Why Hourly Pricing Falls Short for BC/DR Consulting

Many consulting firms start with hourly billing because it seems straightforward. You track your time, multiply by your rate, and send an invoice. While simple, this approach has significant drawbacks for BC/DR consulting:

• It doesn’t reflect value: The true value of a BC/DR plan isn’t the hours spent creating it, but the prevention of potential losses that could cost millions, regulatory fines, or reputational damage. Clients aren’t buying time; they’re buying peace of mind and resilience.
• It penalizes efficiency: As you get better and faster, your revenue per project decreases, even though the client benefits from your expertise and speed.
• Clients dislike uncertainty: Hourly billing makes it difficult for clients to budget, leading to scope creep concerns and potential disputes.
• It commoditizes your service: Focusing on hours makes your service seem like a commodity where the lowest hourly rate wins, ignoring your unique expertise and the high-stakes nature of your work.

For BC/DR, the focus should shift from time spent to problems solved and value created.

Factors Influencing BC/DR Consulting Fees

Before settling on a pricing model, understand the key factors that genuinely impact the scope and complexity (and thus the value and cost) of a BC/DR engagement:

• Client Size & Complexity: The number of employees, locations, systems, interdependencies, and overall organizational structure significantly impacts the work required.
• Industry & Regulatory Requirements: Highly regulated industries (Healthcare/HIPAA, Finance/PCI, etc.) have stringent BC/DR requirements that add complexity and criticality.
• Risk Profile: The client’s specific vulnerabilities, potential threats (cyber, natural disaster, supply chain), and risk tolerance level dictate the depth and breadth of the plan.
• Required RTO & RPO: Tighter Recovery Time Objectives (RTO - how fast systems must be back online) and Recovery Point Objectives (RPO - how much data loss is acceptable) require more sophisticated and costly solutions.
• Scope of Services: Are you developing a plan, testing a plan, providing ongoing management, or offering specialized services like cyber recovery planning?
• Existing Infrastructure & Preparedness: Clients with existing documentation and tools require less foundational work than those starting from scratch.
• Value of Assets/Operations Protected: The potential financial, reputational, or operational loss the client faces in a disruption is a direct measure of the value your service provides by mitigating that risk.

Exploring Alternative BC/DR Pricing Models

Moving beyond hourly opens up several strategic options:

Implementing Value-Based Pricing for BC/DR

Value-based pricing is arguably the most powerful strategy for BC/DR consultants. Here’s how to approach it:

1. Deep Discovery: Conduct a thorough discovery process to understand the client’s business, critical processes, IT infrastructure, dependencies, potential threats, existing vulnerabilities, and current state of preparedness. Use this to identify potential points of failure and their likely impact.
2. Quantify the Impact of Disruption: Work with the client to estimate the costs associated with various disruptive scenarios. This could include:
   • Lost revenue per hour/day of downtime
   • Costs of recovery (internal and external)
   • Regulatory fines and legal costs
   • Reputational damage
   • Supply chain disruption costs Example: For a manufacturing client, estimate the lost production revenue per hour of system outage. If it’s $10,000/hour and you can reduce potential downtime from 48 hours to 4 hours, the avoided loss is $440,000. Your fee should be a fraction of that avoided loss. Use data points like industry-specific downtime costs (e.g., $300,000 per hour on average across industries according to some reports) as benchmarks.
3. Define Your Solution and Its Value: Based on discovery, propose a solution (plan, testing, training, ongoing support) that directly addresses the identified risks and aims to reduce the potential impact or recovery time. Clearly articulate how your solution mitigates the quantifiable risks.
4. Calculate & Justify Your Price: Your price should be a portion of the value you provide. There’s no single formula, but it should feel significant relative to the client’s avoided loss, yet substantially less than the cost of inaction. Justify your price by referring back to the quantified risks and the specific benefits of your proposed solution.
5. Communicate Value, Not Just Deliverables: Frame your proposal around the outcomes (resilience, compliance, reduced downtime, peace of mind) rather than just the activities (number of interviews, documents produced).

Packaging and Presenting Your BC/DR Offerings

How you package and present your services significantly impacts client perception and your ability to upsell. Instead of a single, static quote, consider:

• Bundling: Offer core BC/DR plan development as a base, then bundle related services like initial testing, key personnel training, or specific vendor coordination.
• Tiered Service Levels: As discussed, create tiers based on RTO/RPO targets, scope (e.g., covering critical systems vs. all systems), testing frequency (annual vs. quarterly), or level of ongoing support.
• Configurable Add-ons: Allow clients to customize their package with specific add-ons like:
  • Supply chain risk assessment
  • Cyberattack tabletop exercise
  • Specific regulatory compliance module (e.g., HIPAA BC/DR add-on)
  • Advanced testing scenarios (e.g., failover testing)
  • On-site vs. remote support options

Presenting these options clearly and interactively can be challenging with traditional PDF proposals or spreadsheets. This is where modern tools come in. A platform like PricingLink (https://pricinglink.com) is specifically designed to create interactive pricing experiences. You can build your tiered packages and add-ons, allow clients to select options, and show them the price update in real-time via a shareable link. This streamlines the quoting process and provides a professional, engaging experience.

While PricingLink excels at the pricing presentation and lead qualification step, it’s important to note it doesn’t handle full proposal generation with advanced features like e-signatures, contracts, or project management. For comprehensive proposal software that includes these features, you might explore tools like PandaDoc (https://www.pandadoc.com) or Proposify (https://www.proposify.com). However, if your primary goal is to modernize how clients interact with and select your pricing options, PricingLink’s dedicated focus offers a powerful and affordable solution starting at $19.99/month.

Using Psychological Principles in Pricing

Consider applying subtle psychological tactics:

• Anchoring: Present your highest-value (and highest-priced) package first to anchor the client’s perception before showing lower-priced options.
• Charm Pricing: While less common for high-ticket consulting, ending prices in .99 can sometimes influence perception.
• Framing: Frame your price in terms of the value gained or loss avoided (e.g., “An investment of $X to protect against potential losses of $Y”).