Pricing is a hot topic among my professional-service clients and prospects and around the blogosphere as well (Gini Deitrich started a conversation about it, Versage talks a lot about it, even David Maister has weighed in) . It can be challenging to align the value created by your work with any tangible measure. Think about it: Aren’t there times when you come up with a good idea, the client thinks you’re brilliant and you wish you charged five times more than what you quoted? And then there are other times when you feel like nothing you come up with makes the client happy, even though you know it’s more their fault than yours (and sometimes, the other way around). How do you charge for that?

Ideally, clients and professional-service firms would both like to have some kind of system that ties fees to the results delivered. The client takes your advice, the advice works, the client makes lots of money – and they, in turn, are happy to pay you a lot of money. I mean, wow, it works for everyone! Unfortunately, this isn’t as easy as it sounds. More often, the client waters down your great idea, their team modifies it (or, in many cases, they just ruin it), and the market affects the result. In the end, you can’t tell exactly what effect you had on the business or the project’s results. So, if you charged for end results, you wouldn’t get paid for the work you did … and that’s a problem!

But, the concept of clients valuing your work, and you getting paid for that value, is every professional-service firm’s goal. So, how do you do that?

If you know me you know that I have a lot of ideas on this issue. I started writing a blog post on it and it turned out to be enough material for 4 posts (or maybe 5, we’ll see). That’s OK, because there’s a lot of ground to cover here, I’ve written one post on each of the three most common billing structures (hourly billing, project or retainer billing, and alternative billing), their advantages and disadvantages, and where each might have a place. I’m putting up one per day this week so stay tuned.

In the meantime, what challenges do you face in how you charge your clients? What methods have worked best for you?

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Brad Farris is a small business advisor with Anchor Advisors, Ltd. in Chicago, Il. Since 2001 Anchor Advisors has been helping creative professional firms to grow, by helping them clarify their purpose, get the most from their people, keep their eye on key performance measures, and implement consistent processes. Brad is also the author of The Business Owner’s Champion: 6 Practices to Build your Nerve and your Business.