TD:LR

When working with consulting companies to help them craft an understanding of the value they provide their customers, and how they can charge for that value, I outline a pattern which allows that value to be classified into one of the 4 E’s.

The 4E’s are:

• Effort
• Expertise
• Experience
• Efficiency

For each of the E’s we focus on what problem you are solving for the customer, what the customer believes they are buying to solve the problem, the type of interaction you will have with the customer when solving the problem and the best pattern to charge for solving the problem.

Effort

Effort refers to the amount of work or energy put into achieving a goal. It is a measure of the physical or mental exertion required to accomplish a task.

The customer is hiring you to get a data job done because they do not currently have a team member who has time available to get the data job done.

The customer is hiring you because you are available and you have the skills required to do the data work.

The customer will guide you on what data work needs to be done, you will do the work with constant guidance.

You provide your time for an hourly rate to deliver that effort.

Expertise

Expertise refers to the knowledge, skill, and experience that someone has in a particular area. It is the ability to perform a task with a high level of proficiency.

The customer has a known problem, the problem has a level of complexity, and the customer needs somebody to solve the problem 

The customer is hiring you because you have done something a number of times before and it’s better value or lower risk for a customer to get you to do it, than it is for their team to learn to do it themselves.

The customer will state the problem and then expect you to work towards solving it, with minimal guidance.

You provide your expertise for a high hourly or daily rate that is commensurate with the level of expertise you have and the level of scarcity for that expertise in the market.

Experience

Experience refers to the knowledge, skill, and understanding that is acquired over time through exposure to different situations. patterns and contexts. It is the result of learning from past successes and failures.

The customer has some work or an outcome that needs to be done, the work has a high level of complexity and uncertainty and there is no expertise available in the market from people who have done it before.

The customer is attempting something that hasn’t been done before and your experience in similar areas means its lower risk if you do it compared to their team doing it.

The customer will state the outcome they want, and expect you to iterate ways of delivering that outcome with them and their team.

You provide your experience for a fixed daily, weekly or monthly rate.  You may decide to offset your rate slightly if the work will result in you getting a new set of Expertise added to your toolkit.

Efficiency

Efficiency refers to accomplishing a task with the minimum amount of time, effort, or resources. It is a measure of how well someone can use their effort, expertise, experience, and resources to achieve a goal.

The customer has some data work they need doing, and they want the work to be as fast or as cheap as possible.

The customer is hiring you because you have proven you can do something faster or cheaper than any of the alternative options.

The customer will expect you to bring good practice and patterns to deliver the work in a consistent and repeatable way.

You provide your efficiency on an ongoing basis based on recurring payments.

A number of ways you can price this value:

• You provide an outcome for a fixed cost that is cheaper than any other option.  
• You provide an outcome for a price equivalent or higher than alternative options but guarantee that it will be continuously delivered in less elapsed time or with less risk.
• You provide the outcome for a percentage share of the value the customer receives from that outcome.

Often you will want to mix up your E’s into a hybrid consulting offering.  Try not to, it will confuse both you and your customers.  Pick one E and Execute mercilessly.

Keep making data simply magical