Q & A Table of Contents
Getting Clients To Tell The Truth About Their Budgets
From: Jakob, Stockholm, Sweden
Question: Frequently my firm is doing consultancy jobs for smaller companies - start-ups if you like. On several occasions I meet an approach from the customers saying that 'we can only afford to pay a certain amount ...' This might not necessarily be untrue, but most often I perceive their comments as a tactical game.
Typically the amount they 'can afford' is slightly or considerably less than what I would like to suggest. I do not always find questioning their internal calculus for coming up with this figure as appropriate. Sometimes, after negotiations, I redesign the project to fit the agreed amount. Naturally that yields the consequence that we do not deliver what otherwise would be possible. However, both the negotiation and our experience with them while doing our job usually shows that they might not be as constrained as they say they are.
What would you suggest as a good approach to meet the tactics of 'the limited amount of spending'?
Response: Your most appropriate approach is found within your question. If it is clear to you that a smaller fee yields less productivity on the part of your consulting firm, it is important to work with the client in the negotiation phase to learn what work product they hope you will produce. With this information, you can calculate how much it should cost them for you to accomplish each objective.
Once you have reached that point, you should develop a menu with prices for each possible achievement you can offer. Give them the opportunity to understand that each element of your work costs a certain amount to deliver.
There is another, simpler, point to make to clients: Top quality is not expensive; it is priceless. I don't know how to translate that into Swedish, but hope you can communicate the concept to these clients.
If your client hires your consultancy at a 'bargain' fee, as the work goes forward you can tell them, "After exposure to your company, we have identified other things with which we can help you. They include the following: (x, y, z) and each item, which may already have been on your menu, carries an additional cost.
Hope this helps,
Steve
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