Let’s talk about how you can earn higher fees with every proposal that you put out.
Here’s are 4 keys to higher fees with your consulting proposals.
1. Raise Your Value Before Sending The Proposal
It doesn’t start with the proposal. It’s not even your approach to the proposal.
It’s all about the conversation you have before the proposal.
In your conversations, you want to be focused on some specific things, but keep in mind, and this is so critical that to earn higher fees is not about your proposal — it’s about everything that happens before the proposal.
Most consultant’s conversations with this clients, at this stage just, skate around the edges. They’ll ask one question and then the buyer will give them a response and they’ll move on to the next question. That’s not what you want to do.
In your conversation, what you want to be focused on is identifying the value. And then communicating the value. And the value is what your buyer cares about.
It’s not just about your methodology or process — none of that is what the buyer wants or what they truly care about.
If you’re having a really effective conversation, you should be asking questions that can help you to identify value and can help the buyer themselves identify what is really important, what is it going to be, the value of the outcome, the result, the ROI for them by working through this process together and by uncovering what happens if they don’t move forward and hire you.
What is the cost of inaction? How does it impact their employees, their organization, their shareholders, their community itself?
There’s many different aspects and areas that you want to explore. The key to this is to think about it like you have an onion and you have all these different kind of layers, so you want to start to peel back each layer — peel, peel, peel — because you want to go deeper and deeper right into the core.
Because this is where the value is. The value is not on the edges.
Most consultant’s conversations with this clients, at this stage just, skate around the edges. They’ll ask one question and then the buyer will give them a response and they’ll move on to the next question. That’s not what you want to do.
2. Go Deeper With Your Questions
What’s significantly more effective is to ask a question and then go deeper and ask another question about the same one, clarify more, go deeper, understand more.
Only then will you go and ask the question about a different area in the business, but then again, you go deeper and deeper.
Ask…
Why is that important to you?
What kind of impact will that have on your organization?
Will that impact look like in terms of dollars or percentage improvement?
How will your shareholders feel about that?
How do your employees feel about that?
We’re going deeper and deeper and deeper.
We’re not saying: what is your objective on the goal? OK, Greg, when do you want to do this?
No — you don’t want to go to the next step so quickly.
You want to go deeper because this is where the value lies and this is what will really help you to position your offerings and your fees in a way that the buyer will feel very comfortable and excited about saying yes.
3. Offer Different Options
Number three is to use options.
So as you get to a full engagement, not at the discovery stage, not at all with your initial offer, but when you go to a full engagement, you want to definitely have three options.
Option one, option two, option three, the value of which there’ll be greater value with each of the options, and your fee will go up with each option.
Having options will help you to earn more because buyer psychology — and I think a lot of people know this these days.
Just to kind of recap a little bit, when a buyer looks at this, most buyers won’t feel comfortable justifying going with the highest price option right out of the gate. Most also don’t want the cheapest option, so they feel more comfortable landing somewhere in the middle. But there’s also something called anchoring going on.
Anchoring when someone sees a price, let’s just say this here is 20,000, this is 28,000 and this is 64,000. If your initial offer was only 20,000, they have nothing else to compare it to.
If you said that your price was 28,000, the buyer will be thinking $28K. They might be thinking it’s expensive than everything is cheap and reasonable.
But when they see $64K, all of a sudden they’re anchoring the $28K to $64K and so now $24K looks significantly lower and more reasonable because they’re comparing it to $64k.
4. Anchor Your Pricing Options
I speak with a lot of consultants who hesitate around asking for higher fees. And so they start off always going lower and lower.
Now the problem when you go too low in your fees is that the buyer might say yes to them. Then you’ve won the project at lower fees, which doesn’t make you feel good, but the other big problem is that you might get price resistance even at your lower price, and so then what the buyer is going to do is try and push you down even more.
And so if you accept that you end up earning less then you want to — even less than where you started off.
So my recommendation in terms of what I’ve observed and this is what works best for most of the consultants is that you always want to start higher.
Most projects have more complexity that then you’re initially seeing on the surface. They might take a little bit longer and so start a little bit higher with your pricing. Here’s why.
First of all, there’s a good chance that the buyer will say yes if you’ve presented it properly and if you had the right kind of conversation, you’ve identified real value communicated. So they might say higher, so you’re even higher pricing, which is a big win for you. Of course, the buyer still is going to get really great results, so they’re happy with that.
That’s a positive ROI for them, but if they say yes right off the bat, then it’s a big win.
The worst case scenario is they come back and they said your fees are a little bit too high, or that’s more than they were thinking. Now you’re still in a place where you can work with them to readjust the scope of the project.
It doesn’t mean that you’re just going to drop your fee and do the same amount of work you’re proposing rather that you might remove some elements of the work that you’re proposing and then the price will come down in line with that.
Still, you get a win at a higher level with doing a little bit less work. Whereas if you start off with a lower fee level, then it’s very hard to go to get the buyer to go up and pay more.
But if you start higher, it’s much easier to find a common ground and to come down a little bit in a way that still works for you and for the buyer.
Summary
If you want to earn higher fees in all your proposals and earn significantly more with every project you take on, number one: it’s everything that happens before the proposal.
Number two, focus your conversations on really identifying and communicating the value that the buyer cares about.
Number three, implement options when you get to the full engagement, a section or part of the project, and not just another discovery.
I’m not talking about your initial offering that gets your foot in the door, but after that to turn into a larger, fuller engagement, use options — and then number four, start higher.
Always give a price that’s a little bit higher than what you might even feel comfortable with as long as you can justifying connect it to the ROI that you’re going to be providing so that it’s still a great deal.
It’s a win-win for both parties.
Get Help With Your Consulting Proposals (And More)
If you’re looking for some resources to help you both with proposals and consulting fees, check out our resources on ConsultingSuccess.com.
We have a lot of resources that can help in those areas and if you’d like, help working on your proposals, guiding you through some of the best practices and help you to actually win more projects and have more meaningful conversations with clients — and ultimately grow your consulting revenues.
Reach out because we do offer a coaching program specifically for consultants to help you to achieve your goals. We’d be happy to chat with you about it to see if there might be a fit.