Transcript

Episode 122: Do You Need to Give Your Consulting Services Away for Free?—with Deb Zahn

Deb Zahn: Hi, I want to welcome you to this week's episode of the Craft of Consulting podcast. So on this podcast, I'm going to answer a big ticket question. It's one I get a lot, which is when I first start consulting and I haven't built up my business to the degree that I want to, shouldn't I just be doing some consulting for free, right? Until I build up my portfolio, shouldn't I just do some things for free? And then I'll start charging later. This happens a lot. It comes up a lot. I got a short answer, and then we're going to dig into why I'm answering this way.


So you can probably guess my answer is going to be no. In almost every instance I can think of, I would not encourage anyone to be doing consulting for free. And I know a lot of people do it, and I really understand. I get the temptation of why you'd want to do that. And I get why you might think that you have to. So you might be thinking, "Hey, look. I don't really have any experiences as a consultant that I can point to, to try and get business. I don't have any consulting projects that I can go in and talk to a prospective client about. I don't have any results that I could brag about and show them that, yeah, I can actually get the result that you want because I haven't done any consulting before." And that is all true. And none of that, not a single bit of that, is a good reason to not charge anything when you first start consulting and when you're trying to build your business.


Because here's the reality. If you've achieved something in your past work life or you contributed to achieving something in your past work life, if you were able to do good things in a work world, then you have what you need to be able to get business and succeed as a consultant. You've got the experience, you've got the examples, and you've got results that you can point to. That's already in your pocket. Just because it was something that you did in a past work life, it doesn't mean it's irrelevant. It's tremendously relevant.


And in fact, it can be even a more powerful example because you had to do it in a real-world setting. You had to do it working within a company or within an organization with people that you know, and you must work with every day. You are not parachuted in like most consultants are, and we get to ignore not all but a lot of the messiness that can make it difficult to achieve things within organizations and with companies. You had to do those things when you were part of that messiness. And those can be really powerful examples when you're talking to prospective clients because they don't want to know that somebody just knows how to do this theoretically. They want to know that it's something that you know how to do, and you can use your past experience to be able to demonstrate that.


But there's lots of other reasons not to do it, and I want to dive into what some of those are. And then I want to talk about six ways to understand and approach this that's going to help you, hopefully, get past this fleeting desire to do things for free.


So first, clients are not going to value your work as much as if you do it for free. They might like that they don't have to pay for it, but even if it's not on a conscious level, they are not going to value it as much because the reality is that price communicates value.


So if you're doing something for free, and you are not a designated volunteer doing that for free, which I encourage…I do volunteer work. Most consultants I know do. That's a wonderful thing to do. But if you're doing that flying the flag of a consultant, without knowing it, you are communicating that what you offer and what you can help them achieve isn't valuable. And I want to give you an example from the non-consultant world example that really just hits this on the head for me.


I live in a rural setting a few hours north of New York City in the U.S. And when we first moved here, our neighbor who's always lived in a rural setting was telling us some important things for us to understand. And one of those things he said was, "Look, if you want to get rid of something, let's say you have a sofa and it's a perfectly good sofa, but you got a new one and you want to get rid of your old one. And you don't want to have to worry about charging for it or anything like that. If you set it on the curb and you want somebody to take it, don't put a free sign on it. Because if you put a free sign on it, people are going to assume it's not worth it or that something's wrong with it. Instead, put a sign on it that says 10 or 20 bucks, and then someone will steal it."


I thought that was some of the best advice he could possibly give us, and it rings true with this. So even though it is just as valuable with a free sign as it is when I'm asking someone to pay for it, they will inherently think that something for free is not as valuable. So that's one of the reasons to not do it for free because you must understand you're going to be communicating value to them, and you're not going to be communicating it in a way that is going to make them think that they're really truly getting what they most need.


That understanding that charging is really about an exchange of value. Clients are giving you something in exchange for something. Not only is that a perfectly legitimate way to do it, but it also makes sure that they have skin in the game. If clients don't have to give anything to get that value, the truth of the matter is they're not going to have as much to lose if it doesn't go well...or if they don't get the result. If we're in the business of change, and that's truly what most consultants do. It doesn't matter what particular type of consulting you do. You're trying to get something good to happen or to avoid something bad happening, and that's change work. And it works better if clients have some type of a skin in the game for that to actually occur. And part of that is what charging is all about.


Here's another reason I wouldn't do it, and I wouldn't encourage anybody else to do it. As you start to build up your client base, a good chunk of the clients that you're going to derive your income from are going to be your past clients. I had a previous guest on, Candace Washington, who is absolutely fabulous. And she actually knows the math, which is that 80% of your business is going to come from 20% of the clients you've worked with in the past. And by the way, if you haven't listened to that episode, it's absolutely worth it. It's all about client experience and making sure that it's driving your business goals and not driving your business into the ground by a bad experience.


In any case, if you do great work for a client, they're going to want you to do more for them, or you're going to see other ways that you can help them. And unless you want to continue to be a volunteer, you're going to need to charge them. Well, now that's an awkward conversation because they just got what they got for free. And now you have to switch to charging them. And now you're in this really awkward negotiating position of now whatever price you name, it doesn't matter if that is a low price, meaning that you're underpricing yourself, which is what I often see happening...whatever price you name is going to be compared to zero. So anything will seem high because it's being compared to what you've charged them the first time, which was nothing. They won't necessarily easily be able to grasp that this is about the value of what you can do for them because that was great, but they got it for free before. So why should they think it's now more valuable that they actually pay for it?


So it puts you in a really awkward position of now having to negotiate a price and negotiating it against zero. I'm going to keep giving you reasons why I think this is a bad idea. The other reason is I think it sets up a bad precedent for future clients in your market. So one thing you have to know, if you're within an industry or you're within a market, people talk. They're not necessarily going to keep it to themselves. They're going to tell people, "Hey, got this great consultant, and she did it all for free or he did it all for free." The folks in your market are going to think, "Hey, I want them to come do this for me for free." So they're going to hear about this. Now you're going to be out in your market, and you're going to be again in the awkward position of negotiating against zero.


Or, say, you're in your market, you get a client, you charge them and then they hear later on, "Oh yeah, yeah, they did that for me for free." That doesn't feel good when you're a client. You now feel like you've been ripped off. So you have to think about whenever you're communicating to one client or one prospective client, whether it's about price or about anything assume that you are communicating within your market and to others within your market, even if they're not directly in front of you. So that's why charging and setting up the perfectly normal precedent of charging as a consultant is going to help you be able to not only get business with other clients, but also make sure that you get paid for every tiny itty bitty bit of the value that you're able to bring to them.


So overall, I would say it's important to think about your business as a business, right? So you're not just consulting in doing good things for companies and organizations and people. You are in the business of consulting and therefore should be thinking about the decisions you're making as business decisions, and business decisions within a larger ecosystem. So there's no decision that you're going to make that is singular. Decisions you make affect other things. There is a ripple effect. So if you decide to work for free, even if you think that there are some legitimate business reasons to do that, just know that it's going to have a broader impact than that single decision. It will have a ripple effect within your larger business and you have to be prepared for that. Or that should be a reason that you pause, and you think, "Wait a minute, why am I really doing this? Am I really doing this because this is a good business decision? Am I really doing this even if I think it's really honoring my client, or am I doing this for some other reason?"


And here's the thing, mostly when I dug into why people are thinking of doing things for free when they first start up, it has nothing to do with business decisions. Let's just be honest with each other. I feel like I have to whisper it. Like, all right, let's just talk honestly now. Generally, it's more about a lack of confidence than it is about real business decisions, right? So let's just call it what it actually is. It's often a crisis of confidence or you're unsure about what your worth is. So you think, "I have to do this for free." And in fact, you might just be trying to convince yourself that you're worth it and you're not ready yet. So you're going to do the work, but you're going to do it for free.


I actually want to give you six things to understand, and to know when you're approaching this crisis of confidence that is trying to convince you that working as a volunteer instead of a paid consultant is the right thing to do. And again, not knocking volunteer work. I think make your volunteer work your volunteer work, and your business work your business work.


But let me say this first thing. First, if you're having that feeling, if you're having a crisis of confidence or you're just like, "I just don't think I'm worth it, and I can't believe I'm going to have to name a price for something that I do," it is 100% normal and common.


Most consultants I know have felt some version of that when they first started. I know that I did. So I was just lucky because I started off working at a firm so I didn't actually have the luxury of doing something for free, but I probably would have if I could have because I was not feeling confident about asking people to pay me for specific work, which is kind of weird because when I was employed, I had no problem being paid for the work that I was doing. Just somehow or another, now that it's a direct exchange, it just feels different. And I wasn't feeling like it was normal. So you're not alone. Lots of folks have felt this. It's important to recognize that so that you can get beyond that.


So the second thing I want to say is if you're having a crisis of confidence, it's just a feeling. And I love feelings. I think feelings are great. You're going to have a whole lot of them as you go on this consulting journey. You're going to have good. You're going to have bad. You're going to have everything in between. But they're just feelings. And it's best not to get in the habit of making business decisions based on feelings and particularly feelings that are going to be fleeting.


I've got some cats arguing about this in the background. So they totally agree with me on this. They're just feelings. That's not what I would base any of your business decisions on. You got to go broader than that. Instinct absolutely. Logic absolutely. Feelings, yes. I think they absolutely should be in the mix, but they should not be dominating the day because if they do, it's going to be very difficult, if not darn near impossible to build the business that you ultimately want to have and have the life that you want to have as a consultant.


So three, here's the other thing to keep in mind. Your price and charging a client that price has nothing to do with your worth as a person. It's about what it's worth to the client to achieve the result that they want to achieve. So if you have the expertise and the skills to help them achieve those results, that's what the price is about. That's why you're charging them. It's not about you and your worth personally. And it's easy when you're a consultant to think that it is, to think that what you're saying when you are naming a price for a particular project or scope of work, is that you're basically saying, "Excuse me, I think I'm worth X." And then they're going to say, "Are you really?" It has nothing to do with that. It's all about the value of what you can ultimately do for them.


That's almost a habit of thinking that you have to get into, but it's good to just keep repeating it to yourself. It's about the value of what you can help them achieve. It's not about your value personally because feelings of self-worth go up and down like a roller coaster all the time, particularly when you're doing something new, and you get hit with imposter syndrome or whatever else comes up. That's why you don't make business decisions based on that.


So number four. Clients expect to pay for consulting, right? It's not weird for a consultant to expect to be paid. So once you actually call yourself a consultant, right? So instead of calling yourself a volunteer, once you call yourself a consultant, clients generally expect that there's going to be an exchange of money for work. They just know that. And so trust me when I say they're not going to be surprised. And the real conversation again that you want to have is the value of what they're willing to pay for what they're going to get out of hiring you as a consultant, not whether or not they are going to pay you as a consultant. Most folks know.


That doesn't mean that there aren't folks out there who aren't going to try and get it for less or try and get it for free. That's a whole other podcast to talk about how to negotiate that. But they expect to pay for it. So you're not saying anything that's weird by saying, "Here's the scope of work, and I'm going to charge you for this." They really do understand that that's part of the deal and part of the conversation.

So then five, here's what it really about is that when you start consulting and when you're trying to build your business, it's really about having the right skills for getting business. For most of us, that's nothing we've ever had to do before, unless you happen to be in sales and now you're a sales consultant. So the skills have to be acquired and countless consultants before you have had to acquire those skills in order to be successful. I did not have them when I first started. It was a mystery to me how I was going to get business and get people to pay me for doing things that I knew I knew how to do. I had to get those.


Once I acquired those skills, then it didn't really have anything to do with my price, and it certainly didn't have anything to do with charging. That really didn't matter because fundamentally that really wasn't the issue. The issue was understanding how to get information out of prospects so that they understand and you understand what they need. That they're able to articulate what they're willing to pay for. And all the things that you can walk through to be able to ultimately close the deal. Or how to do marketing to get people to be aware of who you are, then interested in who you are, and then start to desire to work with you. And then to convert them into clients so you can help them do wonderful things. That's what getting business is about. It's not about whether or not you're fundamentally worth it as a person. It's really just about getting those skills.


And you can get those skills. I got them. Most consultants got them, and they were able to get clients because of it.


So six, this is the last one that I'll say. It's OK to be paid for helping clients. And I know this can be a big sticking point because a lot of people get into consulting. And I'm so thrilled that so many people get into consulting because they want to help people. That's why I got into it. I didn't just do it because I wanted to make a whole bunch of money. I did it because I truly want to help people. And it is OK to be paid and to earn your livelihood by doing that. It was OK for you to be paid as an employee. It was just a different arrangement. You still got paid for doing good things. You just got paid in a different way and under different circumstances. You didn't question it then, so there's no reason to question it now. Why would you question getting paid as a consultant? It's a normal course of what being a consultant is.


I would say just focus on being as valuable as you can possibly be and helping your clients in the best possible way and giving them the best possible experience they can have. And if you do that, they're going to know that you are worth every penny that you are charging and more, and then eventually you'll start to see it too. Hopefully sooner rather than later, you're going to believe that you are absolutely worth getting paid because of the wonderful things that you can help clients achieve. And you get to then earn your livelihood as a helper, which is a wonderful way to make a living.


So I'm going to end with this. Remember, you are the CEO of your business and even if you haven't quite got used to that role, right? Maybe it's like wearing an item of clothing and it doesn't quite feel like it fits yet, and it's kind of uncomfortable and it's kind of itchy. That's OK. You still have to treat your consulting business as a business. And the more you do that, the more successful you're going to be. And then as you're able to succeed more, this is the beautiful thing, the more organizations, the more companies and the more people that you're going to be able to get out there and help them achieve what they want to achieve and help them succeed in the way they want to succeed. So it ends up being this beautiful way to do good in the world while earning the livelihood that you truly want to live.


So that's what I wanted to tell you. Big gigantic no for doing things for free. Maybe there's some circumstances that I haven't thought of, but I don't think in most instances it's the right thing to do. The right thing to do is go get those skills so that you can be a successful consultant and CEO of a consulting business. So, as I said in this episode, if you get past any confidence issues or other reasons why you are thinking, "Oh, wait, I need to offer my services for free in order to make it as a consultant." If you can get past that and hopefully when you listen to this episode, you said, "Yeah, yeah, this doesn't make any sense for me," then you come to the point where you have to make decisions about, "OK, if I'm not going to do that, what am I going to do instead? How am I going to get business in the door once I've taken that off the table?"


Part of this is because, look, I'll be totally honest with you, the first couple of years of consulting are absolutely the make-or-break years. So usually you try and get as much business as you can. You try and make it work in the first six months. Maybe you get a little, you try and get more. But really within that first two years is usually when people say, "All right, I gave it my go and either this is working or it's not working and I have to go back and find a job."


Now, if you really don't want to go back and find a job, I want to make sure you don't have to do that. I don't want to go back and do that. I want to stay as a consultant doing the good work that I love to do that I find fulfilling and is worth it to get out of bed every morning. And I also, hopefully like you, want to make sure that I have the life I want. I still want to do my garden. I still want to hang out and go kayaking with my mom. I want to hang out with my husband. I want to rescue a ton of kittens. (Don't tell my husband I said that, but I kind of do.) I want to have the life I want, and consulting lets me do that. I want you to have that too. So I don't want your first two years to be make it or break it. I want them to be the make it years where you really show yourself that you've got what it takes to do this. There's no reason you can't be wildly successful, and you've proven that to yourself.


So to make it easier for you, I am actually going to be offering a course that I put together where I'm essentially sharing how I am a consultant who's able to bring in six and seven figures every single year. And it's called Get More Consulting Business Faster. It's exactly as I describe it, which is my playbook for how I get business. I actually use things in this playbook right now. I'm using them to get clients right now. And I know that it works because I've shown that it can actually work. I know it can work for you as well. So I'm opening up that playbook. You're going to know if you take this course exactly how to forge your path to success, and you're going to create those make it years that you really want to have.


So if you're interested in taking this course, learning how I get clients, learning how I get repeat business, learning how I fill my pipeline, I want to make sure that you have access to that. And you can go to my website, craftofconsulting.com. You can go to “Get Help.”. There's a link to it. And on that link, you can get all the information about how to take this course.


There are some really good juicy bonuses that come with it, including the ability to get some coaching from me directly. So if you've got something that's particularly hanging you up, you don't know what to do about it, a problem that you need solved, or you're feeling a little wavery in terms of whether or not consulting is going to work for you, you will be able to get some direct coaching from me and you're going to be taking the course. And the course is action packed.


So it's not just you sit back, you passively learn. You'll learn, you’ll do something. So you're taking action the whole time. And by taking action the whole time, you should have a consulting client by the end of it or you should be well on your way to getting that. So check this out.

I think it's going to be tremendously helpful for you. I just had a few folks that took it, who told me they went from zero clients...zero clients to completely packed in their consulting business within three months. So this is definitely possible.


You can make this work for you and I want to give you an opportunity to do that. So check out the course, and I think you'll find that it's basically what you need to break through anything that's not working for you right now. So thanks so much for listening to this episode and I will be back next time with a fantastic guest.


Thanks so much for listening to this episode of the Craft of Consulting Podcast. I want to ask you to do actually three things. If you enjoyed this episode or if you've enjoyed any of my other ones, hit subscribe. I got a lot of other great guests that are coming up and a lot of other great content and I don't want you to miss anything. But the other two things that I'm going to ask you to do is, one is, if you have any comments, so if you have any suggestions or any kind of feedback that will help make this podcast more helpful to more listeners, please include those.


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So as always, you can go and get more wonderful information and tools at craftofconsulting.com. Thanks so much. I will talk to you on the next episode. Bye-bye.