Assessments Today

Question from a Reader: Price markup

You suggested a mark-up of about 100 – 150% on assessments. Is this still true when pricing 360-degree feedback?

I have to say that this simple little question ended up taking me on a whole different track. Why? To begin with, the 360 degree feedback assessment processes is far more involved – in preparation, administration, debriefing and overall skill required.

A simple answer to this question is "YES". Take the actual wholesale cost to you of the instrument (include all costs) and mark it up 100-150%. Simple Right? Wrong. The trick is to price your service or package including the assessment. As coaches, we generally don't offer an assessment to a client by itself. We want to be able to help our clients understand the information and use it as a leverage to get the results they want.

Pricing your retail cost is not too difficult – pricing the service is. You need to build in how much of your time and value added there will be in the process. The final price should include: the retail cost as you have determined, the cost of your time for whatever debriefing process you feel is necessary and the cost of action planning sessions - if that is what you want to offer.

What makes 360-degree assessments entirely another species? Although all of the issues remain similar, the complexity is exponential. Bottom line – you REALLY need to know what you are doing. The odds of doing damage to the client are far greater than with a simple behavioral type of instrument. Having a basic of the following is, in my view, mandatory:

~ understanding of competencies and performance management
~ statistics for dummies (basic principles and analysis)
~ ability to conduct structured interviewing
~ practice in questioning techniques
~ if customizing, experience in survey design
~ sound project management skills

If you are fully competent and experienced in delivering 360 degree feedback to your clients, this is a truly value added piece and you may want to consider how you have valued your time and costing structure in the first place. Don't get caught up in mark-up issues. Figure out the real time and effort and value that you provide and price the whole process accordingly. In my experience, any full 360 degree assessment (even the less expensive ones) can not be done properly (including a debriefing session(s) but not action planning) for much under $1,500.

Don't let that put you off entirely. Start with a simple assessment that might have some multi-rater capability to get your feet wet. We think our flagship product, The Platinum Rule, is
perfect for this. At Assessments Now, we have partnered with a couple of others who know this area well and can help you get started if you are convinced that this is the way for you.

Case Study -€“ Culture and Compency Change

Case Study 2 - Changing Demands and Competencies

 You have been working with John for about four months. His goals have been clearly around moving up in his company – he is the Assistant Branch Manager of a mid sized bank. In the past, John had completed the MBTI and you originally worked through his results. You yourself are not trained in MBTI but you did want to know what it all meant to him. John reports out and agrees that he is an ISTJ.

He comes with a new issue he wants to work on. John has just attended a manager’s retreat where they were told that the future competencies of Branch Managers will include stronger interpersonal skills, commitment to service and inspiring leadership abilities. John isn’t sure what this means to him and is beginning to wonder where his strengths could best be utilized. He is feeling rather stressed out. You were wondering if this might be a good time to introduce an assessment.

Questions for comments:

1. What considerations would you have?
2. Which assessments would you offer and why?
3. How would you introduce the concept of taking an assessment?

Personality Tests: Back With a Vengeance

From:   November 2004 Fast Company By: Alison Overholt

Truth is, these tests come in and out of fashion, and right now they're back with a vengeance. They gained their greatest power in the 1950s as a means to create homogenized bureaucracies filled with carbon copies of the most industrious employees. (William H. Whyte famously skewered this approach in his 1956 management classic, The Organization Man, even including an appendix on how to cheat the tests. Rule No. 1: "When asked for word associations or comments about the world, give the most conventional, run-of-the-mill, pedestrian answer possible.") By the 1990s, though, how could anyone make a case for describing the ideal "type" of employee, when everything in the business culture was about creativity, innovation, and individuality?

Today's tests attempt to meld the 1950s' desire for the perfect employee with the 1990s belief in the individual. They incorporate some advances in academic personality research and have been made gender and race neutral. So what do you do when faced with one? And just what is a company looking for? To find out, I indulged my addiction once again.

An interesting article - even if a couple of years old.  Unfortunately,  the MBTI is refered to as test, but many assessment users (not MBTI qualified I note) tend to use the work test indescriminately.   

Ten Reasons to Offer Assessments

By Roberta Hill

Given the ongoing backlash against assessments, I've been wondering lately if using them is really viable. I am the first to acknowledge the problems associated with the misuse of every type of instrument—from hiring to self development. I also accept the legitimate concerns about the validity of any and all self-rating assessments. Despite the concerns and apprehensions expressed by some coaches, I remain convinced that when used appropriately, by properly trained practitioners, an assessment can provide clients with valuable information and insights. In keeping with coaches' love of 'Top Ten' lists, here are the reasons I believe it's worthwhile to have an assessment to offer your business clients:

1. Everyone is doing it. This may seem like a pretty lame reason, but selecting either a very common or a very unique assessment may help set you apart from other coaches. Using different tools and instruments helps to differentiate you from your competition. Availability of assessment tools may either be part of your unique selling proposition or an added service.
   
2. Sometimes a client wants to use an assessment, and may even have a specific one in mind. You personally can't possibly be certified in every assessment that is on the market—it would require extensive training and monetary investments that you probably don't want to make. However, you can set up relationships with other coaches who offer interesting and specialized instruments. Partnering and/or networking with someone who offers such a service may help you develop that new client relationship.
   
3. An assessment is a tangible product. It is very hard to 'sell' coaching, because quantifying its specific benefits is often difficult. An assessment that produces a report helps clients feel that they are getting something 'real' right away.
   
4. Providing service packages can generate more income—especially if you subcontract some of the work to others. Including an assessment as part of a coaching program allows you to sell a complete service. Selling your time is a limiting option; you only have so many hours in a day and can only charge so much per hour. A package or a program which includes items such as assessments that other coaches don't offer allows you to charge more for your services.
   
5. Despite common assumptions to the contrary, assessments are NOT a significant revenue generator. Prices and margins are dropping drastically and, no matter how user-friendly the administration system is, it still takes time to set up and follow up. However, in addition to allowing you to offer a coaching package, an assessment may leverage other business. I can't tell you how often I have been asked to use various paper versions of both the MBTI and DISC in workshops. Use of these tools has generated a number of coaching and facilitation clients (and vice versa).
   
6. While an assessment differentiates you from other coaches, having certifications, particularly in a specific assessment, can bring you credibility. Those purchasing coaching services, particularly if they are in the Finance or Human Resources Departments, expect to see some form of legitimate qualifications. Certification in an assessment can confirm your expertise.
   
7. The topic of assessments itself opens up discussions. People either love them or hate them, and thus everyone seems to have a very strong opinion on the subject. So if you don't feel a need to defend the use of assessments and can weather the criticism heaped upon them, I promise that you will have lots of interesting conversations. Listen and agree, and you will find that people will begin to see you as an expert on the subject, and they will become curious about what you offer.
   
8. If we are not careful, it is easy to begin to accept what our clients say at face value. To avoid being co-opted by your client, some form of neutral input is desirable. Most assessments are self-rating, but if someone isn't deliberately trying to 'beat the system,' some interesting data might present itself. This is particularly true if you are able to use a 360- or multi-rater assessment that provides third-party observer input.
   
9. Sex, Drugs and Rock and Roll. OK, the kind of assessments we are talking about have nothing to do with sex, drugs or rock and roll, not directly anyway, but I am always challenged by how to make a rather dry topic interesting!  (I also needed to come up with ten items ....)
   
10. Last but not least, I have acquired more self awareness through the study of certain 'personality' theories and models, then practiced what I have learned when using assessments with others. Working closely with a tool not only helps to make you more of an expert in that area—it also forces you to look closely at yourself. What a wonderful way to remain a life-long learner!

Assessments have certainly been an added advantage in my business, but I offer a much wider scope of services than strictly coaching. Not everyone has similar experiences, and you must market your business. I would be remiss if I didn't provide you with the top five reasons NOT to use assessments:

1. Everyone is doing it. Clients will have already done a myriad of assessments, so why burden them with more? I strongly discourage coaches from automatically using an assessment. Check out a client's feelings about using such instruments, and ask them what they have taken in the past. If they remember their results, this is a great first step towards deciding whether or not they might benefit from doing another one.
   
2. 'Show me the money.' It will cost you both time and money to become properly trained to use any decent assessment tool. The well-established vendors with good support and research often require you to purchase a minimum number of assessments each year. Their goal is not to sell you product, but rather to make sure that you remain active and current in your assessment skills. If you don't have the volume to spend this kind of money, look for someone else who might administer your client's assessment for you.
   
3. Even if you do plan to use an assessment regularly, specific assessments seem to go in and out of favor. While investing to become certified in MBTI, I found that for a couple of years I didn't get any requests to do MBTI workshops. Then suddenly I got a half dozen in a single quarter. Assessments and specific instruments can certainly become a 'flavor of the month.'
   
4. People hire you not for the tricks in your tool box, but for you—your competencies and the relationship that you establish. You don't NEED an assessment to make you a better coach. Conversely, using an assessment won't make you a better coach. An assessment is just a tool.
   
5. Assessments are continually being misused and individuals continue to have bad experiences. Why fight an uphill battle to counteract all the negative press out there? Your time might be better spent asking provocative questions and engaging in active listening!

Copyright 2006 Roberta F. Hill, AssessmentsNow.com Used with permission.   This article first appeared in Business Coaching Worldwide (Issue 4, 2006).

What Assessment Would You Recommend? Introducing the Book

I couldn't help but find a way to add this here - it is so funny.  The reason we need trainers and coaches is age old: