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The Perfect Response to the Fee Objection

You’ve completed your discovery process with your consulting prospect, gained agreement to your Context Document and submitted a killer proposal for a high-value consulting project. One that should, by all rights, be irresistible. Money in the bank.

The morning for your proposal review arrives and your prospect’s first words are, “I love your proposal, but the fees are way too high. I don’t have this much budgeted.” What’s the perfect response?holding-article-fees-high

This scenario is irritatingly common for all consultants. It’s also one of the questions in my eight-point, Same Rain Bigger Drops diagnostic, so if you’ve heard it before and know the answer, consider this article confirmation of your negotiating savvy.

Before I reveal the perfect rejoinder, I’d like you to take a moment and write down your response. Yeah, I know you’re not really going to, so at least take a moment and think of your reply to the fee objection. While you’re doing that, I’ll tell you a brief story.

One balmy, summer Sunday, I happened upon a tag sale and was drawn in by the display of flotsam. Amidst the usual assortment of Barbie dolls, chipped plates and stinky clothes lay an electric pole saw. For those unacquainted with this device, I use a pole saw to lop off tree branches in a futile attempt to shut down the squirrel discotheque located next to my chimney.

The tag on the pole saw read $20, an excellent price which I was happy to pay. When I approached the homeowner with my find, he anticipated my objection (though I had none) and said, “It’s $20, but that’s negotiable… how about $15?” My look of surprise must have been misinterpreted as a look of skepticism because, without missing a beat, he continued, “I’d take $10 for it… how about $5?” Worst. Negotiator. Ever.

holding-pole-saw

I think we can agree that Saw-man’s approach, was not the perfect response. But now you’ve had a moment to compose your response to the fee objection. What was it?

Common responses tend to be some tactful, more cleverly worded versions of…

The Insta-Trade: “Okay, what would you like to take out from the scope?”

The Justification: “Perhaps I was unclear on the value of this project. Shall we review it?”

The Appeal to Reason: “This fee gives you a 10-to-1 ROI.”

The Bad Cop: “Are you out of your mind? This fee is totally reasonable.”

The Good Cop: “Can you tell me more about the budget concern?”

The Bribe: “What if I throw in a case of Manischewitz? Or Robitussen? Same thing, really.”

Of those common responses, the Good Cop is the best; however, it’s far from perfect. The perfect response is actually the same one you should employ regardless of your prospect’s objection. It is…

The Strategic Delay:

“Got it. You have a concern about fees. What else?”

The Strategic Delay serves multiple purposes: First, it prevents you from becoming defensive, which is the natural-but-wholly-unhelpful stance we often fall into during negotiations. “What else” provides you time to take deep breaths and consider how you want to handle fees if, in fact, the concern persists.

Second, the Strategic Delay allows you to gather the entire lineup of your prospect’s objections. I’ve found that clients rarely need every objection to be met and sometimes the fee objection stems from habit or policy.

what-else-rangers-tickets

In some cases, acquiescing to minor requests may be sufficient to win the project. In other cases, the client may be so appreciative of you managing a more substantial concern (“Yes, we can include Albuquerque in the project”) that the fee objection is dropped.

The Strategic Delay is a ticket to higher close rates, happier clients and a better income.

Which response did you use the last time you heard the fee objection? Are you willing to try the Strategic Delay? Please share your experiences and thoughts below.


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26 Comments
  1. Ken Steiger
    June 22, 2016 at 7:32 am Reply

    I like this, a lot, David. It keeps the prospect talking, rather than putting the pressure on me to respond with a less-than-effective utterance. The secondary benefit you list, that it gets ALL the objections on the table, might be the more important in the overall scheme of the negotiation, but managing to keep my mouth shut is certainly neck-and-neck! Thanks for your insights and to-the-point tips.

    • David A. Fields
      June 22, 2016 at 8:39 am Reply

      Ken, I think you’re absolutely right about the primary benefit of the Strategic Delay: getting us out of our own way. Often the best way to close a project is to not work so darn hard to sell it and, rather, to simply sit back and listen more.

  2. Kaihan Krippendorff
    June 22, 2016 at 8:22 am Reply

    This is very helpful. It brings more negotiation factors into play and so expands the focus from being exclusively about fees. I appreciate you giving us one response rather than a series of if-then options.

    • David A. Fields
      June 22, 2016 at 8:46 am Reply

      Exactly, Kaihan. In some ways, the more factors that are in play, the easier it is to direct the negotiations where they’re most advantageous to us. As for if-then options: perhaps if I was more clever, I could have developed one ‘o them 34-step flowcharts. But being a simple consultant, I just ask “What else?”

      Thanks for adding to the discussion today, Kaihan.

  3. Don Garvett
    June 22, 2016 at 11:46 am Reply

    Good discussion of options and trade-offs.

    What about breaking the project into phases with each new phase being triggered by client assessing the benefits of the just-completed phases?

    • David A. Fields
      June 22, 2016 at 12:30 pm Reply

      Don, your suggestion is definitely worth considering once you and the prospect reach the point of actually discussing fees. If you even need to go there. Sometimes the fee objection is just habit, with little weight behind it, and in those cases no direct response is needed at all.

      In general, phased projects can be a good way to win a project that’s too huge for the client to swallow in one gulp. The downside is you increase the risk of not winning the whole megillah, but the upside is you increase your odds of winning something! I appreciate you chiming in on this article.

      • Don Garvett
        June 22, 2016 at 9:50 pm Reply

        There is one other benefit I experienced. After developing a relationship via the phased approach, the client became amenable to accepting bigger projects without fee pushback based on the credibility established via successful results from the phased approach.

        • David A. Fields
          June 23, 2016 at 6:47 pm

          Absolutely, Don. Any time you’re paid to establish credibility inside a client is a good excuse to do the happy dance.

  4. Bill Bonney
    June 22, 2016 at 11:56 am Reply

    I don’t think getting all the potential objections on the table at once can be undervalued. Knowing what all of them are up front gives you a huge advantage. But I agree, the ability to not react to the “WAY” too high message is huge. It’s a standard anchoring technique, the customer set the anchor in your mind of “way too high.” If you start there, you’re going to be coming from that perspective and prone to come down too far (assuming you had negotiating room available). You have to get that issue out of your frontal lobe before resuming the negotiation and the best way to do that is to get the customer talking, have him or her fire all their ammo and then you can discover if they really have a concern with price or if they are just being good stewards of their company’s money.

    • David A. Fields
      June 22, 2016 at 12:19 pm Reply

      Get that anchor out of your frontal lobe. Now there’s a vivid image! You’re right, Bill. The extra time allows us to distance ourselves from any hidden limitations subtly introduced by our prospects. I love that notion. Thanks for adding it to the conversation.

  5. Debra
    June 22, 2016 at 2:07 pm Reply

    David, I like your suggestion, particularly for a new client. However, I have a client I’ve been working with for several years. They like working with me, the products I produce, and have given my many projects. But, almost every time we negotiate a new contract they raise the “fee objection” conversation…your fees are so high, would you consider lowering them, etc. Your tactic wouldn’t work with them, as they generally don’t have any other concerns to address and so no other factors come into play regarding the negotiations. Any suggestions?

    • David A. Fields
      June 22, 2016 at 2:33 pm Reply

      Debra, that’s a terrific case study. I recommend the Strategic Delay (a.k.a. “What else?”) even with long-time clients. You won’t know for sure that pricing is their only concern unless you ask, and I have yet to run into a client that objects to being understood better.

      The bigger point, though, is that when you’ve built a deep, trusting relationship with a client over many years and projects, you have far more freedom to deal with pricing concerns before they reach your proposal.

      Whenever I’m in a Context Discussion with a long-time client I simply ask them what budget they have in mind. We know each other, we’re partners, and there’s no point in trying to guess. If the number they say is unreasonably low, I’ll tell them and we’ll discuss it right then. Even if it’s fair, I may come in with an alternative that’s far higher if I believe it supports a better project for them.

      Great question. Thanks for asking!

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