Episode 150: Pricing for a Profitable Consulting Business—with Ruth-Joy Connell
Deb Zahn: Hi. I want to welcome you to this week's episode of the Craft of Consulting Podcast. So this episode is all about pricing. So if you need to figure out what your price should be or you need to figure out how to get your price in the right spot if you suspect it hasn't been, this is exactly the episode for you. I brought on someone who is a pricing and sales expert, Ruth-Joy Connell, who is from RJC Consulting Global, and she's going to walk us through the pillars that she helps consultants and consulting firms go through to make sure that they get to a price that makes sense for who they are and what it is they're able to offer to their clients. We also dabble a little bit into how to set up systems so that you have predictable sales, which is so important when you're a consultant. So I can't wait. This is so exciting for me to talk about this really, really critical topic. Let's get started.
Hi. I want to welcome to the show today Ruth-Joy Connell. Ruth-Joy, welcome to the show.
Ruth-Joy Connell: Thank you, Deb. I'm excited.
Deb Zahn: So let's start off. Tell my listeners what you do.
Ruth-Joy Connell: I run a revenue operations consulting firm, where we specialize in working with other B2B, either owners or companies, and really helping position them for long-term success by putting systems in place. One of the systems that we're going to be talking about today is pricing and really how to address that. So that is a little bit about the work that I do, and a little bit about me as a person is I absolutely love travel. It's one of the things I love to talk about. So I love to travel. I am a wife. I am someone who loves to explore different things and loves to spend time outside. So that's just a little insight into me as a person.
Deb Zahn: Love it, and that's why you got to get your price right.
Ruth-Joy Connell: Yeah. Exactly. I have to be able to afford all this travel.
Deb Zahn: That's right. So let's start off. I know that you differentiate, and I think it's so critical for folks to hear, revenue versus profit because that's really at the basis of talking about price.
Ruth-Joy Connell: Yes.
Deb Zahn: So distinguish that for folks who don't know.
Ruth-Joy Connell: Certainly. So revenue refers to all of the income that comes into a business. So no matter how it comes in, typically, revenue is anything that's accounted for. So it's like a large bracket that covers all of the money that comes into your business. Now, profit. There's gross profit, and there's net profit, but profit in general refers to the money left over after you have paid for all of the expenses as well as operating costs to run the business. So after you have paid anybody on your team, paid for things like software, no matter how minimal that might be, even if it's something like Zoom or paying for tools like Slack, no matter how minimal, once you've paid for all those things, the money left over is what you're looking at as profit, and that is so important because it's really what allows your business to thrive and not just survive.
Now, I've found, Deb, that a lot of us who are...especially in the B2B space where you are working with contracts that typically are going to be five figures upwards, it's really easy to feel like because you're getting a lot of revenue in, there's an automatic sense of profitability like, "Oh, we are doing good. We're growing." However, what we have found is that that can only last, like that facade only lasts for so long, and especially the more revenue you bring in, you'll notice that there's a profitability problem when it affects your systems and when you see that you're limited in your ability to grow your internal capacity. That's typically where we see clients looking at, "OK. Something is wrong because we're making money, but we don't have enough money to hire," or, "We don't have enough money to improve our systems," or et cetera. So that's really why profit is so important because it positions your business for sustainable growth and not just short-term success.
Deb Zahn: I love that because I definitely have seen folks who land six, seven-figure contracts. They're like, "We made that much money," and no, you didn't. Yeah.
Ruth-Joy Connell: Exactly.
Deb Zahn: So that. I think that's really helpful. So let's get some of the bad stuff out of the way first. So if you had to pick two or three of the top mistakes that you see consultants make when it comes to pricing and their price as it relates to their profit, what have you seen?
Ruth-Joy Connell: Yes. OK. So I think the top one that I'm going to lead with is this idea of charging for worth. Now, I've spoken about this in different areas, but I think this mainly affects women who are in the consulting space, and it's become a thing in social media about charging for your worth, et cetera. Really, the way that we like to distinguish this is that you were never charging for the value you are. You are always charging for the value that you add, and so it's really important.
Whether or not you verbally say that phrase, "Charging for your worth," some of us have internalized that thought process of, "This is what I believe my work is worth, and so that's where we lead with the charging." What that does is it shifts the focus off of your client and the problem, or the challenge, or the goal that they're looking to solve, and it puts that focus on you as the service provider. So when you're communicating, it distills your communication because you're now leading with, "Well, here's why I'm charging $10,000 because we have to do this, and we have to do this, and we have to do this."
When the client is not concerned about that, that has nothing to do with them, they're trying to figure out, "How can we solve this problem? How can you help us accomplish this goal? How can you help us achieve our objectives?" So what it really does, that thought process, it shifts the communication, and it makes it less effective when you are presenting. Especially if you're charging a higher price point, the communication has to be there to instill the confidence within your client so that they are...or your prospect actually, so that they can become a client and then be willing to work with you. So that's definitely one of the biggest mistakes that I see or one of the biggest challenges, I guess, to shift away from when it comes to consulting.
Deb Zahn: Let's actually pause it because it's huge. I mean, I see this, and you're right. I see this a lot more with women who I think have internalized that it's all about our value and we've internalized deflating our value artificially. So when you're working with someone and you see that they're doing that, what kind of things do you do with them to help them get the price where it should be rather than a reflection of how they're feeling about themselves?
Ruth-Joy Connell: Yeah. The way that we do that, first, is by calling it out. So I always like to, first, validate that how you feel about your work is important. It is of value and really want to call attention to that. However, then what we do is work with them to really differentiate, "OK. What is professional, and what is personal?" because these feelings are real. They exist, and there's nothing wrong with them, but we do have to put them in context and make sure that things are where they're supposed to be.
So a lot of the time, this comes from our own personal money experiences, our own personal...whether it's challenges or the things that we have faced in our own life around money, and our scripts, and our relationship with money. So it's identifying that these things are in fact true. They are in fact real. However, when it comes to business, we do have to separate it because your business experience is one that you can build from here on out. It doesn't have to be the story of your past. Right? So you can create a new experience with business...with revenue and with money in your business, and you can even allow that to inform and seep into your personal life. But for now, at least while we're together, this is what we're going to focus on.
I always do encourage people to challenge those scripts, to challenge those thoughts that they have with money. It's not always something that we can really do within the scope of our work, but it definitely is valuable work that needs to be done. So I find just having that conversation to really differentiate with them like, "This thing is real. However, this is what we can address and work together within our work together, and this is work that I encourage you to continue to do," and providing a resource for them to do that is really helpful in getting through that initial barrier to really dive into the work from that point on.
Deb Zahn: I love it. I wish I had sound effects because I would do cheering or angel singing. I'm not sure which one I would do, but I would do that because what you just talked about is so powerful and if unattended, will be the reason that people artificially deflate their price. Then, you have to work harder to make the money you want to make because you artificially deflated your price.
Ruth-Joy Connell: Yes, so much so. Honestly, Deb, at the heart of the work we do is to be able to create and see generational wealth, to position firms to really impact not just as from the business owner perspective because when you think of generational wealth and entrepreneurship, we're often thinking about the owner, right, the person who started the business.
Deb Zahn: Mm-hmm (affirmative).
Ruth-Joy Connell: But when your firm is positioned for generational wealth, that trickles well beyond you as the individual into your employees, into the community that you serve, into your clients, and it really allows the work that you do to expand beyond the scope or even the geographical location in which you might be. So at the heart of this is really allowing people to understand the role that profit plays in their business in their long-term goals and really understanding that this is foundational to you being able to allow your business to consistently grow over time in a way that's sustainable because you have to have something to pour back into your business so that your long-term vision can be accomplished.
Deb Zahn: Love it, love it, love it. So if you were working with a consultant who was either considering their price or reconsidering it because they hear this and they're like, "I wonder if I'm lowering my price where they should be." What are some of the first things you encourage them besides some of the mindset stuff that you talked about in the scripts that you encourage them to pay attention to first so their path to the right price starts off the way that makes sense?
Ruth-Joy Connell: Yes, for sure. We call it…within our framework. It's called our Pillars of Pricing, and this is one of the foundational things that we started doing with our clients. Just to give you a little bit of history as to how this came about is when I came into the consultancy space, funny enough, I didn't actually start off my business in consulting per se. It took a little while to get to this place. But when I did start off, I recognized that as I was working with coaches, as I was working with other consultants, this was an area that no one could really seem to answer for me. I was like, "How are we setting these prices?"
So I remember I had a coach, and she told me like, "How much time do you think it would take you to do this? Here's an hourly rate that I think works for you and where you're at. So double that. Calculate how much time it's going to take you. Apply that hourly rate, and then double it," which was...It's a good place to start if you don't have a pricing framework, and so starting from where you at, where you're at now. There's nothing wrong with that. However, I was a bit frustrated in that. I couldn't understand. That only worked for some things.
When I started to shift into working with B2B, I'm like, "This doesn't work at all because, one, it's not just me who is involved in the service delivery, and so how do I calculate that?" So, for me, that was how I developed these Pillars of Pricing Framework, and there's four key pieces of it that we take clients through. So before we pick up a calculator, we start with...or before I pick up the calculator, we start with these four pillars. So the first pillar is profile. Would you like me to go through this now?
Deb Zahn: Yeah, absolutely. Are you kidding? Num, num, num, num, num. This is the good stuff.
Ruth-Joy Connell: OK. So the first pillar is profile, and this really looks at getting a deep and holistic representation of who your target client is. So whether you are serving B2B, but even if you're serving B2C, it's really looking at creating a target client profile or target company profile, and this is having a very deep understanding of either the problem, the challenge, or the goal that your prospect is looking to solve.
So allow me to differentiate between the three. The problem being something that's causing harm to them or their business, a challenge being something that they're struggling to overcome, and a goal being something that they're looking to achieve. So the reason that we differentiate these three is because it changes the language with which you're going to be speaking to them, especially when you are speaking about the impact of your services. So having a little bit of clarity around, "Are they suffering right now? Are they trying to overcome something, or are they positioning themselves for long-term success?" that really helps you align your work and your solutions with their objectives. So that's why.
Deb Zahn: If I could just pause there because, again, you're saying all this really profound stuff. So I want to pause it a few places because this is the thing that I see so many new consultants skip is because they think, "I'm going to offer my services to anybody who will take them," and then no wonder when you go out, you're not getting clients because you don't have anything relevant to say to them because you don't know who they are as opposed to what you're saying is first stop is the who.
Ruth-Joy Connell: Yes, exactly.
Deb Zahn: Got it.
Ruth-Joy Connell: Really getting clear on that because it really helps you align at the end of the day. How this affects your pricing is that it helps you align your solution with the target, with your clients, and with the prospects that you're looking to work with. So having that alignment right from the get go brings that clarity of, "I know they're having this problem, and I know I have a solution that can ease that problem for them, or help them overcome that challenge, or help them reach that goal."
The one thing I'll say here as well. One of the biggest mistakes we see here, especially for consultants who are working B2B, is that they're often confusing their consumer and their client. So this often happens when you have a consulting company that's offering a service that is very heart-based and really mission-driven. All of us are doing that in some way. But sometimes when you're doing... especially emotional work, it's very easy to confuse your clients and your consumers. So what that means is, essentially, the person who is buying from you might be different than the person who is using the service that you are offering.
Deb Zahn: Yeah.
Ruth-Joy Connell: Right? For example, if you are doing work with leadership…leadership or executive leadership, executive training, for example, the people who are actually working with you and doing that coaching with you or participate in your program may not actually be the ones in the room purchasing from you when you're on that discovery call or when you're presenting that proposal. So sometimes what happens is that we conflate the language and we are speaking to the executives that we want to be taking our program, or the ones who we want to experience the benefit of learning how to communicate with their team and helping them hit their objectives.
Deb Zahn: That's right.
Ruth-Joy Connell: So sometimes we forget to present information and forget to present the facts that are really going to support the client as well, which are the company. So at the end of the day, how are the services and the solutions that you're offering going to impact the company's bottom line and not just be beneficial for their employees or the people internally who are going to be working with you?
Deb Zahn: Love it.
Ruth-Joy Connell: So the profile really helps with that because then we can distinguish who is the consumer and who is the client, and making sure that in your proposals, you're pricing, your marketing, your language, you have language that speaks to both and is supportive of both.
Deb Zahn: Yeah. I love that because the proof is in the pudding. You can't get the results if you don't know the difference necessarily between those two things.
Ruth-Joy Connell: Exactly.
Deb Zahn: So fantastic. So what's the next pillar? I'm on the edge of my seat a little bit here.
Ruth-Joy Connell: So pillar number two is your positioning. So oftentimes, when we hear people talk about positioning, we hear them talk about, "What's your vertical, and what's your horizontal?"
Deb Zahn: Right.
Ruth-Joy Connell: I strongly dislike that language. I think it's more confusing than it needs to be.
Deb Zahn: Yeah.
Ruth-Joy Connell: At the end of the day, what we've distilled this down to is really understanding how you can influence your prospect's perception of your company. So that means setting up some key areas in your business. So, one, yes, choosing an industry or a market that you are going to target, two, having a specialty within there so that you can be known for something specific, and then three, what we introduced is something we called prestige. So what's your level of prestige? So I think for the most part, everyone can understand choosing an industry or a market, whether you are in tech, whether you're in healthcare, whether you're in you're in online education, DEI, et cetera.
That's what a marketer industry would look like, and then having a specialty within there is specializing within that field. So not just saying, "I work with companies to improve their DEI," but getting very granular as to what that looks like for you and the approach that you take in order to help them meet that objective. That will tie into pillar number three, which we'll come to in just a minute, but then the third level that we introduce is prestige.
Deb Zahn: Yeah.
Ruth-Joy Connell: The reason that we introduce this is because I think it's important for you to differentiate on a spectrum where you stand even with your market and even with your specialty. The way I like to describe this is if you set yourself up as either a Walmart, a Target, or a Neiman Marcus. I think for the most part, all of these companies are equally successful. All of them are exceptionally successful in terms of revenue, in terms of client base, in terms of notoriety. I'm sure everyone who's listening to this right now can relate to those or can at least identify who those companies are. However, they have very unique positions within their market.
Walmart is low price, high volumes. They're all about driving more and more people into their stores or purchasing online. Their position that they take is rollbacks. Right? So Walmart is all about, "Here's how you can get the lowest price. This is why we price match. No one is going to beat us." That's the position that they take, and that's fine. So they attract a very specific kind of customer. They are not marketing to the millionaires, or the billionaires, or people who are living in affluent neighborhoods. You're going to see Walmart advertisements, for example, on a bus or on a bench post, or you're going to get the flyers to your door. You're going to see commercials because people who...Their target market is watching TV. Right? They might have a TV show on for their children while they're trying to do something in the background, et cetera.
Deb Zahn: Yep.
Ruth-Joy Connell: So Walmart's position that they've taken has really allowed them to align other aspects of their business in support of who they are targeting as well. So one thing I forgot to mention is that all of these pillars build on each other. So that's why we start with the who to get very clear on who we're targeting first because everything else aligns with that. Then, Target, for example, is in the middle. They're like, "Well, we're not too expensive, but we're also not too inexpensive. So it depends on what you're looking for. You can find it here."
Deb Zahn: Yeah. Yeah. Oh, if you go in for a toothbrush, you're walking out with a hundred dollars worth of ice.
Ruth-Joy Connell: Yes, and they know that. Exactly. Even the way their store is set up is a bit different, right?
Deb Zahn: Yeah.
Ruth-Joy Connell: Their stores tend to be a bit cleaner. It's a little easier to find someone to help you in a Target, and so it's very different. Who they're targeting is going to be different. Similarly, they'll have ads that run on TV. Where they position their advertisements is also slightly different than Walmart, and a Neiman Marcus, for example, when it comes to someone who's on the higher end of the prestige, what you'll see is you will...I have never seen a Neiman Marcus that is in the middle of a mall. I have always seen them strategically positioned where they can be viewed from the street. They are typically the stores that have glass windows from the outside. Their lighting is exceptional. Their staff are dressed in a very particular way. There's someone in every single department every single time. There's always someone available to help you, and when you're going into a Neiman Marcus, even if you only want a hat, you're going to spend a couple hundred dollars.
Deb Zahn: That's right. You'll get less than you got at Target, but you'll spend a couple hundred bucks.
Ruth-Joy Connell: Exactly. It seems like you're going in there with the expectation that, "I'm going to spend some money here." Right? So all of these things. So we added this level of prestige because it really helps, especially with the pricing aspect of it, knowing who you're targeting and what level of investment they are ready and willing to make. So that helps you align your solution and your price points with that target audience and with that profile that we just created as well. So I feel like those three, the Walmart, the Target, Neiman Marcus is just... Of course, it's an analogy, but just to give an example of what this looks like because this is something that is actually...This is a practice that companies actually do, right? So if you are positioning yourself as a Neiman Marcus, then you're not advertising, you're not targeting the Walmart customers, and that's fine. Right? It really helps you align more than just your marketing, but also your messaging and your service delivery with the profile that we created when you've added that level of prestige and decided which position you want to be in.
Deb Zahn: Yeah, and I think I love the term "prestige." I've never heard that, and I really like it. Price also connotates prestige.
Ruth-Joy Connell: Yeah.
Deb Zahn: So it communicates, and so I would generally encourage most consultants, "Please don't be Walmart. There's other things you can be." But I do know that people often think, "Oh, if I compete on price, if I compete like Walmart, then that means I'm going to get more business." But the reality is, and I'm sure you've seen this, is folks want the best that they can afford.
Ruth-Joy Connell: Yes.
Deb Zahn: So they will be willing to buy a little bit less at...I keep wanting to say needless markup because that's what they call Neiman Marcus in certain circles, but they'll want something there because they want to get the best that they can possibly afford. When you talk to people about their prestige and they're starting to think about then their price along that continuum, what are some of the things that you encourage them to think about so that they place themselves appropriately?
Ruth-Joy Connell: Yes. So that actually leads perfectly to pillar three, and that's proposition.
Deb Zahn: Ta-dah.
Ruth-Joy Connell: No, exactly.
Deb Zahn: We didn't even plan that.
Ruth-Joy Connell: So when talk about proposition, that's short for unique value proposition. We just like to keep it to all the Ps to make...
Deb Zahn: Love it.
Ruth-Joy Connell: So essentially, here, we are looking at what distinguishes you from other service providers within your industry, within your market. This is exceptionally important to your point, Deb because it really helps to support and make sure that we're in alignment with the profile and with the positioning when you are clear on what makes you different. So typically, what we found is that your proposition is going to fall into one of three categories, either the process that you use, so the methodology or framework with which you deliver your services, the results that you deliver, so what you help your clients achieve and the outcome that they can expect, or the experience that your clients have. So this is really understanding, are you creating something that is exceptional for them and really focusing on the kind of client experience that you want to have?
Deb Zahn: Yeah.
Ruth-Joy Connell: Now, I do want to say most consultants are great in all three areas, and so typically, when we work with clients, they're like, "Well, we do all these three things great. How do we really understand?" So what I like to say is, "Most often, yes, you are doing all three of those things well. However, more often than not, you are going to be exceptional in one of those areas, great in another, and good in one." So that's how we help them rank it is, "Where are you going to put the stake in the ground for where you are exceptional?" So there are no exceptions into how you are either delivering your process, your results, or your experience. So that's just to help people who might be thinking like, "Oh, well, we do well in all of them." You do and continue to. However, when you want to put a stake in the ground to say, "This is what we are different at. This is what differentiates us," that's something that you can think about. Where are you exceptional, not just...
Deb Zahn: That's right, and you may not know because when I've heard folks describe me in my market or I heard secondhand that they described me, they said things that often, I'm like, "Yeah, that's right," and a few things surprised me. It was almost always the experience, the experience of working with me. Now, I get them results. I have a good process, but that's what kept coming up over and over again. Had I not heard from my market, I might have picked something else that isn't quite it because I wanted to be that.
Ruth-Joy Connell: Yes, and that feedback is so so so so important, and really getting that feedback to your point, Deb, from your market really helps you understand what your clients are experiencing and not just what you're working to deliver because similarly, we always put a stake in the ground for our experience. So that's what we thought we were putting our stake in the ground for. But then again, hearing back from our clients, so like it was the process. It was so well-laid out, and so it was like, "OK. That's good for us to know is that's where we're exceptional at," and that's what helps us shift our focus to make sure that this is what we are communicating when we are doing our marketing and our messaging, et cetera.
So to answer your question, Deb, of how we work with clients to really understand where on that level of prestige they fall into is we look at their proposition. Right? So how are you delivering the service? What's the experience like from beginning of prospecting all the way through to the end and getting through those deliverables, and where is it that you are exceptional at because that's really going to help align your level of prestige? Then, also who are the kind of clients that you're already working with? Right? So if you're already attracting clients that are at that Neiman Marcus level, and you are enjoying the work you do, and they're happy with the results that they're getting, then let's continue with that. Let's go with what's working. We don't have to reinvent the wheel, and so that's really where...That third proposition is what helps us then establish where they fall on that level of prestige.
Deb Zahn: Love it, and so if someone...and these are great pillars. If someone goes through the pillars, and then they got, "All right. So this is the price I'm going to work with," how do they then know that it's the right price? What are the types of feedback they're looking for or responses they're looking for to tell them whether or not they hit it?
Ruth-Joy Connell: Yeah. So, typically, what I say here is that your price is going to be your price, and so the feedback from your market is...It's good to understand if there are objections, like if you're getting objections from your potential clients because then what that's communicating to you is not necessarily you have a pricing problem. It's that you have a communication problem. It's that you haven't communicated the value of what you're offering in a way that instills confidence in them to be able to move forward.
So before we go and tweak any numbers, you're going to say, "Well, let's talk about how you're presenting this," because you're going to be...If you're going to position yourself as a Neiman Marcus and if you're going to charge Neiman Marcus prices, then everything else has to align with that as well. Right? We can't just be, "Well, we charge X amount of dollars, but we deliver a subpar or an average experience or average result, or sometimes we don't even hit our results." So it's making sure that everything is aligned in support of what that price point is.
So the feedback that I would tell them to look for are objections around...If there are objections around your pricing, it's more often than not a communication and a messaging problem than it is about the actual numbers because clients have objections around...When they're limited in their budgets and what they can do, but they want your services and they want to work with you, they'll get creative. Right?
Deb Zahn: Oh, yeah.
Ruth-Joy Connell: Yeah. Maybe that means spreading out the project over a few quarters. Maybe that means you do it in stages. But when they want to work with you, you guys can often work out an approach that is going to allow you to work together.
Deb Zahn: Yeah. It's like magic, isn't it?
Ruth-Joy Connell: Right.
Deb Zahn: It's not that budget limitations are real. I mean, I work with a lot of nonprofits, and they're definitely real, but they're not necessarily as real as how it's first described to you.
Ruth-Joy Connell: Yes.
Deb Zahn: I've experienced that over and over again. So I'll reduce my scope so that it fits within their budget, and then magically, six months later, they found a gold mine somewhere and...
Ruth-Joy Connell: Exactly.
Deb Zahn: Because now they get the value, now they've experienced the value, and figured out a way usually to either make the money work, or the timeframe work, or anything along those lines.
Ruth-Joy Connell: Exactly.
Deb Zahn: I love that. I've certainly experienced that.
Ruth-Joy Connell: Yeah. Certainly, and I love what you said, Deb. You always reduce the scope and not the price. The price is going to be the price.
Deb Zahn: Yeah.
Ruth-Joy Connell: When you do run into a budgetary limitation, then that is when you play around with the scope. Sometimes you play around with the pricing. Sometimes you play around with the payment plans and how that trickles in. But again, that's where the creative problem solving and the collaborative problem solving comes into place when they want to work with you. So if it's that they're not yet confident in your ability to deliver, that is, most often than not, probably 98% of the time, a communication and messaging issue more than it is a pricing challenge.
Deb Zahn: That's right, and if you can get through...because objections are just objections. Objections are often just questions, and we experience them internally as suggestions.
Ruth-Joy Connell: Yes.
Deb Zahn: But if you can get through those and you help them get to a good place, then they've also just experienced a valuable process with you.
Ruth-Joy Connell: Yeah.
Deb Zahn: Now they got a taste of what it's going to be like when you're working with them.
Ruth-Joy Connell: Yeah, they'll work with you. Yeah.
Deb Zahn: I love that. So when folks are often...They set their price, and then they're going to figure out how to do sales because I know you're a systems person, which makes my heart sing.
Ruth-Joy Connell: Mm-hmm (affirmative).
Deb Zahn: So how can you take folks from those random acts of sales into actually systematizing? I know we don't have time to go into all of them, but even just some highlights of how then does that price translate into a system that makes sales more predictable?
Ruth-Joy Connell: Yes. So I'm going to circle back to your question, Deb. But I do want to just get through that last pillar. We have one more pillar left.
Deb Zahn: Oh, I missed a pillar. I never miss a pillar.
Ruth-Joy Connell: Oh, no. I just want to before we give everyone the complete look at this together.
Deb Zahn: Oh, absolutely.
Ruth-Joy Connell: So the last pillar is just profit margins, and this is where we're actually diving into the financially informed data. So this is where we're looking at what is it costing you to deliver this service and really taking this into account beyond just the hours worked by the consultant, but really understanding that we have to look more comprehensively at running your business, not just providing this solution for this particular client in isolation and making sure that your pricing is encapsulating running and supporting your business in the long-term.
So this is where we typically look at profit and loss statements. This is where we look at what's coming up in the future. What hires do you need? Is your capacity currently limited, and how can we make sure that there's money to reinvest back into the business to increase your capacity to bring in revenue, which, of course, also once you're optimized, also brings in profit as well?
So that last pillar is really taking the financially informed data, and then building that into your pricing as well. So there is a place to actually punch numbers, but it's not the first place we start. We still have to look at those first three pillars, and then making sure that those three things are aligned first and that we bring in the numbers, and actually begin to calculate, what does this look like for pricing, and how do you calculate pricing for various opportunities moving ahead?
Deb Zahn: I love it. So that gets to the, "You're in the business of consulting and not in the business of doing projects for money."
Ruth-Joy Connell: Exactly.
Deb Zahn: That distinction is really, really important because a lot of folks at the beginning think they're the latter. So that's wonderful, but that starts to get you into my question, which is the systems part of it, so that you've got things that are actually backing you up or freeing you up to do those revenue-generating activities that only you can do.
Ruth-Joy Connell: Mm-hmm (affirmative).
Yes. So the reason that we start with pricing is often because we don't want to pump in more revenue into an inefficient system. So if we can make sure that every sale, every client, every opportunity is optimized to bring profit into your business and make sure that it's not just taking care of your business now, but positioned to take care of your business and allow it to grow in the future, then it gives us so much more to work with and with that profit, allows you to reinvest back into your business to build the systems that will then allow you and position you to scale.
So to answer your question, how do you then take the pricing and really allow it to inform your sales process that you can have those sales coming in more consistently and more systematically? It's really about, again, aligning your marketing, your sales, and your service by putting all of those systems in place so that it's decentralized around the business owner, and you're equipping your team and even your software where that comes into place, but equipping your tools and your team to be able to support and deliver these services on an ongoing basis while you the owner or you as the leader, if you're in an organization, are doing the things that you are supposed to do and only you.
So having the systems in place, we then look into...Another way that we work with our clients is through a program that's called Systems at Scale, and that's where we're putting the systems in place to align your marketing, to align your sales, to align your service with those pillars of pricing that we had already established so that it can be done in a consistent, predictable manner. Especially when you're working with B2B, those contracts can be high in numbers, and it's fantastic. But oftentimes, what we find is consulting firms are limited in their capacity. Right? So they only take so much. It's great to get contracts, but if we were to get 10 or 15 of these contracts at a time, they're not able to really deliver on that service, and so it's, "How do we put the processes into place so that you are building your capacity because you have the profit to do so so that you increase your revenue over time and of course, scale your business?"
Deb Zahn: That's right, and increase your value to your clients overtime, which is worth its weight in gold because it's going to feed the process, it's going to feed the experience, and it's going to feed the results. Oh my goodness. I just love this. We could talk about this for so long because we're both price nerds.
Ruth-Joy Connell: Yeah. I love this. I'm like, "What else do you got? Give me the question."
Deb Zahn: Oh, this is so good. Well, I would love to have you back on because there is so much we could dig into with this.
Ruth-Joy Connell: Certainly.
Deb Zahn: But let me ask you this. Where can folks find you? So if they want help with this, where are you?
Ruth-Joy Connell: Yes. The easiest place to find me is on LinkedIn, and that's just at Ruth-Joy Connell. It's my first and last name, very simple, but as well our website. So that's rjcconsulting.com, and that's typically going to navigate you to where you can get in contact with us. So those are the two easiest places to find me and to get in contact with me. If you're interested in working together, the website is a great place to start, and then we can connect from there.
Deb Zahn: Wonderful, and we will put all of that into the show notes. So I'm going to ask you my last question. I know you're prepared for this, but how do you bring balance to your life, however that's meaningful to you?
Ruth-Joy Connell: I loved preparing for this question because it really did take me some time. I took the time to reflect on it, and what balance looks like for me has evolved so much over time to where I am today, and so it was nice just to go on that journey as I was reflecting on this question. So today, how I bring balance...and I refer to it as equilibrium because I realized that there's going to be times when certain areas of my life require more of my time and energy than other areas of my life. So when I think about balance, I had to shift that a bit to look at equilibrium as having the resources where they're needed for that time period.
So that was really a shift for me. That really helped me have peace with the different seasons of life that I was going through so that I could feel comfortable and confident showing up where I needed to be for that particular season. Then, when my energy was no longer needed in that same capacity, I could then shift it to other areas of my life. So that's how my balance has transformed over time to really accommodate the life that I want to live, and the impact that I want to have, and the people that I love in my life, and really allow me to show up at my best. It's accepting that I'm going through different seasons of my life, and while I may not always have balance in the traditional sense, I can always have equilibrium.
Deb Zahn: I love it, and then you can go to travel when you travel.
Ruth-Joy Connell: Exactly. So when I'm traveling, I can feel at peace knowing that this is where I'm at for now, nothing is falling off the...I'm not dropping any balls, so to speak, and it really just allows me to show up at my best in any and everything that I'm doing.
Deb Zahn: Ugh, I love that. Well, Ruth-Joy, I can't tell you how fabulous this has been to have you on to talk about one of my favorite topics and to walk through the pillars. I really appreciate your generosity in doing that because there's so much there for folks. So thank you so much for being on the show.
Ruth-Joy Connell: Thank you so much for having me, Deb.
Deb Zahn: 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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