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When to Start Fee Discussions with Consulting Prospects

It’s the topic that everyone has on their mind, but is uncomfortable bringing up. The one you know will have to be raised at some point, and you’re shy about broaching it too early.

Male pattern baldness. Fees and pricing.

When is the right time to first broach fee or budget discussions with a prospective consulting client?

At the earliest, you could raise this sensitive subject before you ever meet a prospect or, at the latest, you could specify fees after you submit your proposal. That’s a wide range of possibilities!

For this article, let’s ignore two situations: 1) when the client’s strict contracting approach leaves you no choice on when to talk about budget or fees; and, 2) when your offering is productized and the pricing is published.

Instead, we’ll focus on the typical, non-RFP, high-ticket, custom consulting project.

Clients frequently cut to the chase, inquiring about your pricing about 15 seconds after they’ve described what they want.

You’re probably slower to the punch. As a consultant, you may be inclined to defer any mention of budgets, fees or pricing until after you’ve articulated every detail of your spectacularly compelling approach, and preemptively dismissed every major objection.

Once your prospect is swooning over your capabilities and credentials, he’ll pay whatever fees you suggest, right?

Uh, no. Clients jump in too early and consultants often wait too late.

The ideal time to broach the topic of budgets and fees is before you dive deep into the benefits of working with you and outline possible solutions.

In other words, initiate conversation around your prospect’s budget once he is fully, explicitly attuned to the value of solving his problem, and envisioning the rewards from a successful project.

Fees are not about the value of your services, they’re about the value of your prospect’s outcome!

You venture into the topic by leveraging the Parameters portion of the Context Discussion. You can ask, “Are there any budget parameters?” and, “What were you anticipating the fees to achieve your outcome would be” and, the heart attack question.

If your prospect’s budget is out of line with the project they’re envisioning, you can course correct—long before you’ve spent hours discussing detailed approaches or developing a comprehensive proposal.

You don’t conclude the fee discussion right away, of course. You’re in no position to determine fees yet; all you’ve done is started a discussion that you’ll continue later and conclude during post-proposal negotiations. During the negotiations phase, you can ease any remaining budget concerns and close your lucrative project.

When have you typically started talking about fees? What’s worked or failed for you? Please share below.


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15 Comments
  1. Derek Fields
    February 28, 2018 at 9:32 am Reply

    If you have established the value that the customer will receive from a successful project, why ask “What are the budget constraints?” If the client says, ‘I expect to generate $1M and, by the way, my budget is $1,000 – how does that sound?” you probably haven’t set up quite the right context. I might prefer to say, “It looks like you could see as much as a $1M ROI. Pretty good for spending just $250K with me to get you there.” If the client falls to the floor in a dead faint, you have a pretty good idea of your upper bound.

    • David A. Fields
      February 28, 2018 at 10:53 am Reply

      Great question, Derek, and a perfect setup to make a few points:

      1. The entire design of the Context Discussion sets up the client (and you) to better understand the true nature of their need for you and the value of bringing you in.
      2. Many consultants think that the value of their projects should be the only factor affecting a client’s evaluation of their fee. Unfortunately, that’s simply not reality. Clients look at the cost of other alternatives and, alas, their budget. If your client has a fixed budget of $1k, it doesn’t matter whether you’ve established the value of your project at $1 million or $10 million. That’s just not a good prospect and you can quickly move onto more promising prospects.
      3. You should definitely check out the “heart attack question” which is similar to where you were heading, but uses slightly different psychology to raise the prospect’s reference price.
      4. Thanks for sparking more discussion!

      • Reuben Swartz
        February 28, 2018 at 5:24 pm Reply

        Great article and great points. I like to think of pricing discussion based on Perceived Differential Value. In other words, it’s what value the clients perceives, relatives to alternatives, which could be a direct competitor, it could be the status quo, or it could be something else. It’s easy to fall into the trap of “you’re crazy to not spend $250K to make $1M”, but it’s important to consider, from the clients perspective, the other costs– employee time and opportunity costs, for example, and the risks involved.

        • David A. Fields
          March 1, 2018 at 8:20 am

          Well said. You’re 100% on the mark. As with all aspects of consulting, if we remain Right-Side Up in our pricing, we’ll come out ahead.

          For the purposes of setting fees, that means remembering that our fees are not about us or our project. The investment a client makes in a project is about them: the value of their outcome, and the value of anything else they could do with the resources we’re asking them to invest.

          Many thanks for underscoring that point, Reuben.

        • albert gravelle
          July 28, 2021 at 7:49 pm

          Great article. Still as a consultant wrestling with value, would love to ask what their budget is, prior to throwing a figure. Is that ever appropriate?

        • David A. Fields
          July 29, 2021 at 8:03 am

          Albert, asking about budget and testing for fee tolerance should always be part of your Discovery process. Those are standard parts of the Context Discussion. Test for fee tolerance using the Heart-Attack Question, which is outlined in this article. Thanks for posting your question!

  2. Elaine
    February 28, 2018 at 9:51 am Reply

    Hi David,

    I have a fee schedule on my website, it is general but it has hourly rates and some baseline project fees. And I give some general costs when we first talk (and refer them to the fee schedule if they haven’t seen it yet). This helps to “weed out” clients who only have $500 for a $5000 project, which saves both the client and myself lots of time and effort.

    • David A. Fields
      February 28, 2018 at 11:10 am Reply

      Thank you for sharing your approach, Elaine. While I’m not personally a fan of hourly rates for most consultants and most consulting projects, displaying fees up front is an excellent approach to pre-qualifying prospects, particularly for smaller projects and productized offerings.

      Generally, if you’re making your rates or fees public, you’ve also devoted some of your web content to explaining the benefits of working with you, and you’ve preemptively answered your prospects’ most likely questions.

  3. dan markovitz
    February 28, 2018 at 2:45 pm Reply

    As you know, I failed spectacularly with the heart attack question. I’d love to know what results others have had with that question, or if they’ve developed their own version.

    • David A. Fields
      March 1, 2018 at 8:15 am Reply

      Dan, mileage clearly varies and it’s important to find language that’s comfortable for you. While I could provide you with many examples of other consultants’ success with the heart attack question, my guess is you’d like to hear it from them.

      When we run the Script Bank program again and/or set it up permanent access, definitely join that–others submit their versions of scripts like the heart attack question, which you’ll find very useful.

      • Daniel Markovitz
        March 1, 2018 at 12:31 pm Reply

        I look forward to it!

  4. Loraine Huchler
    March 5, 2018 at 1:08 pm Reply

    Amen. Fees are not about the value of your services, they’re about the value of your prospect’s outcome!

    • David A. Fields
      March 5, 2018 at 1:26 pm Reply

      Indeed. That and, of course, their expectations. I’ll be talking about that more on tomorrow’s webinar for ACE (in case you’re available to attend.) Thanks for your “Amen” Loraine.

  5. George Palmer
    May 4, 2020 at 3:52 pm Reply

    I love your articles and usually agree with you, but I think this one is a notch away from the center.

    I think most consultants are just struggling to get the scope described, prior to the pricing discussion. Perhaps bigger firms and boutiques and the like, want to do some grand description of approach and the like. But I think most independents would eschew that sort of BD effort anyways.

    I’m absolutely fine to discuss (and do) price as soon as we’ve had a reasonable discussion of the scope: business problem and time for Q&A (probably 10 minutes+).

    Really, if the client is pushing for price, than it’s likely a good thing. At least it sounds like they want to buy. Often the biggest implicit competition is just “do without”.

    • David A. Fields
      May 5, 2020 at 9:53 pm Reply

      Disagreements and discussions are good, George! Where I’ll push back on your comment is here:

      Most consultants that are “struggling to get the scope described” are focused on the wrong thing anyway. They’re taking orders and, like their prospects, thinking about what the tasks are. That’s not the path to high-value, high-margin projects.

      Instead of spending ten minutes discussing the “scope,” redirect the conversation to the outcomes and benefits of the work. Then a conversation around fees can ensue. Before that it’s premature or a commodity pricing conversation.

      A client pushing on pricing from the get-go isn’t a good sign that they want to buy valuable consulting; it’s a warning sign they want cheap labor.

      I’m glad you posted the alternative point of view, George.

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