If you’re considering a career as a cost saving consultant, or you’ve recently stepped into this role, you’ve probably already discovered that the business side of consulting can feel just as complex as the work itself.
One of the hardest things to work out and understand when you first start consulting is how to charge for your consulting services. I’ll try to cover this in more detail later showing the various charging approaches, but for now I’d like to mention charging based on a share of the savings.
This pricing model has become increasingly popular in the cost saving consultant world, and I understand why it’s tempting. Quite simply what this means, is that rather than charge traditional consulting fees, perhaps based on the time or effort involved, the consultant is paid a proportion of the savings identified or achieved for the client.
Now on the surface, this seems like a real win-win. The consultant has the potential to earn much higher fees, and receives a fee commensurate with the results achieved. Whilst the client minimises their risk and investment, only paying for results achieved.
I’ve spoken with many professionals in this space, and the allure of percentage-based fees is something every cost saving consultant grapples with at some point. The promise of aligning your success directly with measurable client outcomes sounds ideal in theory.
Now there are some consulting firms that charge for most of their assignments in this way, but I avoid it like the plague. Here’s why:
- It’s hard to estimate the potential savings at the outset. You may end up being under rewarded, or conversely the client is faced with a huge bill that they refuse to pay. I’ve seen both happen more than once.
- You need to take great care in establishing and agreeing the current baseline of costs, against which savings will be measured. The client needs to ‘sign off’ on this.
- Then at the end of the project you need to go over the same process to agree the estimated savings or indeed the realised savings as they occur. Now it starts to get tricky…
- How will you determine whose initiative, work or ‘idea’ led to the savings being achieved? The client may claim that they were ‘working on that already’. Again, I have seen it happen.
- What if the client refuses to adopt some of your recommendations and therefore does not achieve the savings?
- And lastly, although any professional consultant would hopefully not do this, what if the consultant is driven more by maximising savings, and hence fees, rather than focussing on what is the best thing for the client? Again I have seen this happen in other organisations, where the ‘solution’ falls apart as it was merely the cheapest and not the most appropriate.
For any cost saving consultant building a sustainable practice, these pitfalls represent real threats to both your reputation and your client relationships. The administrative burden alone—tracking baselines, documenting changes, attributing savings—can consume time you’d rather spend delivering actual value.
So there’s a bit of food for thought. Don’t get carried away with the idea of making your fortune by charging a percentage of savings. Clients are not stupid and it can easily backfire on you.
If you’re serious about succeeding as a cost saving consultant, my advice is to focus on transparent, straightforward pricing that reflects your expertise and effort. Your clients will appreciate the clarity, and you’ll sleep better knowing your income isn’t tied to variables outside your control.
But before I move on from pricing entirely, it’s worth stepping back to consider what this role actually involves day-to-day, because understanding the scope of the work helps explain why straightforward pricing often makes more sense.
So, what does a cost consultant actually do?
A cost saving consultant helps organisations forecast, manage, and control their spending. But that description doesn’t really capture the day-to-day reality of the work.
Think of it this way: you’re part detective, part negotiator, and part financial therapist. You’re digging through procurement data, questioning why things have always been done a certain way, and sometimes telling clients things they don’t want to hear about their spending habits.
The work typically spans three phases. Early on, you’re doing feasibility studies and benchmarking—helping clients understand what things should cost before they commit to anything. Then you move into the nitty-gritty of evaluating suppliers, negotiating contracts, and finding ways to get the same value for less money. Finally, you’re monitoring actual spend against projections and making sure savings don’t evaporate over time.
When done well, cost saving consultants typically deliver 8-15% savings on overall budgets. That’s real money, and it’s why clients keep coming back.
Conclusion
At the end of the day, becoming a successful cost saving consultant isn’t about finding clever fee structures or chasing the biggest percentage of savings you can negotiate. It’s about building trust, delivering genuine value, and creating relationships that lead to repeat business and referrals.
The work itself is rewarding enough when you do it well. You don’t need complicated pricing arrangements on top of it. If you’re just starting out, my advice is to focus on doing excellent work for a fair price. In my experience, the consultants who build lasting practices are the ones who keep things straightforward and put their clients’ interests first.
The cost saving consultant space is competitive, but there’s plenty of room for professionals who combine genuine expertise with integrity. If that sounds like you, you’re already on the right track.