Unfair market value

I don’t like pricing projects. Many factors torment me—imposter syndrome, the fact that I don’t have the imaginary ‘shield’ of a large brand behind me, and most vividly, we usually don’t know (both parties) what we’re getting into.

In that context, many advisory firms default to time and materials pricing. Not so fast.

Procuring Services: A Metaphor Using Food

In this newsletter, we’ll explore how you can secure better deals from providers, focusing on the desired outcomes. We’ll use a common metaphor—food and its various procurement methods—to illustrate different engagement models and the corresponding pricing expectations. Here are the four critical scenarios:

Catering or Private Chef Project

Scenario: You need urgent, on-site support (e.g., investigative, crisis management, training, or keynote speaking).

Pricing Expectation: The supplier’s charges should be at the top of their usual range. This is because they should be at the top of their game (to fulfil such tasks). Additionally, the provider dedicates their entire time to your project, often at the expense of other work, including non-chargeable functions like administration, management, and marketing.

Questions to Consider:
👉 What is the project’s scope, and how urgent is it?

👉 What are the specific deliverables (focus on outcome, not input)?

👉 Do they have demonstrable experience (referees, not brochures)?

👉 How will success be measured?

👉 What are the contingencies for unexpected issues?

Restaurant Project

Scenario: Normal advisory work (a menu), including framework agreements where you select options based on the complexity of the work required (e.g., low, medium, or high risk).

Pricing Expectation: The provider should charge mid-range fees. There are economies of scale, especially in framework agreements, which lower the costs of sale and improve delivery (e.g., templates).

Questions to Consider:
👉 Do the service options align with your needs?

👉 Can the service be customised (e.g., “chillies on the side”)?

👉 What outcome do you want (e.g., filling up kids vs fine dining)?

👉 How are costs determined, and what factors influence pricing?

Cookery Classes

Scenario: You’re doing the work with guidance, often around implementation, usually with pre-defined ingredients. This might be on a mentoring or access retainer basis.

Pricing Expectation: Although fewer deliverables exist, be cautious about expecting this to be cheap. You’re paying for expertise, outcomes, and simplification of complex tasks. If you were taking a loved one to see a medical specialist, you’d probably not go on price alone…

Questions to Consider:
👉 What is the scope of the mentoring or guidance provided?

👉 How accessible is the advisor, and what are the terms of availability?

👉 What specific skills or expertise will you gain (knowledge transfer)?

👉 Are there any hidden costs (e.g., I’ve had people we pay on retainer for marketing support request that I watch X or Y pre-recorded video on a given topic – that is a time-suck and cost to me, and more like👇)?

Buying Ready-made Sauces or Meals

Scenario: Purchasing books, subscription resources, assessment tools, and pre-recorded guidance.

Pricing Expectation: This should be exponentially cheaper. For example, access to a piece of content in a library of resources (we have around ~200 resources, productised) might cost less than an hour of my time for expert witness work.

Questions to Consider:

👉 What is the quality and relevance of the resources provided?

👉 Are there any reviews or testimonials from previous users?

👉 How comprehensive are the materials?

👉 How does customisation work?

👉 Is there an option for help implementing and adapting?

Getting the right fit for you

By understanding these different models and asking the right questions, you can better negotiate deals that fit your budget and meet your specific needs and expectations.

Bringing it all back to project/retainer fees versus time and materials – I have a trusted advisor on our brand positioning, marketing, and pricing. He explained the argument against hourly pricing (in most contexts when acquiring expertise and/or advice) as follows:

“Selling by counting hours punishes efficiency and is a conflict of interest. The longer the work takes, the better for you. The same goes for charging based on output, where the more items you produce, the more you get paid. That incentivises overproduction, as the output counts even if it’s not helpful to the client. No one is happy to pay for more therapy sessions, dentist appointments, or hours spent listening to a speech than they have to. When hiring experts, it’s not the amount of work that counts; it’s the results.”

If you’re working on the advisory side, look him up here. He helps you better provide value (i.e., the deliverable the client needs) rather than unthinkingly following an RFP and logging time.

If you’re a service buyer, which model causes you the most pain, and why? I am happy to help (no obligation call booking here), as I am now in the weird position of being the chief negotiator on buying decisions and trying to sell our services.