After nearly three decades of communications consulting, I’ve found that competitive pricing is important to prospects but that’s not usually the primary reason they select one advisor over another. (They seek professional excellence, integrity, reliability and good working chemistry first, in my experience.) I have also learned that a poorly-time fee discussion or one introduced by a prospect out of the blue can smash the relationship before it begins.
Grace and control
I was at the table recently as content developer when an agency partner and a business owner were talking about how they could work together. The partner presented her agency’s credentials with just the right amount of brevity and passion, but I could tell the owner was in a rush to get to what was most important to him.
The owner didn’t miss a beat and said immediately, “I can see your agency is very good but, we’re on a tight budget. I need to know how much it’s going to cost me to get my sales up.”
The agency owner was taken aback, as she had never been asked to provide an estimate with no information to go on. She said, “Could we first discuss where you are with your business and where you want to be? Then, I can give you a sense of how we can help you and a general sense of how much it might cost.”
“Well, I’m in a bad place and I want to be in a good place,” came the business owner’s response. (I was beginning to think I was back in the days of “Mad Men.”)
Just then, the business owner took a call on his cell phone, which appeared from out of nowhere. The agency partner and I waited patiently. He was having a budget conversation with another would-be trusted advisor and it was going equally badly.
After his call, he sensed he could not extract “even a ballpark estimate” from the agency partner and suggested we adjourn and meet again. In the meantime, he would pull together some information that would help her build an estimate. The information never came and precious time was wasted, even though the business owner was referred to the agency by a long-time client.
Clearly, the above situation demonstrated how you need to handle the fee conversation with grace and most importantly, control when it comes up in a prospect meeting. Ideally, you should be the one to introduce the topic, never the prospect.
Why a premature conversation about fees can spoil everything
It is amazing how quickly an assertive prospect can commandeer the conversation with a premature focus on compensation. Prospects who obsess about your fees early on may be attempting to gain control of the conversation and, unfortunately the relationship before it even begins. Or, they don’t have the authority you thought they had and are merely gatekeepers with no decision-making power at all. Being led into a conversation about fees with a prospect too early in the conversation can be a sure-fire way to sabotage your subsequent efforts to win the business. That’s because when the prospect says, “That’s way over our budget” or, “You’re not even in the ballpark,” you can become stuck when searching for the ‘right’ response. How can you win a prospect’s trust when you are drawn into a negotiation with them about compensation before he or she even becomes a client? You run the risk of casting yourself as an adversary, not a collaborative advisor.
You may be tempted to defuse the situation by saying you share the cllent’s commitment to their business and that your knowledge, combined with your experience and commitment justifies your compensation. This is going from bad to worse as you debate your value, and I’ve seen it happen several times.
Get off to a better start this way
At the start of a more successful meeting with a prospect, the agency partner presented an agenda that included a description of how she would be compensated. (You can order the meeting agenda in any way you wish while ensuring the money conversation does not lead.)
Things were going very well and the prospect was obviously impressed by the agency’s work. He suddenly forgot about the agenda and asked how much “that campaign” had cost the client.
The agency partner said, “ I would be pleased to provide a general cost estimate for the work we can do for your business once I have an understanding of where you are with your business and where you want to be.”
To get the conversation back on an even footing, she went on to describe how her team worked with other clients to ensure the working relationship was a smooth one from the start.
She won the business but vowed that for the next prospect meeting, she would e-mail an agenda in advance. That way, the prospect would appreciate her planning in order to ensure maximum clarity and transparency. After all, isn’t that what every client wants?
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