What do you do when a prospective client or even a current client says that your fees seem too high?
This is often because you haven’t done a good enough job of explaining to your client the value that they will receive.
I’m not referring to touchy feely ‘value’ like customer service and high-quality mumbo jumbo; I’m talking about tangible value. Let’s dig into this…
Making Value Count
Experienced consultants often charge 10 times more than those new to consulting. This is partly due to the fact that they have more experience, but it’s also because they know how to justify value to their clients.
What you need to explain to your clients is what they will get out of your services. This all begins by asking the right questions.
Let me share a story with you…
I met with the President of an insurance company and after listening to their current situation I can see how I can help them. I tell the President my fees are $10,000 a month and that we usually start off with an agreement to work together for 4 months, but they can cancel at anytime if they are not satisfied. Hearing my fee, the president jumps back, looking at his eyes, I know he’s thinking … “$10K a month!!.”
Justifying Your Fee
To justify the value of my fee I may ask a prospective client (in this case the President of the insurance company) several questions.
From his answers I learn the key metrics in their business, like how much each client is worth to them and how many clients they bring in each month … in addition to other information that is valuable to know in this process.
By the end of the conversation I’ve showed the President how we will lower their costs and increase the number of new clients … which will give them an additional $32,500 each in sales and $22,500 in profit each month. The President is now more than happy to pay me the $10,000 a month fee.
Your fee becomes an investment rather than an expense. Applying this one strategy the right way can be the difference between you earning ‘an income’ as a consultant and earning ‘a great income’.