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Topic: Strategy

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Consulting Agreements

Posted by JBtron on 250 Points
Everyone:

I need to find out what the standards are for Strategic Marketing Consultant Agreements regarding pricing. I will be working on a number of projects as a consultant, and not having done this for a while, I want to check on what the latest trends/rates are for marketing consultants before I commit to a few projects.

Previous questions in the KHE archives have dealt with Value-Based Pricing for consultants, so we don't need to go THERE.

What do you know FROM ACTUAL EXPERIENCE or from credible web-based sources?

Best,

::JBtron

  • Posted by MONMARK GROUP on Accepted
    Personal Experience: This is how I price myself, using a standard consulting contract.

    Four tier:

    Retainer: $XXX per month

    Hourly: $XXX per hour w/ 4 hour minimum

    Retainer/Commission: In area of Collaborative Marketing, I find business under specific guidelines agreed upon in advance w/client. I earn $XXX plus a % of Gross Amount of contract I assist to secure for cleint for duration of new business agreement. 60 day buyout should agreement be cancelled.

    Hourly/Commisssion: Same as above in CM area.

    The client appreciates the options and it gives them a firm base within their budget constraints.

    Hope this helps.

    Randall
    WMMA
  • Posted on Accepted
    Hi JB

    Just US or Intenational?

    Depends, hate to say it, short or long term projects, relationship of your clients? Will they pay the going rate?

    Sure there are industry figures but the ones I did have were for the UK and I don't know if it greatly varies across in the US.

    I'll dig them up if it helps?

    Thanks

    Zahid Adil

  • Posted by Blaine Wilkerson on Accepted
    JB,

    My fees tend to fluctuate based on the size of the organization. Ususally, the bigger the company, the more you have cut out for you.

    When submitting quotes from start-ups to small enterprises:

    Intial Retainer: $5000.00
    Upon Delivery: $2500.00
    Elective Monthly retainer: $1500-$5000 depending upon the time and complexity of the plan.

    Optional Fee for Per Diem work (i.e. Review of mplans, bplans, and simple advisory type projects that involve editing/proofing work previously done by the organization - "Thumbs-Up Service"):

    $150/hour - East coast, Canada, and Europe
    $130/Hour - MidWest and Australia
    $110/hour - West Coast, Asia, Africa

    4 hour minimum.

    Of Course, I tend to "flex" a little when necessary. I would rather have a solid client base for a few dollars less than no clients at all.

    Hope this helps!
  • Posted by JBtron on Author
    To All Who've Replied,

    Thanks for the input. Good Stuff.

    I'll leave this open overnight so that the far East and West can chime in before points are distributed.

    Thanks, y'all!

    Best,

    ::JBtron
  • Posted by telemoxie on Accepted
    Another source of detailed information on pricing strategies in the US is GSA Schedules. Check out the AIMS schedule, which are detailed pricing schedules which have been "negotiated" with GSA.

    You may find some of the verbage and descriptions of services quite handy - but you may need to take some of these prices with a grain of salt... Washington DC is, of course, the home of the legendary $435 claw hammer, $640 toilet seat, and $7,600 coffee maker.

    Here is a link to GSA info:

    http://www.gsaelibrary.gsa.gov/ElibMain/ScheduleSummary?scheduleNumber=541&...
  • Posted by ASVP/ChrisB on Accepted
    JB

    Range for strategic consultants here in Australia is

    - Tiny, un-corporate "contractors" A$300 - 800 per day.

    - Boutique firms A$2000 - A$3500.

    - Big 4 Accting firms A$3000 - $8000 or more (!!) per day.

    I tend to look at what I think the value to the client will be, then negotiate. Sometimes, smaller clients especially, can't or won't pay realistic rates. Other types of deal can be done - deferred payment, sweat equity, etc.

    Australian Dollar = approx US$0.70

    Hope this helps

    Chris
  • Posted by mgoodman on Accepted
    JBtron:

    I've been a full-time management consultant for 25 years now, specializing in branding and marketing strategy. I also do quite a bit of work in pricing strategy, and I have come to some interesting conclusions that apply to your question.

    First, per diem pricing is a losing approach. The client is always watching the clock, and the consultant is motivated to be inefficient. It breeds distrust and serves nobody well.

    Retainers are nice, but not very practical unless/until you've established a solid working relationship and mutual trust/respect with the client.

    That leaves project pricing as the best way to go. You estimate what the project will take, what it's worth (to you and the client), and commit to a fixed fee for defined deliverables. If you work efficiently, you make out a little better. If you're inefficient, it's your problem, not the client's.

    Now for the magic number: It depends. The effective daily rate can range from $500/day to $3,500/day. There are lots of variables and considerations. Generally, something in the range of $2,000/day is considered about right for high-level strategic consulting -- but it varies considerably, based on the specific project, client, consultant's needs, etc. Also, if you are very efficient and have a fixed project fee, the effective rate can be closer to $3,000/day. Of course, if you're not so efficient, it can slip to $1,500/day (or less) just as easily.

    If you want more on this, there's detailed discussion of how to price consulting services in "Rasputin For Hire : An inside look at management consulting between jobs or as a second career." (www.rasputinforhire.com)

    Good luck. Let us know what you end up doing and how it works so we can all learn from your experience.
  • Posted by JBtron on Author
    To My KHE Colleagues,

    GREAT STUFF HERE, FOLKS!

    NOW I understand why I keep on logging in!

    In my mind, it's important that you learn something new every day, and KHE usually provides a week's worth of learning every day!

    In the meantime, I hope you'll still read a few of my branding and strategic insights as they come down the road.

    And, by the way, this REALLY helped!

    Best,

    ::JBtron
  • Posted on Member
    Hi JB

    Sorry didn't back to you earlier.

    I work similarly like Jim on RFPs with a mixture of retained and smaller projects.

    Rates in the UK vary widely depending on your specialism. Our rates vary from £500 - £1200 daily for a multitude of service offerings and are flexible on longer engagements. Larger boutiques are almost double.

    Hope this helps.


    Zahid Adil

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