What Are You Leaving on the Table?

In a phone meeting with a client last week we discussed the renewal of her contract for a non-profit foundation. She was nervous because she wanted to raise her previous daily rate of $500 per day to $800 per day.

Ultimately, she did even better than that by understanding & practicing a few fundamentals of proposals and persuasion.

When I looked at her proposal, she had outlined in detail what shed be doing on five separate projects. But that was about it. I explained to her that she needed to outline the current situation and the client objectives first and also include the measure of success for each project.

I emphasized that she was not selling what she was doing, but the RESULTS she produced for the client. By letting her client know she understood their objectives on each project and assuring them what success would look like, the client would feel much more comfortable with her proposal.

Then we went on to discuss her pricing. We looked at her previous rate, what other competing consultants were charging and the ultimate value of her work. "It might be tricky," I told her "but perhaps we should look at value-pricing this instead of quoting a day rate. This way it wont look like youve increased your rate by 50 percent and you can let them know that you are charging for the results, not the hours."

Well she did it and it worked. The client was very happy with the proposal and when they asked how she arrived at the fee, my client said, "Well, I dont have a daily rate. This is based on the value of the project and the results."

So instead of getting her fee negotiated down, she actually left the meeting with a total fee that was a few thousand more than she had originally estimated.

The lesson? Start looking closely at how you set fees and seriously consider going the value-pricing route. It could put tens of thousands of dollars into your pocket this year.

Marketing Flashes - on pricing and proposals

Never give a prospective client a price on a project in a first meeting. Give yourself some time to think about it. When you quote too soon, youre likely to quote too low.

Do fast turnaround on proposals. Try to do them in one day. This is possible if you create a proposal template with the basic format where you only need to fill in the specific objectives, methodology and measures of success. It should take no more than two or three pages.

If clients ask if you can lower your fee for a project, never unilaterally reduce the fee unless they are willing to reduce the value of what they receive. People love to reduce fees but hate to reduce value. Hold your ground.

Give your clients a choice of yeses. When doing a proposal, dont give a choice between yes or no, do what most wedding photographers do, offer a basic, standard and deluxe package. Most people will choose the standard package. And theyll often upgrade to the deluxe.

Adding value to your services alters the perception of cost. A guarantee, extra information or services and access to valuable resources all make your services more valuable to the client while costing you little or nothing. In fact, its the extra value that will differentiate your services from others. Youre no longer a commodity.

About the Author

Robert Middleton of Action Plan Marketing works with professional service businesses to help them attract new clients. His web site is a valuable resource for anyone looking for effective marketing ideas.
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robmid@actionplan.com
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