How I’m planning to package user services
On the Monash Research business website right now, you could find multiple pages explaining and extolling our vendor consulting services. We even have posted standard contracts that:
- Are concise.
- Are priced in terms units of work, yet do not require me to meter services at precise hourly or daily rates.
- Have a minimum scope that allows me to feel comfortable I’m spending enough time with a client to do good work.
- Extend over time, mimicking the subscription model of analyst services.*
- Do not contain any concept of “work for hire,” transfer of intellectual property, or “we own your brain.”
- Don’t have any other features that are stunningly inappropriate for our business.
By way of contrast, the user services portion of our site is only a few lines long, and that’s beginning to hurt. When users do ask for consulting services, I have to define each project from scratch. I just suffered through a painful process in which a user insisted on writing their own contract. Even worse, I suspect that I’m missing out on a lot of potential user relationships I could have if I were a little more encouraging of them.
So I want to fix things. Most of the principles above carry over just fine to the user case, but there’s one big difference. While the “extended over time” aspect is great for vendors because:
- There’s always another release to plan and position
- They’re used to paying analysts out of subscription-oriented budget lines anyway
users — at least the ones I see — seem more focused on particular projects, generally along the lines of a once-every-several-years rearchitecting. More specifically, when users approach me for advice, they generally are:
- Looking to significantly upgrade their analytic capabilities.
- Looking to adopt a new brand of analytic DBMS.
- Looking for architectural advice too.
- Interested in advice on BI and/or predictive analytics strategies as well.
- Correctly anticipating that, once the project is underway, we’ll probably uncover issues and opportunities (not always in the analytics area) they didn’t know they had.
The model I’ve come up with to address all this is to define everything in terms of …
… Service Units, of which there are three kinds:
- Session Units. A Session Unit comprises a meeting, telephone or in person, of 1 ½ – 2 hours, plus appropriate preparation (commonly preliminary phone calls and reading to acquaint us with specifics of your situation and needs).
- Document Review Units. When you are preparing a planning document of some kind (for example, technical architecture or vendor short list), a Document Review Unit consists of our feedback and advice through several iterations, starting from your initial draft.
- Retainer Units. A Retainer Unit allows unmetered quick inquiries for a period of time, typically 1 ½ – 3 months.
Our minimum project size is two Service Units – a Session Unit to start off and a Retainer Unit to help address follow-on and ancillary issues. This lets us advise you with the care and insight you expect. Beyond that minimum, project structure is flexible, and can be tailored to your specific needs, working style, and budget.
While on first reading that’s somewhat vague, it’s as concrete as I know how to get while maintaining the flexibility to:
- Reflect clients’ preferred ways of working.
- Adapt to surprises as the project unfolds.
- Volunteer advice and tangential thoughts without worrying about racking up fees for things the client didn’t actually ask for.
The price per Service Unit is $5,000, which means minimum project size is $10,000, with an approximate target of $25,000 per phase.
This kind of pricing — which has been validated in several recent user contacts and engagements — reflects my position at an extreme end of the freemium spectrum, in that I:
- Spend a large majority of my time doing research and giving it away for free.
- Charge high rates for the time I do actually sell.
One last thing — I like to talk to users, and hence want to have a low-priced, single-conversation offering as well. My current thinking about that part is:
- One hour phone call.
- Limited email follow-on afterwards, along the lines of:
- “Are you SURE you were right to say Product X doesn’t have Feature Y?”
- “Please remind me — why were you opposed to Product Z?”
- “Yes, we’d love an email introduction to a marketing exec at Company W.”
The price for this low-end offering would be $1,995, limit 1/customer/year. I.e., it’s a bargain version of the Session Unit described above. And there would be a special simplicity rule — absolutely, positively no paperwork except our standard NDA agreement, an invoice, and perhaps a W-9 form. If I can do 10 of those a year — well, it would pay like one medium-sized vendor relationship, and it would give me the opportunity to talk with 10 more users who are interested in talking with me.
And so we finally get to the question that is my reason for making this post:
Do the plans outlined above match the way users want to buy analyst consulting services such as ours?
Opinions and suggestions will be greatly appreciated.
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[...] out how to offer quasi-subscription retainer vendor services even so, but find it easier to sell user services on a project [...]