The Organizational Development Muse

Dr. Mark L. Vincent's Blog

Our Commitment to Objectives Pricing in Organizational Development

Posted by Mark L. Vincent on Jan 7, 2013 6:13:00 AM

Our Commitment to Objectives Pricing in Organizational Development

Nearly all our clients like our pricing approach to providing organizational development services. We price our Consulting Agreements based on the objectives they contain and normally price it inclusive of all expenses. Most clients warm to this approach because the logistics are easier for them and for us. Both the client and consultant can focus on the project and not have to devote unnecessary time to small administrative and ancillary matters.

We occasionally have clients for whom this is not satisfactory, however, and they request us to divide out the Agreement based on each objective, to break out the expenses, or both. This may be because:

  • They intend to pay for specific objectives or expenses out of different accounts, or across subsequent fiscal years. Their accounting system simply demands it.
  • They are concerned they will be overcharged and want to make sure we are not padding our prices.
  • They are unfamiliar and uncomfortable with this style of pricing.
When this happens, especially the last of these, we want our consultants to demonstrate a timely cooperation with this request, and to make use of the following talking points as appropriate:
  1. We understand why they need or want a more complete breakdown, and that we are willing to provide it.
  2. We do not break down our services by the time it takes but for the completion of the objectives and the expertise we developed to complete them. This is what we will track and should be considered the point of accountability. If a client wants us to bill for time, we can accommodate this with some services, but we normally bill by the day and normally only in a consultative role or when serving as a plenary speaker or trainer. We do not bill by time when working at projects as it takes attention away from the objectives.
  3. When we break down objectives into an a la carte list of actions and prices, the total will be higher than the Agreement as currently written because we can no longer assume that our cost to set up and administrate the Agreement will be spread across the whole, or that there will be a capacity to interlace our actions in an efficient way since all the parts are being separated. Our cost to set up and administrate an Agreement is close to the same for Agreements of all sizes, so Agreements the way we prefer to write them actually drops the price overall.
  4. If expenses need to be broken out separately, it too raises the price because we now have to recover the cost of the extra administrative action to track, report and bill for expenses.
  5. If a client wants us to phase our services (we often do this with capital campaigns and other services that can be laid out in a sequence), the first phase will have setup and administrative costs built in for all phases, and may appear to be priced disproportionately.
  6. We do not break costs down any more specifically than what is detailed in these first five items.

If a client is not satisfied with these responses, we tell them we appreciate their concern and hope they will talk to other service providers who might provide the information they are looking for and which we do not. We consider it good form and a demonstration of goodwill to recommend someone we think might be more satisfactory should we have someone in mind.

If a client still remains unsatisfied and pushes harder, we gently play our trump card. Our pricing structure is proprietary and our consultants are restricted from being more revealing than this.

If a client still seems troubled by the way we develop our Agreements, we invite them to contact me directly as the company CEO and register their concern. Of course, if they are still pushing at this point, it becomes a legitimate concern to us whether this is a client with whom we can be productive. They are demonstrating that they are focused on the way things are than the way things can be. That is, they are making themselves an obstacle against the items for which they are asking help. To get beyond it invites yet another service, we provide:  Executive Coaching. 

mark l vincent, organizational development, untying organizational knots, design group international
Fish-Kill Cliff, Fiscal Cliff, Whorled Viewz, Emell Vee

Topics: process consulting, Client Agreements, organizational development consulting, Mark L. Vincent, Design Group International, Consulting Agreement

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