Why I Was Paid $33,500 For One Day's Work
One small tweak in my offering resulted in me earning more for a single project than I had previously earned.
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An international organisation once wanted me to host a workshop for them. I quoted them a fee of around $11k, but they said it would exceed their budget.
This was at a time when work was a little harder to come by, and I really wanted the project, so I decided to reduce my rate.
Now, you can’t just lower your rate without giving a reason. That risks looking like you’re inflating your fee to begin with. So, I asked how many people would be attending. Perhaps I could charge per attendee and slim down the scope of work on my side to fit their budget.
They told me it would be for 11 people. So I quoted a rate of $650 per person with (a minimum requirement of 10 people attending). They said ‘yes’. In short, I’d be earning $7150 (plus expenses). This certainly wasn’t what I’d typically charge. But I figured there was always a chance more people might want to attend and I had worked with the client before and was likely to work with them again. I didn’t especially want them to bring in another consultant for the projects I had been doing for them.
Once this was finalised, I also wrote them a short piece they could use to promote the workshop to staff internally. I’ve found organisations generally do a terrible job of promoting workshops, so I knew if I took this on myself, they were likely to use the copy I had written. I made sure to focus on the skills people would learn and how those skills would be relevant not just in the community but across other sectors, too.
Over the next few weeks, something odd happened.
The client kept asking to add more people to the workshop. Other departments were invited to the workshop and wanted their teams to join. Then it was pinned at the top of the organisation’s Sharepoint site and registrations increased considerably. Staff had the option of registering themselves and many did.
Eventually, the workshop grew to 51 people and was hosted in the organisation’s main amphitheatre.
My eventual fee for this one-day workshop was $33,150.
Now, obviously, this isn’t solely for one day’s work. There’s a bunch of prep involved, relationship building, and skill development to be in a position to deliver the workshop. But it’s still a good outcome as a consultant. But it opens a very strange question.
Why did the organisation reject my initial fee only to pay almost triple what I asked?
Why Did The Organisation Pay $22,150 Than I Originally Quoted?
The answer reveals useful information about how organisations operate
Honestly, I decided it was best not to ask this question until after the workshop was complete.
The workshop itself went well, the feedback was positive, and afterwards, my contact invited me out to dinner. Towards the end of the dinner, I had to ask the question: why was he happy to pay triple the fee he originally rejected?
His answer was brief but revealing. He simply replied:
I’m not. It’s not coming out of my budget anymore.
If not his budget, then whose budget was it coming out of?
He gave a wry smile and said:
It comes out of HR’s budget. When you charged a flat rate, that came out of my budget. But when you charge per person, it comes from the individual’s training budget. Most people here have a training budget they never use. So when we promoted this as a way to use that budget, it was free training for them.
He paused for a moment, gave a wry smile and said:
The training per person is actually $1k. You could have charged $1k and made a lot more…It was a bargain compared to what others charge.
It’s not often that both sides believe the other is significantly overpaid or underpaid.
What Should You Do Differently?
Don’t Give A Rate Without Asking Some Questions
The real lesson here - if there is one - is you shouldn’t quote a rate without asking plenty of questions. Some questions I’d include when quoting for a workshop:
How many people is the workshop for?
How many people could this workshop be for?
Do people have a training budget they could use for this?
What is the training budget of staff in the organisation?
How is the training budget typically used? (and is the training budget usually spent?)
Would you be open to a rate per attendee and co-promoting the event?
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Thanks for reading
This is really interesting, Richard, not to mention useful. I struggle with pricing all the time—balancing my need for work with the actual value of what I'm offering. Too often, I underprice what I'm selling -- especially when it comes to webinars and live events -- in the name of getting the work and charging more the next time. I've found that flat fees are always a loss since, like you, I'm sure, I always give the client more than they contracted for. It's a delicate balance, to be sure!
"Most people here have a training budget they never use" - yes, that always surprised me but I always made sure that my staff never left any training money on the table!