Paying for work or process?

As a consultant, we work with businesses on different topics and we charge them based on how much work the project involves. Yet the only way to measure the amount of work was to estimate the time it would take us to complete the work. Of course, the price per unit time of someone more experienced (or higher up in position) is higher. But this inevitably seems as though we are charging people for the process rather than work.

Another way to really charge for the work is to find out how much the problem is costing the client, and charge an amount just below the cost of the problem. The client gains the difference. If it’s not a problem but more benefits flow to the client as a result of the work, it can also be valued based on the incremental value to the client. That’s just harder because the clients are unlikely to really reveal that.

As a result when we overvalue ourselves, the transaction never happens and it only seem to happen when we undervalue ourselves vis-a-vis the client’s own value of the work that we are doing. Along the way though, the client can sometimes try to give us more work. After all, the lump sum price have been decided on. Better to ask more questions and wring more value out of these guys. It’s a delicate balance to strike. But all I can say is that consulting is such a human business we can never escape having to manage these interactions and relationships.

They are all necessarily more valuable than the transactions; but it is after all the job, the work, and the payments that enable these relationship. So do you value the work more or the process to arrive at it?