Barriers consultants face when trying to raise their fees

What are the barriers that keep consultants from raising their fees? Transcripts from an 0n-line conversation with Peter Meyer. Held on June 19, 1996

SCraigC: Welcome to the Consultant's Forum. Tonight PeterMeyer will be discussing the

SCraigC: barriers consultants face when trying to raise their fees.

KAVCO3: You're welcome, and thank you for the discussion. G'night ALL!

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Nov8tion: sleep tightl

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Nov8tion: Scraig how do we join in

SCraigC: We will let Peter start off whith his presentation. if you have a question, please

SCraigC: type a "?" and wait to be recognized. After the presentation, then we will answer

SCraigC: any and all questions.

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Nov8tion: thanks

SCraigC: Just stick around.

PeterEva: Well, maybe not all questions <g>

SCraigC: Peter, if you are ready, the floor is yours.

Apprimus: Hello fellow consultants, whats the topic tonite?

Nov8tion: setting fees

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Apprimus: Got it SCraig

PeterEva: If everyone is ready, I will get started.

PeterEva: Greetings friends!!

PeterEva: Thanks Craig,

PeterEva: Let me start with some prepared notes. I will download

PeterEva: this as a 100 second "speech" with pauses,

PeterEva: so if you have questions, please tell Craig by tapping ?

PeterEva: If you want to look at the best ways to set fees, lets

PeterEva: start with the survey that Herman Holtz and I did a few

PeterEva: months ago. (If you want a copy, send me

PeterEva: an Email at PeterEva to get the complete survey.)

DANOBKM: hello craig

PeterEva: Let me start by saying that we define a good rate as

PeterEva: one that allows both the consultant and the client to

PeterEva: feel they have gotten a

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PeterEva: fair deal. That, in turn, makes it more fun for us

PeterEva: consultants.

PeterEva: That is important!

PeterEva: We asked a few hundred consultants what stopped

PeterEva: them from raising fees. Let me summarize the

PeterEva: answers here, then ask you to answer a question, and

PeterEva: then ask you for questions.

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PeterEva: It is clear that for most respondents to the survey the

PeterEva: biggest barrier is **inwards.** Let me give you an

PeterEva: example.

PeterEva: "I believe the biggest barrier to getting

PeterEva: one's rates is one's own mental set."

PeterEva: "You have to believe that the rate you ask is right

PeterEva: for you, you are entitled to it, and there is no question that

PeterEva: it is a fair exchange for what you do for a client.

PeterEva: You have to believe it before you can make a client

PeterEva: believe it."

PeterEva: That is the top barrier.

PeterEva: For every 100 who say that, 86 are feel the limit is

PeterEva: **competitive pricing.** "I

PeterEva: don't know what the range of acceptability is in higher

PeterEva: fees compared to the next consultant." I should say

PeterEva: that many do not feel

PeterEva: that this is a limitation. Some have found a

PeterEva: process to

PeterEva: dismiss competition (for more on that, ask me.)

PeterEva: For every 100 who are internally focused,

PeterEva: another 75 feel constrained by long term relationships.

PeterEva: Finally, for every 100 who answered, 57 consultants

PeterEva: would say that the barrier is

PeterEva: the value that the **client** perceives. Think about this.

PeterEva: In other words, **almost twice as many of us are

PeterEva: restricted by our own internal views as by what our

PeterEva: clients see as value.**

PeterEva: This is the crux of the matter.

PeterEva: If we are focused on our own sense of what is valuable,

PeterEva: we may miss the clients' idea of what really matters.

PeterEva: When that happens, we may be priced too high or too

PeterEva: low. Is that bad?

PeterEva: Too high loses jobs. Too low does not just cost us

PeterEva: money, it leaves us with clients whom

PeterEva: we may not like. That costs us fun!

PeterEva: My conclusions:

PeterEva: 1 - Many of us are charging less than our clients will

PeterEva: pay.

PeterEva: 2 - Many of us are giving less satisfaction than we

PeterEva: might.

PeterEva: 3 - Many of us are having less fun than we should be

PeterEva: having.

PeterEva: 4 - We can follow a process that allows us to get past

PeterEva: some of these barriers.

PeterEva: And now my question for you. Does this strike a chord

PeterEva: with you? <ga>

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Nov8tion: ?

PeterEva: Nov8, go ahead

DabrieoCo: ?

Nov8tion: Yes it does strike a chord, how do you suggest we help customer perceive value

PeterEva: Actually, Herman and I have been documenting a process for that.

PeterEva: It focuses on asking the client

PeterEva: what his or her most critical problem is, and then using a structured

PeterEva: path to get to a designed solution. Sounds complicated, but it works well!

PeterEva: Nov8, what do you do?

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Nov8tion: I somewhat new at this but after initial meeting with client, I develop proposal based on

JeanM32921: Yes. I have set fees high. While many potential clients do not ask me to work for them,

Nov8tion: what the client says and what I perceive to be problem and solution I then present a

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Nov8tion: proposal in terms or rationale, objectives, strategy without being too specific, projected

JeanM32921: the ones that do accept my fees give me challenging work and seem to appreciate the quality of my work

Nov8tion: outcome and fees

PeterEva: Nov8, you are starting down the same process, let me suggest

PeterEva: a variation

PeterEva: When you do the design, do it with the client and the key stakeholders in the client

PeterEva: If you do it as one meeting, then you will be getting buy in early. You will

PeterEva: also eliminate the chances of surprise later.

PeterEva: Does that help answer the ? <ga>


Nov8tion: except for "starting down the same Process" explain...also in the

prosal part of strategy

Nov8tion: provides for the input of key decision makers

PeterEva: I do not have time to post the entire process here, but

PeterEva: I do not want to wait for the proposal to get that input. Instead,

PeterEva: I want them to be part of desiging the solution. That makes them

Nov8tion: I didn't mean that.. I meant your statement that "I am starting down the same process

SCraigC: Your next MDHCON

PeterEva: part of the solution. They will buy what they are part of designing

MDHCON: Where is your process published? Can we purchase?

PeterEva: Oh, well the process starts as you are going now. Step four is different between

PeterEva: the process and what you do.

Nov8tion: I see, I attemp to do that in the proposal but I should do it early on you...thanks

PeterEva: Yep, get the agreement done before you propose, then offer a one page proposal.

PeterEva: Who is next?

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PeterEva: MDH - You can get

SCraigC: DabrieoCo is next

MDHCON: Where?

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PeterEva: the process by sending me an Email (to Peter Eva) asking for the 7 Step

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PeterEva: process. I will not charge you, by the way.

DabrieoCo: you didn't mention my competition and what they charge. Doesn't that matter?

PeterEva: Dabrieo, well, not usually. Let me explain

Nov8tion: ?

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JeanM32921: Got to go. Thanks all.

PeterEva: If you and the stakeholders are designing a solution to a problem they really

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PeterEva: feel is important, then they are focused on themselves.

PeterEva: The competition is not part of the design. If you do a good design, then

PeterEva: the competition is on the outside of that because they were

PeterEva: not in the room.

PeterEva: Does that help?

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SCraigC: Nov8tion, your next.

DabrieoCo: it does, sort of. But don't I run the risk of being then sent to bid?

Doctortoc: ?

PeterEva: You will if you appear to be the same as anyone else. But, ask yourself,

Nov8tion: One page proposal..what is the shortest was 2 pages

PeterEva: if you are dealing with the key stakeholders, and they are convinced that

PeterEva: this solution is what they need, why would they let purchasing take it to bid?

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PeterEva: In reality, these deals almost never go to bid, which is why

PeterEva: sometimes we find ourselves

PeterEva: on the outside looking in.

DabrieoCo: Oh! Makes sense. Thanks!

PeterEva: Nov8 - the proposal is really just documenting that design

PeterEva: meeting. The success criteria

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PeterEva: of the project, the time it is to be done, what they are responsible for

PeterEva: and the price are about all you need. You sold it all earlier.

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PeterEva: Does that help?

Nov8tion: I see

PeterEva: thanks<ga>

Nov8tion: I just have to learn to be more concise

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PeterEva: Nov8 - execs love concise. (how is that for concise?)

Apprimus: I am just starting out...making my trifold, etc., want to promote value without sounding cheap...

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SCraigC: Doctortoc, your next

Doctortoc: What are some "words" you might use when first approaching a company/strategic alliance/etc.?

Nov8tion: ?

PeterEva: Doc - I start with these words - "What is most critically

PeterEva: important to you? What will keep

PeterEva: you awake at night?"

PeterEva: Does that make sense?

PeterEva: <ga>

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Apprimus: ?

Doctortoc: Ah yes! Of course!

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PeterEva: Craig, who is next?

SCraigC: Nov8tion, you next

SCraigC: Then Apprimus

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WendyBerk: hello anybody got any ideas about cheap, fixed bridge loans for $100,000?

Nov8tion: In regards to a client getting bids

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Nov8tion: Where I formerly worked they always looked for the best price and best deal

JBDJERSEYS: Anyone own an athletic apparel/sporting goods store?

Nov8tion: you don't think clients will shop around

PeterEva: Purchasing is responsible for getting that low price, so the

PeterEva: question is who is responsible for

PeterEva: running the business.

PeterEva: They will not care about purchasing rules.

PeterEva: Let em give you a real world example.

Nov8tion: IN the case I'm speaking of it would be the same level exec I come into contact with

JBDJERSEYS: Looking to expand your apparel products lines?

PeterEva: We did a deal with a network company last year, and they VP

Nov8tion: to make the decision to go with x y or z company for a training program

PeterEva: Service was sure that the design was right, his directors were sure.

PeterEva: They never told purchasing they bought!

JBDJERSEYS: Champion, STX, Bauer, Majestic, Red Fox, Fruit of the Loom, etc. anyone...anyone

PeterEva: So, if your exec has a burning issue that you can solve

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PeterEva: I think that you should make sure he or she agrees. Then, let them

Nov8tion: In "selling" a training design or when I was on the purchasing end... the purchase dept

PeterEva: tell purchasing why there is no reason to bid.

Nov8tion: only had responsibility of processing order.. the execs had last say

PeterEva: And the first say?

Nov8tion: yes

PeterEva: That is all that counts. Let the execs run the business, you are there for them, as

Nov8tion: Maybe because I worked for a medium size company and my clients are small to medium

PeterEva: is purchasing.


Nov8tion: ?

PeterEva: You can still do this with them. Go for it.

PeterEva: Who is next?

SCraigC: MDHCOn is next

MDHCON: Do you do value based pricing? or based on time and materials?

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SCraigC: Then Nov8tion

PeterEva: Craig, what about App?


PeterEva: MDH - I always do package pricing. You?

PeterEva: Nov8, go ahead

Nov8tion: Via e-mail with you I discussed ...$100 seem to be going hrly much weight do you

MDHCON: I present a package, but it usually has time bundled in rather than value to the client

MDHCON: ergo Allen Wiess' concept.

Nov8tion: think credentials, i.e. has on establishing expertise to warrant the rate vs actual experie

Nov8tion: ce

Nov8tion: experience

PeterEva: MDH - I work on the idea that the client execs want a single bid, so I do that

PeterEva: Nov8 - I does not matter what I think on this.

Nov8tion: ? Just wanted your opinion

PeterEva: Clearly, some clients value it. However, I think that most

PeterEva: clients value results higher

Apprimus: How do you promote value to clients who are comparing lump sum prices...without saying you're cheaper

PeterEva: Look at the surveys. Less experience gets 4X the rate!

Nov8tion: thanks

PeterEva: You are welcome.

PeterEva: MDH - thanks. Did I answer the ?

Nov8tion: ?

Apprimus: so i promote less experience?

PeterEva: App - thanks for waiting.

PeterEva: No, you do not promote less experience <g> even if that worked for me <GG>

MDHCON: Not quite, but I don't know how to phrase it correctly in these bits. May I send an e-mail?

PeterEva: I think that the client wants to see his or her problem go

PeterEva: away, so that is all that I

PeterEva: would suggest promoting. In other words, your brochure is not it, but the promise

PeterEva: of results is. Does that make sense?

PeterEva: MDH - please do. Anyone else also, feel free.

Apprimus: i should be promoting promises of results?

Nov8tion: Any guidelines for setting fees for a monthly retainer..potential client interested in 1 yr

PeterEva: App - Let me ask what business you are in.

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Nov8tion: Oops sorry... i jumped the gun...misunderstood anyone else feel free, thought meant ?

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PeterEva: So, what do you deliver?

Apprimus: reports on the environmental condition of commercial properties for banks

Apprimus: law firms, realtors

PeterEva: And what do the law firms, realtors, banks get?

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Nov8tion: ?

DabrieoCo: ?

PeterEva: That is what to promote. Some would promote reports, you would promote

PeterEva: the end result.

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PeterEva: This is true for all of us. We should promote the solution, not the process.

PeterEva: App - am I answering your question?

SCraigC: ?

Apprimus: a short report. 10-20 pgs describing the history of property and current conditions, eval of risk

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Apprimus: for the future buyer of the property or the lender

PeterEva: So, you help reduce risk? That is a great service. Better than reports.

Apprimus: may be industral or commercial ...from geology to haz waste usage

Apprimus: yes...i minimize risk

MDHCON: So really what they get is peace of mind or an early warning.

PeterEva: Sorry to be to tying over you.

SCraigC: Nov8tion is next, then DabrieoCo, then SCraigC

PeterEva: Let me go over to Nov8

PeterEva: ga

Nov8tion: Any guidelines for setting fees for a monthly retainer

Nov8tion: potential client wants monthly retainer for a year

PeterEva: No, I don't have a lot of wisdom there. I focus on packages. What does the client get

PeterEva: for retaining you for so long?

Apprimus: ?

Nov8tion: customer service and sales training on a monthly basis to

Nov8tion: decrease customer defection and increase customer base

Nov8tion: also followup assessment assistance with skills transfer

PeterEva: Ah - I would price the value of that training, based on

PeterEva: results! That is the monthly in my book

SCraigC: DAbrieoCo is next.

Nov8tion: Won't know actual results till end

Nov8tion: or maybe bi monthly

PeterEva: Then, in order to protect your self and your client's job, set some

PeterEva: predictions of results. If you do not set expectations, someone else will!!!

SCraigC: Good point

PeterEva: And usually, you will not be happy with that.

PeterEva: ga

PeterEva: Dabrieo?

Nov8tion: I did, but they may be percieved as vague althought the client seemed to like them

DabrieoCo: May I? That was an interesting exercise with App & good comments for others. Now I need to know...

PeterEva: Nov8 - good.

PeterEva: Dab - yes

DabrieoCo: do you have a book or something that talks more about this -- like how to do it in depth?

PeterEva: I have this book here in the computer, but that does not help.

Craig - can I

PeterEva: plug something here?

DabrieoCo: I mean, we can only learn so much from e-mail! :-)

SCraigC: Sure

PeterEva: Herman and I are doing a program, full day workshop is a part of it.

PeterEva: That program goes through the process in depth and uses the

PeterEva: practices of the consultants in the room to build the examples

PeterEva: It is grueling, but you will get the info. More an invite, drop me

PeterEva: an Email at PeterEva

PeterEva: End of plug

SCraigC: Apprimus is next

Apprimus: How does one overcome the problem of promoting a one-person consulting biz, should i price myself

PeterEva: Did that help Dabrieo?

DabrieoCo: Thanks! I'll send email.

PeterEva: App - you can price at 1/2 of the big 6. Another option is to price

Apprimus: should i be...on hourly much as i was at my former employer...$85/HR?

PeterEva: yourself at project rates.

PeterEva: Let me explain a little.

PeterEva: If you and the client understand what they are getting, and you are

PeterEva: able to define the project, you can set a price that is within

PeterEva: the value they get. This will usually be much more than $85 per hour.

SCraigC: I have several retainer clients. I have a set proce for the year that

SCraigC: allows up to X hours per month. Any time above that is billed at a

SCraigC: predetermined, discounted rate.

PeterEva: I saw a deal at 20K for a day yesterday.

MDHCON: Bingo, that is what I was trying to get!

Apprimus: or should i offer about 20-25% less because of the laower overhead of working at home?

PeterEva: Craig's system works too.

Nov8tion: ?

PeterEva: App - if you do the job - do I care if you work at home?

PeterEva: ga

SCraigC: Why think that because you work at home you are providing less value/service.

PeterEva: Oh, the 20k deal

PeterEva: The client thought it a steal, so it was.

SCraigC: Nov8tion has the next question.

PeterEva: Nov8, ga

Nov8tion: Have a client that could open doors for me but want a discounted price

Nov8tion: I have reduced the price somewhat along with the services I would offer

MKTME: Great point regarding value of the product/service wherever you happen to do your designing.

Nov8tion: at what point do I safe enough

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MDHCON: (Goodnight everyone, Thanks Peter. Great session.)

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Nov8tion: I mean say enough is enough and cut my losses

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PeterEva: Your compensation need not always be in dollars. If they

PeterEva: will guarantee something of value to you, then discount by

PeterEva: that value or less.

PeterEva: Thanks MDH

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Nov8tion: Thanks Peter for you wisdom

Nov8tion: for your wisdom

PeterEva: Nov8 - of the client wants too much by 10cents, that is too much.

PeterEva: And you are welcome. Come to the program!

Apprimus: I dont think i am offering less fact more...but should i promote lower fees or higher?

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Nov8tion: will e mail you tomorrow for mor infor on program

Apprimus: as a result of working out of my home...

PeterEva: App, that is up to you. Do you want ritzier clients or cheaper ones? You decide,

DabrieoCo: ?

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PeterEva: and they will not care about your home if you deliver what they absolutely need

PeterEva: Craig, is anyone next?

Nov8tion: ?

Apprimus: You know PeterEva...i would like to hire u to look at my marketing

draft trifold for your insight...

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PeterEva: App, I think that this is beyond the chat room. Can you Email me?

PeterEva: Dabrieo, ga

DabrieoCo: real quick. It seems like we shouldn't promote rates or anything else but results. That right?

PeterEva: What do your clients want? rates or results?

MKTME: Thanks for for letting me listen to everyone's comments....very

helpful. Goodnight

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SCraigC: I have a questionfrom an earlier comment.

DabrieoCo: <sigh> they want results. Will you cover that in the seminar with

Herman Holtz?

PeterEva: GA

Apprimus: Yes

SCraigC: What about dismissing your competiton

PeterEva: Dabrieo, you bet!!! Come on down.

PeterEva: GA Craig

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Nov8tion: Please explain wants too much by 10 cents..not sure If i follow

PeterEva: Craig, I missed the question.

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Nov8tion: ?

PeterEva: Nov8 - It is simpler that I make it. If you

DabrieoCo: (Thanks! I will definitely be there! Good night all -- great seminar PeterEva!)

SCraigC: What were you saying about "dismissing your competition"

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PeterEva: have a line that you will not cross, do not cross it. If he

PeterEva: want 10 cents over the line, the

PeterEva: answer is still no.

Nov8tion: thanks

PeterEva: Craig, I do not mean to think ill of them. Instead, I mean that your focus

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PeterEva: is your client, not others. Do not let them

PeterEva: run your practice. Deliver exactly what the client needs in order to

PeterEva: really succeed, and let the competition do what they do.

Nov8tion: ? for Scraig

PeterEva: Craig, did that make sense?

SCraigC: GO ahead

Nov8tion: May be a dumb question, but realitvely new to on line waht does GA mean

PeterEva: Sorry, my fault. Means Go Ahead.

Nov8tion: Wow...good thing it wasn't a snake...would have bit me

PeterEva: Well, I think that we are winding down. Are there any questions that I missed?

Nov8tion: thanks for the answer... I missed the obvious

Nov8tion: Yes

PeterEva: No worries

PeterEva: ga!

Nov8tion: Regarding selling results.. training sometimes viewed as soft skills

SCraigC: Does any one else have any questions for Peter? if not then the floor is open for

SCraigC: any topic of discussion.

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Nov8tion: my brochure tag...maximize employee impact on your bottom line...comment?

PeterEva: Nov8 - good start! Now, get more concrete. How much, what contribution.

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PeterEva: How specific can you get?

PeterEva: Get even more so!!!

PeterEva: BTW all, thanks for your patience tonight!

PeterEva: I appreciate it.

Nov8tion: i concentrate on customer loyatly = profits

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PeterEva: Can you prove it?

Nov8tion: loyalty based on employees interpersonal business skills

SCraigC: Loyalty from satisfaction?

PeterEva: I like it so far, but I want more from you. Show me numbers! Show me a deal that

Nov8tion: yes to some degree..articles. expert quotes, studies.

PeterEva: would have gone south without it! I can show you $90M in revenue that one

PeterEva: customer got here from that, show me numbers like that! Then the

PeterEva: experts and the studies.

Nov8tion: Great advice..I'll look for something concrete i can add to brochure

PeterEva: <geeze, has my English been that terrible all night?>

PeterEva: Good, and then for more. And more.

PeterEva: If everyone else thinks that training is soft, and you show it to

PeterEva: be different, who will they come to????

Nov8tion: feel like I'm on right track..only been doing this for less than a year

PeterEva: Let me be clear

PeterEva: You are on the right track. Keep it up!

Nov8tion: to what I'm aiming for

Nov8tion: Thanks I have definitely learned something and you have also confirmed that I am doing

Nov8tion: some things right. That's helping to combat that inner voice that is trying to keep my fees

Nov8tion: low

PeterEva: Nov8 - That is the best thanks I could ever get. Thank YOU.

Nov8tion: thanks again have to sign off and feed my rotweiler before he gets means thanks thanks,

PeterEva: You are welcome

PeterEva: Any other questions before I stop blathering?

Apprimus: Does low self esteem usually translate to lower fees?

PeterEva: App - We did a study on that. It indicates

PeterEva: that the answer is yes, but I think this is difficult. First, you can

PeterEva: get the study by sending me an Email and asking

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PeterEva: Next, remember that people with truly low self esteem tend not to be consultants.

PeterEva: So, the population is skewed.

PeterEva: Umm, I didn't mean it that way.

PeterEva: <g>


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Apprimus: Are you a psychologist...what is the typical character/psychological sketch of a consultant?

PeterEva: KC, ga

KCTP: New to AOL how do I email You?

PeterEva: App, nope. I am a former GM for IBM. I am not qualified to answer that.

PeterEva: KC - tap new message (ctrl+M on Windows) and then put PeterEva in the address.

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Apprimus: Peter...thanks for your help...will be e-mailing you...bye...all

PeterEva: Thanks all, gotta run! Drop me an Email if you need the 7

PeterEva: Step process for raising fees or if you want the survey, or

PeterEva: just to say hi!

Doctortoc: Peter:Tnx for the stimulating & grounding ideas. I'll Email U.

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KCTP: Thank You. Goodnight All.

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PeterEva: Thanks to you!