Don’t Forget to Charge!
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One of the biggest struggles I see small businesses in the Search Marketing world making is knowing when to charge for the advice they give. As a consultant, you aren’t selling a product. You are selling your knowledge.
It seems like every other day we get a phone call from someone who has some sort of problem with their analytics. Their Adwords aren’t talking to them or they aren’t receiving data at all. This is where the dilemma comes in. They don’t know what is wrong, but because we’ve been in the industry so long, and have seen this problem before, we know exactly what is wrong. To us it is an easy problem. But at what point do you charge them for the solution? Perhaps it is only easy to us because we are so familiar with the problem. Shouldn’t all the time you’ve spent troubleshooting this problem in the past count for something? I think my point can be better illustrated from a story my friend Jason Green told me:
There was a man who couldn’t get his car to start. He knew a lot about cars, but he still couldn’t figure out what was going on. He found a mechanic in the yellow pages and called him up to take a look at his car. He was an old man, and had been fixing cars since he was a boy. He carried a large bag of tools with him, and he went to work as soon as he arrived. He carefully inspected the engine, top to bottom. The owner of the car stood there patiently as the old man looked things over. The old man then reached in his tool bag and pulled out a small hammer. He gently tapped something. Instantly, the engine lurched into life. The engine was fixed!
A week later the owner received a bill from the old man for $1,000.
“What?!” the owner exclaimed. “He hardly did anything!” So he wrote the old man a note saying, “Please send me an itemized bill.”
The man sent a bill that read,
Tapping with a hammer……….….$2
Knowing where to tap………………$998
Was the old man justified for charging him that amount of money? I think he was. Without his knowledge of engines (which he has spent his life learning), the owner of the car would never of gotten it to run again. A customer should expect to pay a fair price for your knowledge. The key problem with the above story was that the old man didn’t make his price known beforehand.
The point of the story is not to cheat yourself out of the money that is owed to you. I have no problem with giving free advice to customers, but I think we need to be very careful which advice we decide not to charge for.
January 29th, 2008 at 12:58 pm
The link from Sphinn is broken, fyi. I’d resubmit this personally and get the credit, but you might like to do that yourself and get the hot submission on your account.
January 29th, 2008 at 1:06 pm
Thanks, Gab. I took a look and I’m not able to edit the link, so I’ll just leave it as is. I posted the real link in the comments.
January 29th, 2008 at 4:58 pm
Great story! Yes, knowledge is the most valuable thing and it should be paid for accordingly.
January 30th, 2008 at 11:29 am
I am always giving away too much free advice. Sometimes it comes back to me with happy, loyal customers, but sometimes it doesn’t. How do I judge where to draw the line?
January 30th, 2008 at 11:37 am
@dauclair I think the best thing you can do is carefully evaluate the problem. You know which problems took you hours to figure out before, and which ones they could find in the setup guide for GA (for example). Maybe you can buy yourself some time by saying, “Let me investigate the problem, and I’ll give you a call back.”
January 30th, 2008 at 12:38 pm
Funny - I was in a meeting with a client recently who told a story almost exactly like this, only it was focused on a boiler that wasn’t running properly for a major industrial plant in India. None of the on-site engineers could get it to work, so they called in well-known expert from overseas. After looking around he gestured to a worker, “get a sledge hammer and bang on the boiler right here, will you?” Sure enough, fired right up. Funny, the client told the story as if he was there…I guess stories work better that way. Whatever makes the point stick.
I definitely think there is some truth to this as regards SEM. It’s similar to the reason you don’t specify deliverable hours for a monthly contract - or you shouldn’t, anyway. You don’t pay a lawyer a retainer because he’s going to work X number of hours for you - but he’s ready, at a moments notice, and when the situation calls for it, to represent you. There are obvious differences between legal representation and online marketing, but in terms of what you’re paying for (a highly-specialized and knowledgeable expert) there are similarities.
Very interesting and thought-provoking post.
January 30th, 2008 at 12:41 pm
Hear! Hear!
I find myself telling prospects too much far too often!
January 30th, 2008 at 12:52 pm
@BigTequila Great story. I believe there is also one about Van Gogh painting someone a picture in 10 seconds and charging them $10K for it. They yell at him and say it only took him 10 seconds, to which he replies, “No, it’s taken me my whole life.”
February 27th, 2008 at 10:46 am
It is a very fine line. I agree with giving certain advice that creates an opportunity for that person to award you some business at some later stage. This way has worked for me in the past.