Over the last week I have done 2 articles on how an IFA has to cost his services, and how a client looks at the cost of a service. I decided to look at the training/ speaking side of the business because it is far more difficult to cost the business.
Let us say one client accepts that he will pay Rs. 50,000 for a one hour engagement in a metro like Mumbai. Remember now there is no travel unlike the earlier example where I had to travel to Bhubaneshwar and spend 3 days for doing a 2 hour lecture. Here I could just go in and get out in 2 hours, and lunch / tea was actually optional. The only cost from my point of view was the transport to an fro the venue.
This started make me wonder a little bit. I feel (felt) like I had to take every engagement. After all, why do you have to be to decline something when someone says “I’ll give you Rs. 25,000 an hour”? It (is)was amazing to me. I (cannot?)couldn’t believe it. My question to myself was simple “Why should someone pay Rs. 50,000 to be at a podium for 2 hours?”.
I was constantly wondering why, and I was sure (am sure) that there are smarter people out there who can do a better job. Then suddenly realization dawned.
The wealth management company had got 300 odd very high net-worth clients in one location – and that was really amazing. These are people who were CHARGING their clients by the hour, and included some people who were also doing high end events. Some of them were doctors (so they were charging per hour), lawyers, and businessmen (all of them knew that for a pro time was the only thing that they were selling.
I had quoted this fee figure and for doing that I had to rework my thinking to accept this. I had to accept that for the event that hires me, it’s worth Rs 50,000 for them. It’s worth it for them simply because it’s good content for them, which lets them take their entire conference, which might be 100 or 200 or 500 (this time it was 300) or 1000 people, and get those people to come back in the future. At the end of the day the event organiser will sell some wealth product – mutual funds, ulip, land, houses, and / or sign up for a wealth / financial planning service. Of course they did receive good content. My involvement might bring audience for future events. In an earlier event my presentation was downloaded 400+ times. I got a good turnout at an event of medical professionals – in fact surgeons who were used to charging on an hourly basis. Of course the audience had physicians too, but as I said, they were specialists. It helped that I had written a book meant for doctors. And so for them, the company had already invested in their relationship with me when they bought copies of my book earlier.
The most important thing here is that I realized my value to them can be way much higher than just the per-unit time to me. Also because they were leveraging the value that I bring in other ways: in a medical conference a 2 hour talk on ‘Financial Mistakes Doctors make’ was just a part cost and it was leveraging the other costs already incurred – registration fees, sponsorships, good content, bringing people back in the future, providing them other services while they’re at the event.
So start seeing what the client is getting by engaging with you. So I can look at the amount and feel ‘oh wow’ or I can look at the per capita how the audience benefited by attending the session. How much did the event cost per capita for the event organisers? Well it was about Rs. 170 per participant. The lunch cost them one zero extra. One doc asked me one question during the tea break. If he had implemented the suggestion, it would have benefited the surgeon by about Rs. 400,000.
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