George P from Charleston, SC. I have been charging 50% of the refund and 25% of first-year go-forward savings since I started 8 months ago. Landed 4 clients. But a prospect told me another auditor offered 30%. Lost the deal. Am I charging too much or did I lose to someone underpricing?
Charging 50% contingency — am I pricing myself out of the market
George, 50/25 is perfectly standard for a solo auditor doing quality work. The 30% auditor is either desperate for volume, cutting corners, or has scale to make thin margins work. Competing on price attracts price-sensitive clients who leave the moment someone cheaper appears. Competing on quality attracts clients who value thoroughness.
I charge 50% on refunds and never had trouble filling my calendar. My pitch: I take 100% of the risk. If I find nothing, you pay nothing. If I find $20,000, you get $10,000 you did not have yesterday. The 30% auditor might find less because they spend less time per account.
I started at 50% and dropped to 40% after my first year once I had case studies. The drop was not because clients demanded it — I was finding bigger errors and 40% of $50,000 is more than 50% of $20,000. As your skills improve, dollar amounts go up and you can afford a lower percentage while making more money.
Sarah, good perspective. My average finding has been about $8,000. If I get better at finding larger errors, the percentage matters less.
Data point: I have been doing this over a decade. I charge 40/20. My average engagement value is around $45,000 in total savings. At 40% my average fee is $18,000. A 30% auditor on the same account earns $13,500. But if the 30% auditor is less thorough and only finds $30,000 of the $45,000, his fee is $9,000 and the client misses $15,000 in savings. Cheap is not always better.
Slight pushback. There are legitimate reasons to charge less than 50%. For portfolio clients with 10+ accounts, per-account effort drops because you learn the tariff once. I charge 35% for portfolios and 45% for individual accounts. Portfolio work is more profitable per hour even at lower percentage.
Rachel, makes sense for portfolios. I do not have any yet though. When did you start landing those?
About 18 months in. A building manager client referred me to his boss at a property management company. The boss gave me 14 buildings at 35%. That one portfolio generates more annual fee revenue than my next 5 individual clients combined.
That is the goal. Build single-account practice at 50%, develop skills and case studies, then land portfolio deals at 35-40% where volume compensates. Thanks everyone.
Bottom line: your fee should reflect your value, not your competitor price. Never apologize for earning a fair fee on work that saves clients money they would never have recovered without you.