What is the problem with consultants? What does "bill on value" mean?

W: What big mistakes do consultants make?
M: They charge by the hour. As a solo consultant you should only " bill on value" and you should only deal with an economic buyer—somebody who can write a check for you. Don’t deal with a middleman. I used to think that most consultants were undercapitalized and that was their big problem. What I know now is that the main problem is self-esteem. It doesn’t matter what their age, gender, or culture is. Most consultants do not see themselves as their clients’ peers, but as subordinates. They are submissive and they come to the job head in hand. If you want to make six figures, you can’t have that mentality.
W: What is the challenge through the self-employed?
M: Becoming self-employed as a consultant aggravates the problem most people have. When you work in a company, someone else can be the front man and you can hide and just poke your hand out when you have something you feel strong about it. When you rode on your own, the poor self-esteem issues rise to the surface and one third of people don’t have good support systems among their spouses and friends. Instead of encouraging them, these people are saying: Go back to work. You are never going to make it on your own.
W: What do you mean by "bill on value"?
M: Get an agreement with the buyer on objectives and metrics. If you are going to help save the company a million dollars or improve their market position by 2.5 million dollars, you can get a 10％ or better return, so you can make 100,000 or 250,000 dollars for those jobs. When you are talking to the right buyers, they don’t blink these figures. Don’t deal with a trainer or a HR person. Deal with the person who was authorized to spend that money.