Quantifiable and intangible value

If you're a consultant, you–as Gerald Weinberg put it–are influencing people at their request. And if you are wanting to charge a premium price for that influence, you are certainly thinking about how you can create more value for your clients. Creating value for your clients is one of the keys to charging more for your work.

Creating more value actually has a stunning number of positive effects on your business that are not all related to your fees:

1. Clients are willing to pay more for the results of your work.
2. You get to work with clients that are more pleasant to deal with.
3. Your social status increases, and both prospects and clients treat you with more respect and deference.
4. Your perceived expertise increases (if you don't do anything to damage others' perception of your expertise).
5. You often get to work on more interesting problems (because they call in the "big guns" for those).
6. You get to be more selective about which clients and what work you take on.

It's Up To You

It's up to you to increase the value of what you do and to discover new ways to create value for your clients. Fortunately, there are lots of resources out there to help. For starters, you've got:

• Alan Weiss' writings and training on value
• Brennan Dunn's book on pricing

To better understand value, let's take a step back and think about it from a philosophical perspective.

More Than One Kind

If you look up “value” on Wikipedia, for example, you'll quickly see that there are all kinds of theories of value. That's good to know, but for our purposes here, we can just focus on the two different kinds of value:

• Quantifiable Value: the kind of hard numbers that show up in a checkbook, a company P&L statement, and so forth.
• Intangible Value: the kind of worth that you can't put a number or price tag on very easily.

We could talk about perceived value as well, but perceived value really applies equally to both quantifiable and intangible value. Perceived value has to do with your client's perception of either the quantifiable or intangible benefitsyou bring to them. Their perception of your value is more about how you educate them and market yourself than it is about whether they can easily quantify the value you create or not.

Quantifiable Value

Quantifiable value is easy to… well… quantify. It's things like:

• 300 new customers per month x $2500 lifetime value (LTV) of those customers = $750,000 in added customer LTV
• 50 hours per month saved x 3 employees x $120/hour = $18,000 saved per month

Quantifiable value refers the hard facts. You either made money or lost money. You completed the project on time or you didn’t. It's pretty obvious stuff once you understand the concept, and everybody is talking about it in conversion rate optimization (CRO) and technical marketing circles.

Let's talk about something less well understood…

Intangible Value

Intangible value is the elephant in the room during every discussion of value. This is where everybody tends to throw up their hands and say, "I don't know. How could we even measure that?"

But yet, intangible value is all around us, and it is very influential in our decision making. Intangible value is the defining difference in these situations and many others:

• Buying the "better built" car for a $20K premium
• Buying a Rolex watch
• Buying a Dodge truck instead of a Ford or Chevy
• Buying clothes at a boutique instead of at Target

The same principle applies to hiring consultants or freelancers. You'll hear the following things said of consultants with a higher intangible value:

• "They're the solid choice for this problem."
• "We have to have them."
• "They're expensive but…"

 

Delivering More Intangible Value: 33 Ways to Prove You’re Playing in the Big Leagues

Delivering more intangible value starts with understanding what creates that intangible value. While this is partly dependent on your line of business, there are certain things that increase intangible value across the board.

Since these leverage points can be subtle and tricky to pin down, we’re providing a list for you. Here are our best tips on savvy, concrete ways to convey to your clients that you’re providing premium services that they need

• 1 - Upscale social status signals, which include:
  • 2 - Your dress
  • 3 - Your body language
  • 4 - Your verbal and written communication
  • 5 - Your possessions (house, car, accessories, and the tools you use in your work)
  • 6 - Your taste in things like literature, music, and art
• 7 - Creating a "whole package" experience for your clients. This might include:
  • 8 - Making meetings into enjoyable "events" by bringing in in a popular speaker, having those meetings off site and footing the bill, etc.
  • 9 - Having your assistant handle certain obligatory admin tasks for your client.
  • 10 - Footing the bill on trivial expenses that would normally be shared by you and your client.
  • 11 - Finding ways to do things your client will look forward to.

  • 12 - Sending a hand-written thank-you note when a big project is complete

  • 13 - A positive, upbeat summary of each week’s progress
• 14 - Send social trust signals:
  • 15 - Testimonials from other reputable or high status people or companies
  • 16 - Public appearances like speaking engagements
• 17 - Signal that your company is more "professional":
  • 18 - Professional client-facing materials, including:
    • 19 - Your website
    • 20 - Your phone number & voicemail message
    • 21 - Your printed brochure, press kit, and other printed materials
    • 22 - Your branding package (logo, business card, letterhead if you still use that, etc.)
    • 23 - The level of polish in your written communication, including removing typos and other errors
    • 24 - Professional design & consistency for all your client-facing materials
    • 25 - Everything else you send your clients, including:
      • 26 - Proposals
      • 27 - Reports
      • 28 - Email domain name, formatting & signature block
  • 29 - Being on time, calm, and prepared for client meetings
• 30 - Other status signals that lead to higher perception of intangible value:
  • 31 - Exclusivity. Some examples might include:
    • 32 - A trademarked name for a diagnostic tool that you have created
    • 33 - An exclusive name for a certain process or type of report. While the content may not be exclusive, your naming of it is.

All of these signals create emotional security for your clients and prospects. Get most or all of them right, and your clients will feel more safe going with you.

Combine that feeling of safety with strong quantifiable value, and you've got a killer across-the-board value proposition that will set you up for life.