I've been doing this for a year now and wondering what the going rate is for contingency fees. I've been charging 35% but lost a few potential clients to someone charging 25%. TVA territory here in Knoxville - wondering if I'm pricing myself out of the market. What are you all seeing in your areas?
Standard contingency percentages - what are you charging?
Terry - I'm at 30% here in Charlotte with Duke Energy. Used to be 35% but had to come down to stay competitive. The key is making sure your engagement agreement is bulletproof so you don't get stiffed when you find savings. I've learned that lesson the hard way twice already.
I charge 25% in Youngstown but only for clients over $50k annual usage. Below that I do flat fee because the percentage gets too small to be worth it. FirstEnergy territory is pretty competitive here. Make sure you have language about getting paid even if they implement the changes themselves after you identify them.
Down here in San Antonio with CPS Energy I can still get 35% but I include a lot more services in that - ongoing monitoring, rate change notifications, etc. Pure audit-only clients I charge 30%. The trick is positioning yourself as an ongoing partner, not just a one-time auditor.
I'm seeing 25-30% as pretty standard in Ameren Missouri territory. But I always include a minimum fee clause - $2500 minimum even if the percentage comes out lower. Protects you on smaller accounts and weeds out tire kickers.
CL&P territory here in Hartford - I charge 30% with a $5000 minimum. The minimum is crucial because you'll spend the same amount of time on a $20k account as a $50k account usually. Also make sure you define what constitutes "savings" very clearly in your agreement.
Thanks everyone - sounds like I need to come down to 30% but add some minimum fee language. Derek, what kind of language do you use for the self-implementation clause? I had a client find $18k in savings through my audit then implement it themselves and tried to stiff me.
Terry I'll PM you my engagement agreement template. The key phrase is "whether implemented by Client or recommended by Consultant" - covers you either way. Also include language that savings are calculated from the date of identification, not implementation.