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It costs how much!?! Or why it pays to have the money conversation early

It costs how much!?! Or why it pays to have the money conversation early post image

Anyone running their own consultancy or marketing agency quickly learns to have ‘the money conversation’ early. This most valuable lesson is just one of many I picked up from Blair Enns, arguably our most influential business development thinker.

Let me tell you why you should talk with prospects about fees at an early stage:

  1. Stating a general range of fees focuses your prospect’s mind. He or she will quickly want to relate fees to outcomes. This is useful as it takes your relationship forward a big step and makes it more meaningful. If you are confident in your abilities and the fees you charge, you will have no problem making part of your payment subject to milestones or results.
  2. Discussing your likely charges weeds out tyre-kickers. Talking about the money is an important part of the qualification process. If a prospect balks at the kind of fees you are proposing then they are probably not the kind of client you want. I have saved a lot of time and energy by identifying poor prospects in this way.
  3. The money conversation supports your financial planning. Each agency or consultant is different of course, but no doubt you have in your mind an ideal number clients and the billing this generates. That is simply part of your forecasting. For example if you need twelve clients averaging £10k each, but your prospect’s budget is £2k, then at least you have a framework in which to decide whether to take the conversation further.
  4. A statement about fees puts down a marker about the value of your services. It states that you deserve some power in any relationship that develops. It says: “I know what I am worth. Now you know my expertise is valuable. I expect you to respect the skills that I can bring to your project.”

Not everyone is comfortable taking this approach but my own experience is that it works.

How do you open a discussion about charges or fees?
Please share any tips in the comments below.

I was lucky enough to meet Blair Enns at Vision Bristol 2010 and have written about him elsewhere. This year’s Vision Bristol runs 23-24 November.

{ 2 comments… add one }
  • Jaya Chakrabarti 06/09/2011, 4:10 pm

    lovely article. The money conversation brings the focus quickly onto the return that is expected. Projects are pieces of string till we know how much cloth we’re cutting. Managing expectations is all part of keeping the client happy.

  • Mick 07/09/2011, 8:09 am

    Thanks Jaya, I agree. Another thought: openness and honesty in business relationships generally means they’ll last longer and are more productive all round. Obvious, I know, but I’ve known a few people who got this wrong.

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