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Getting invited to do an expert network consulting call through companies like GLG, Alphasights or Guidepoint can be exciting! Someone values your expertise enough to pay a hefty fee for an hour of your time. But deciding what to charge can be a stressful and confusing question. Do some quick online research and you’ll quickly find (uninformed) opinions on hourly rates ranging from $100/hour to well over $1,000/hour! Plus
So what should you charge? Ask too little and it’s quite possible to leave hundreds of dollars on the table, while if you ask too much you could not only lose out on the project, but burn your relationship with an entire expert network.
It’s not a simple question to answer, but if you learn how to thread the needle, you can maximize your earnings by landing the most opportunities at your highest average rate.
In order to understand how to price your consulting services, you need to first understand how expert networks make money and how clients in search for your expertise choose to spend their money. Expert networks are a highly profitable business, and you are their cost of goods sold. While they add valuable services like recruiting, administration, compliance, and transcription, *you* are generally the most expensive part of every call or project.
As such, it is always in an expert network’s interest to have their client schedule the most profitable consultants. Yes, that means even if you are a great fit for the project, your rate may exclude you from being shown to the client.
In addition, as your rate goes higher, clients are often charged a higher markup to speak with you. This is great for the expert network, as they are able to earn higher gross profits for consultants with higher rates. However, every client has a budget, and as the total price to speak with experts climbs, clients may choose to speak to fewer and/or lower priced consultant to manage costs.
In the expert network industry, this is known as Variable Pricing, and it’s how the majority of clients are charged. In variable pricing, your consulting hourly rate will directly determine the amount that clients are charged to speak with you on a sliding scale. Expert networks each have their own pricing algorithm to translate your rate into the final charge that the client sees (clients will never know your actual rate.)
While less prevalent, some clients are billed under Category Pricing, where your consulting rate falls within a range that translates to a pre-determined set cost to engage you.
In Category Pricing, your consulting hourly rate will fall within a range pre-determined by the client, and the client has already agreed upon the same charge per category. In this scenario, it is crucial you price your rate within the lower category ($199 instead of $200) to increase your profile competitiveness. More on this later.
Keeping this in mind, here are some guidelines to help you set your own consulting hourly rate.
Set your baseline expert network hourly rate
Anyone interested in consulting with an expert network is in it for something – whether financial remuneration or just the sheer enjoyment of having someone other than your significant other listen to your perspectives on a seemingly boring topic. Either way, you need to know the lowest hourly rate that makes doing these calls worthwhile to you. For some C-level executives with multiple speaking engagements at the World Bank and are squeezed for time, it’s $1,500/hour. But if you have a lot of free time on your hands and work an Average Joe job, consider your baseline around $100/hour or lower. Each time a consulting opportunity comes by, if it meets at least your baseline, take it – if not, pass on it.
Additionally, if you’re just getting started with expert network consulting or doing your first project with a new network, think about your first few projects as an investment in business development. Setting your rate on the lower end can help you land your initial projects, and you can ask to raise it to your target rate once you’ve established a bit of a reputation.
Higher seniority = higher rates
Of course, the more senior you are in your relevant position, the more valuable your experiences are. This is because with greater seniority comes decision making authority and deeper insights into topics. Generally, you can increase your consulting hourly rate as you transition into bigger roles, but here is a loose guideline for your consideration.
Get top dollar for being THE expert
The best path to the highest possible rate is relevancy. If the consulting topic is on a company or topic where you have deep, current and hard-to-find expertise, this trumps everything. If we can present you to clients as a top expert with specialized knowledge, they will gladly pay rates much higher than your current seniority would indicate.
Take a look at a recent search that I conducted for experts in OTT streaming services, and these sample potential consultant profiles that would be presented to a client:
Comparing the profiles of John and Jane, both senior executives at top OTT streaming services (and equivalent in seniority), it is clear that Jane’s high hourly rate may not only be well worth it, it could even be a bargain considering the enormously valuable insights she may provide. Instead of taking a gamble on John, who may have limited or outdated experience with OTT streaming, a client will typically fork out the extra money to engage Jane (as long as their budget allows).
Make sure you invest time in providing detailed highlights in your areas of expertise in your LinkedIn profile, expert network profiles, and screen calls or questionnaires. It will not only help you land more projects, but also achieve a higher rate for them too.
Consider the competition
Ever feel like you were the perfect fit for a project, but then found out that you haven’t been selected to participate in a call? You may have lost out to someone who can provide similar perspective…but at a lower rate.
One of the most important considerations you need to have is how other consultants on the same project are pricing themselves. They are the last obstacle you need to get past to be selected for a consulting engagement. Clients will always be presented with an extensive list of available consultants, including their backgrounds and prices, so you need to make sure that your hourly rate is competitive.
This may seem like an impossible task in the opaque world of expert networks, but if you ask the expert network associate working to staff a project to provide guidance on your rate, they will often happily do so. They know the average consulting rate of the project, their client’s budget, and who you are competing with for the consultation.
To be honest, most expert network associates try to offer guidance before the advice is even solicited, since optimizing your rate (and their profitability) is a key part of their role. Most of the time they are already trying to guide your rate (usually lower) to match the client’s budget. So all you have to do is make their lives easier and write or say something like, “I would really like to secure this consulting engagement, would you happen to know what rate would make me competitive for this project?” This is also a great way to learn if it’s variable pricing or category pricing, and expert networks will help you price your services accordingly.
Which brings me into some insider tips!
The most successful consultants are willing to change their rate to increase their chances of client selection. If your ultimate goal is to consult for the project, you absolutely do not want to lose out to other consultants. I would recommend coming up with a consulting rate range, for example $150 – $400/hour, and be willing to take projects that fall within that range. In addition, if you see a project through multiple expert networks, consider lowering your price the second time that you respond. This is because some expert networks compete based on price, and it’s not uncommon to see the same project shopped around via more than one network, especially when the client is carefully managing their budget. For example, you may have been passed over for a project with GLG at a $500 hourly rate, but a few days later you could land the same project through Alphasights by offering to do it at a $400 hourly rate.
While it is not common practice, some consultants choose to impose additional restrictions to engage their consulting services, such as one-hour minimums and cancellation policies. However, doing so puts you at a disadvantage to all of the consultants with no personal policies. The majority of expert network clients are private equity firms and top consulting firms, and their schedules are often constantly changing. Take note that clients are informed of a consultant’s restrictions beforehand in order to ensure they are abided by. However, as it is difficult for clients to commit to a time as well as guarantee a 60-minute consultation (some prefer a quick 30-minute consultations), you often hurt your chances of consulting with unnecessary restrictions.
One of the top pet peeves of expert network associates is consultants who try to renegotiate their rate after winning a project. Consultants agree to a particular rate when they respond to a project invitation, but then after being assigned to a consulting call, they seek a (sometimes much) higher rate or back out from the project stating that the rate was too low. When probed, some consultants dive into long stories about how much they usually make per hour, or how much they make with other expert networks or even how much they previously made on a similar call.
In all honesty, these are some of the most frustrating conversations that expert network associates have with consultants, and they are more likely to get you uninvited from the project and tagged as someone who is difficult to work with than to land you a few hundred extra dollars.
The only thing expert networks care about is what your final consulting hourly rate is – and one that will guarantee you will turn up during the scheduled time. I recommend using the screening conversation with expert networks to bring up concerns about your rate and once that conversation is over, your rate is internally set up and sent to the client. Once the client has scheduled the consultation at the rate sent over to them, any updated changes in rate will have to be accounted for, which is a long and tedious process. So pick a rate for a specific project and then keep your word!
Setting your consulting hourly rate may seem confusing, as you neither want to underprice nor overprice yourself, but following the guidelines above will be an excellent start. After doing your homework and finally deciding on your rate, you should be willing to experiment with your rate! After some time at your chosen rate, try increasing or decreasing it to see if the difference changes the number of successful consultations you have. After all, you’re trying to secure as many consultations as possible in the long run.