Page 44 - 25148.pdf

32 • The 100 Greatest Ideas for Building the Business of Your Dreams

Idea 19 - Seeyour value from the customer's
point of view

For many years I have offered consultancy services from a company that consists
only of myself. I am a one-man band. I did a planning job once for a big electricity
company. The job was phase one of three phases and we completed it successfully.
Indeed my main sponsor was delighted. When it came to phase two, the amount of
money at stake meant that according to their purchasing rules they had to go out to
tender. My sponsor was pushed towards McKinseys who, at the time, were doing a
lot of work at holding board level, as well as inviting me to bid. I was working with
two operating company boards.

Now, since they had used my processes for phase one, it made almost no sense
at all to change consultants for the second part of the project. I knew this, of course,
and decided to go in at the highest price I dared. I really loaded my quote and
waited for the reaction. It came through a telephone call from my sponsor. He
sounded concerned and embarrassed and I feared the worst. 'Ken,' he said, 'I've got
a problem with your price.' 'Oh my God,' I thought, 'I've overcooked it,' and I
started stammering about how we could probably take another look at it. He agreed
with this and suggested that I took another person onto the project and 'make it
more of a team approach'. 'But that will make it more expensive', says I. 'I know,
Ken, the problem is you are more than £200,000 lower than the McKinsey quote. I
can't take your number in as it is, the purchasing people will laugh you out of court.'

So, I took another guy on and shoved the price up to what was for me a
stratospheric height. We got the business and we certainly holidayed well that year.

Daily rates can be an emotional business. Customers who have not done the
calculations shown in Idea 17 do find daily rates high. There are emotional hurdles
to get over as well. I think one is the £1000 mark and when my daily rate was
approaching this figure I spoke to a colleague in the advertising business and he
suggested I soar way above this figure rather than go in at such an emotional rate.
With my heart in my mouth I went up from £900 to £1150 in one jump. It worked