Recalling the old adage that free advice is worth what you pay for it, many internal consulting groups charge for their services to increase their perceived value and recover operating costs. Some cost-recovery schemes can get pretty complex, but group managers that charge usually aim to break even at the end of the year. One insurance company takes each consultant's salary, marks it up 50 percent to cover other company expenses and assumes that the person will bill 1,000 hours during the year. Some internal consulting groups charge nothing or deeply discount their rates to stimulate use of the group, particularly for areas of a corporation that are cash poor. Other groups work on fixed price, cost plus time and materials and value prices.
Some organizations vary the pricing method from job to job.
Ultimately, the price of your talent contributes in some way to the perceived value of your services. Launching and sustaining an effective and valued internal management group isn't easy. But by assessing your customers' needs, developing the competencies required to meet them and creating a sound marketing plan, you have a chance to paddle down a scenic river and even enjoy the trip. Bob Reck still canoes and is president and founder of Kendall Consulting Group and professor at Babson College. The lack of a clear strategy for a new consulting group will frustrate your staff and confuse your customers.