As a result of this trend to emotional pricing, some service providers are becoming more creative with their pricing models, attempting to corral the emotion that goes into the negotiation so everyone is happy with the result.
For example, Mark Belchetz, a Toronto business-growth consultant who serves businesses in the $5-million to $10-million range, often offers a retainer and percentage system to clients. Belchetz says his system, which involves sharing a portion of increased revenue, gives clients comfort that his interests are aligned with theirs. The retainer commits the client to the consultation.
“It’s a version of a pay for performance model,” he said. “Not many consultants use it, so it differentiates me. Many small businesses fear consultants. The fees seem open ended and they’re not sure what they’re getting for them. I find it resonates quite well with some people because I’m sharing the risk, I’m putting my money where my mouth is.”
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