What To Charge? The How And Why

From the Mediation Matters Blog of Steve Mehta.

As you may know, I conducted a seminar on a 112 ways to succeed in your mediation practice recently and promised the participants that I would slowly place my tips on the blog. Well here is another one of the tips. Think hard about the price you charge.

Many people simply believe, “I will charge the lowest price and business will just flow in.” Unfortunately, that belief does not work. One reason is because of the reason determined in a study I cited in a prior post.

A recent study conducted by Francesca Gino at Carnegie Mellon University demonstrated that the fact that someone has paid for advice means it is more likely to be heeded. The study found that people are more likely to use advice that has been paid for than advice that’s free, even if there’s no difference in quality between the two sources.

Throughout the study, the participants took more account of advice they had paid for than advice they were given free, even though it was made clear to them that the advice was of the same quality. A final study by Gino showed the students took even more account of advice if it was made more expensive. In other words, the more that the person charged, the better the advice was accepted.

This study has enormous implications for pricing of mediation services. You need to evaluate your market and what other mediators are charging for their services. Find out what the top mediators in your field are charging. And then charge accordingly. In addition, try to find out what your particular market will bear. In some markets, if you charge more than $100/hr, you will be too high. In other markets, if you charge less than $300 you must be worthless.

When you understand what the top mediators charge, you can then decide how much less, if at all, you will charge. Too low and you will be the 99 Cents store of mediators. Too much and the clients will simply say, “for that much money, I could get the top tier mediator I have worked with before.”

Further, your price does not reflect your quality. It reflects the perception of your quality. There was a time when certain organizations had the “reduced price” panel of mediators. By advertising on those panels, you are only highlighting that you are desperate for business and are willing to discount your rates significantly.

At a certain point , the price can also help expectations. For example, there are mediators that charge $15,000 a day. When I hear of those mediators, I also hear comments from attorneys that, “at that price, you know he is going to get the case done.” In other words, the price can help people already start to believe that the case will get settled when it is in your hands.

Finally, don’t be afraid of the price you charge. Don’t be embarrassed or worried that you aren’t worth it. You are. If you don’t believe it, then certainly no one else will either.


Steve Mehta

Steven G. Mehta is an attorney and mediator providing unique mediation services in a variety of types of civil litigation. His ability to understand the human process and complex emotional issues involved in legal negotiations enables him to effectively assist the parties in obtaining the best possible results during mediation.… MORE >

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