consultant rate and that’s what I’ll charge!”

Best to move away from hourly consulting fees

While Consultant Journal’s article on setting fees walks you through some models, I don’t actually suggest you stick to an hourly rate or simply price like your competitors do. That’s because charging by the hour is a long-term trap. Really, it makes sense to move to a model where you charge a fee based on the value your solution provides to the client. This Solution-Based Fee pricing approach makes the most sense. Otherwise, as you become more effective at what you do, you’d have to pad your hours to keep up. If you used to make $80 an hour and now you can do the same job in half the time, you’d only make $40. You would then either have to act unethically and charge the client for time you didn’t use or you’d have to get used to making less and less money or serving more clients in less time. That’s not really a recipe for a success – it’s unethical and too difficult to manage. In comparison, Solution-based Fee pricing relies on the value of the solution you offer and gives you the chance to also look at return on investment, opportunity costs, substitutes and downtime that your client would otherwise incur.

Yet hourly consulting rates may work for you

That being said, there’s nothing really wrong with sticking with an hourly rate if that’s where you’re most comfortable. I know I am a bit of a lone wolf in saying that. But the most important thing about setting your fees is that you’re able to negotiate from a place of strength. If you feel the most comfortable charging an hourly rate based on the models in our consulting fees article or those outlined in more detail in my book, Consulting Fees: A Guide for Independent Consultants, you may actually do better in sticking to that hourly rate. That’s because part of being effective in any sales process involves being confident and prepared. So my book on setting consultancy fees goes into detail about managing client objections and the sales process, as well as your own emotional reactions. Your consultancy rate really involves more than sticking some numbers into a calculator and coming up with an answer.

Breaking through emotional roadblocks for fees

Depending on how or where you grew up and what experience you have had in your life, you may have some emotional attachments to money that affect how you price your services or react to clients. Over the years, I have been surprised by how many of the consultants *I* have hired have been timid in being clear about their fees. I’ve sometimes had to ask people outright to tell me their fees, because they’ve been so hesitant about it. This has applied to both men and women and people charging fees that are $15 an hour and people charging several hundred. However, I’ve noticed that people who are confident in their fees, even those who charge an hourly rate, are very clear on the value their solutions provide and they are very clear on their market, competitors and the benefits of working with them. My book on consulting fees goes into detail about how to work through those situations because I have seen for myself the difference it makes. In fact, in my 20 years in marketing, I’ve used a similar approach for all my clients and even employers – at its core, working through consulting fees involves business and marketing planning.

What do you find most and least effective in working out what to charge for consulting?

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Marketing your business involves ongoing decision-making. You may be wondering if search marketing could be right for your business. Here’s a brief guide to search marketing.

What is search marketing?

Search marketing involves promoting websites by making them more visible in search engine results. This may be through search engine optimization – managing websites to make them appear higher in search results – or through paid inclusion, where you pay to be included in search engine results. Paid inclusion may mean paying to be listed in a search engine or it may include pay per click ads.

Who does search marketing?

You can do search marketing in house, through contractors or by working with a dedicated search marketing team. In the past, I’ve worked with Danny Blea from The Search Source, a search engine marketing consulting firm, but I’ve also carried out extensive campaigns for my business and those of my clients. And, by putting simple strategies in place, I’ve been able to have my assistants and contractors carry out that search marketing for me. It really comes down to your budget, your available resources, your desire to be involved in the process and your comfort in handing off the work to a dedicated professional team.

How does it fit with reputation management?

Search marketing can also be part of your reputation management. Not only can you help make sure people find you online, but you can also work toward having them find the results you want. In some cases, you may find that unfair or undeserved customer reviews are popping up at the top of results for your company name. Or perhaps a news story or other unfavourable result shows up on the first page of results in search engines. By putting together a reputation management program, you can bump those results away from page one, so that clients can instead focus on current, relevant information from sites you control.

Points to ponder before you start search marketing?

Who are your target customers?
What ways are they finding your website now?
What words and terms do they use?
What else shows up when your customers search for you?
Do you have undesirable results showing up in searches for your personal, product or company names?
Do you have the resources and desire to manage search marketing in house?
What do you want to achieve?
What existing resources can you leverage to kick off your search marketing?

Are you using search marketing for your business? Leave a comment below to start the discussion.

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