Scope creep is what happens when changes are made to the project scope without any control. The activities that you have agreed with the client grow during the engagement, which is harmful to everyone. You will need to invest more time and resources, and the client will almost always see a delay in the delivery.
The best way to avoid it is by creating a methodology. But before that, you need to think about your pricing.
Why Charging By The Hour Invites Scope Creep
When you charge by time and materials, scope creep will upset clients because it directly impacts the cost and ROI of the project.
When you add unexpected activities to the project, the blame game starts. Clients doubt your competence by pointing that you did not see the need for those changes in your proposal, while the consultant blames the clients for changing their goals and minds during the engagement.
When you adopt value-based pricing, on the other hand, you're not selling your time. You're not selling a product or a service. You are selling results.
The way you generate those results is by following a specific process and/or creating resources. Here's the goal, here's how we will achieve it, and here's why it's been structured that way.
You can look at your methodology, or the processes and systems you use to deliver the outcome, like a box.
Most consultants can describe the things that they do that are unique - that if offered at an hourly rate would not work, but when it's packaged like a product or process is much more valuable. This package is not only more profitable for you, but also easier for the prospect to understand and hire since it allows you to describe the "boundaries" around the box.
When you are selling your hours, it's really easy to break the box. It's unthinkable for any consultant to be in an hourly call with a client and say "I'm not going to talk about X, Y, or Z". When you sell your time you're offering all your expertise, not only part of it.
Leverage Your Experience And Make The Leap
Many consultants started their independent careers charging an hourly rate. But at some point you will have done enough projects - with similar clients, to achieve similar goals - where you're going to extract some "method to the madness". And is at this point that most consultancies plateau.
They never really document the methodology. They never really codify it in a way that can it can be bought differently. And until you make that transition from billing your hours to packaging offerings, you are never going to be paid fairly for your work.
Looking back to my own consulting practice, before this transition point, everything felt kind of a mess. Nothing is really standardized, every engagement seems to be a one-off, and you might feel frustrated at this stage. The change might be uncomfortable, but delaying it is even worst.
The Benefits To Your Prospects And Sales Process
Making this leap will not only improve your delivery but also communicate more credibility to your prospects. Having a methodology implies you have seen enough engagements that this approach will be applicable and effective in the vast majority of the cases.
It will also help you improve your sales effectiveness. Whenever you have a custom request, having a methodology makes it easier for you to say: "I had clients who asked me to do a similar one-off project before, and... maybe we're not the ideal match."
If you want to consistently deliver good results and build a strong brand in your niche, you must be brutal about what is a match, and what isn't. And this applies not only to prospects, but to existing clients.
When you are scoping you might say:
- "This is out of scope"
- "No, we don't do that"
- "I know you want to make this change, but that's a bad idea"
Clients appreciate this because now they have a perspective and know what are your box's boundaries. And you both know early on whether there's a match or not.
The act of saying "I don't know if this is a match for you, but this is our methodology - how we got this done and delivered great results for others" is a very different conversation than saying "I have a bunch of hours here, what do you need?"
By Danilo Kreimer
July 2, 2021