“How many times have I heard this!” said the managing partner of an accountancy firm I met with recently. On reflection I said to him “this is what is constantly being said to me when discussing business development with many accountancy firms, and not just yours, over the last 12 months!”
The conversation then focused on why this was and what could be done by fee-earners in accountancy firms and indeed professional services firms to overcome this apparent hurdle.
Well, just maybe, prospective clients don’t always see the benefits they are being offered by way of the service to be provided; or, could it be that the adviser is not really communicating the benefit in an easily understood and articulate way? Does the prospective client see the real value and the return on the investment?
One point that needs to be front of mind for the adviser is answering this simple question – “What is the prospective client thinking about when looking at the price?”
One thing is for sure we all run scared of those immortal words – even more so when we knew they were coming.
Why do we always say that we lost on price when asked about the latest project we were bidding for? And when we win a project why do we not wait to be asked? Because we get too excited and can’t wait to tell every man, women and child that we got really close to the client and understood their requirements really well and managed to pull off a fantastic fee in the process?
So why are we too expensive when we lose and what is expensive anyway? Is it just a perception because the client did not understand the benefits in the offer, and what are we comparing our price and offer against?
Let’s try and answer some of these questions posed, because if we have really powerful solutions to avoid these questions being asked in the first place then those immortal words of ‘how much!?’ may indeed never be mentioned, and how comfortable would that make everyone feel?
Your (adviser) mindset
When anyone has to deal with fees in any profession there is always some trepidation. We seem to be running scared or worried with anticipation about what the potential client is going to retort. The answer is to be really positive and confident because if you do not see the value/benefits the client certainly will not. And if you have no confidence in the rates then the client certainly will not!
What we need to be asking ourselves internally is have we really understood the client requirements fully, and by that I don’t just mean have we read the ITT/RFP from top to tail, or have we had a quick chat on the telephone and a brief 30 minute meeting with the client?
Do we have the real confidence that we have fully understood the client’s needs and more importantly their wants? Do not go blaming anyone else here as we as advisers have to put in the ‘hard yards’ and spend time in the early stages of the process so we can walk into these fee discussions with the real confidence that we have an in depth knowledge of what is at the forefront of the clients mind and what we have offered and priced against meets those requirements to perfection.
We also need to ask ourselves if this is the right time to be talking fees? In my experience the only time to do this with any success is when the client is ready, you have fully understood them and they have confirmed to you that you have fully understood them.
The early key message for anyone involved in trying to understand the client is to focus on them and not yourself. You really have to get into their world and think like the client and answer those questions we asked at the start of the article before they can be asked.
What we are all guilty of from time to time is making assumptions based on our own thoughts; remember this is about the client and understanding their mindset.
The client will consider any offer first and foremost on the following key questions which they will be asking themselves:
- Do they really understand my/our requirements, needs and wants?
- What are the benefits for me?
- What will my ROI look like?
So why give them the opportunity to challenge, make sure these questions have been asked and answered during the early meetings when insight has been gained and information downloaded from the client.
They will also be asking questions like:
- How is this offer different from the others?
- Do I/we trust this person/company to deliver and advise?
Again, give reassurance through the earlier parts of the process by forming relationships based on core values of trust, by showing credibility, competence and compatibility.
Do not forget that we are dealing with very commercially astute people who are looking for the best deal and will invariably challenge on fees, and they will not be enjoying this process anymore than you.
Overcoming the mindset
The key points to remember are that this client was a target as they were on your dream client base for the future, so do the leg work and put the time in to understand them. When you have put lots of time and effort into campaigning to them they will really want to meet with you, with open arms and coffee cups and biscuits on the table!
They will already have a trusted adviser so you must have gained some respect/trust. You really put effort into listening to their requirements; you got under their skin and fully understood their needs and wants, so that when the offer was made it was benefit rich and feature poor?
Maybe if you asked them who they would really like to work with, then they would choose your firm over the competition.
Sounds like you have built a really good relationship, had lots of meetings and gained good insight into their requirements and provided a really good benefits offer and all you need to do is explain the “value of the difference”.
Now that’s not difficult as you have the relationship and trust, so be confident as you have done all the hard work through getting to this point. If negotiation on fee is really needed then remember the three “golden rules”:
- Make the client work – do not move easily and explain the benefits
- If you change the fee then change the offer too
- ‘Negotiate’ any movement using ‘if’ and ‘then’ so if they give something then you are in a position to alter the fee appropriately
Ultimately think “win/win” for both you and the client and don’t just relate the process to your own crusade for increased fees.
Read this article on AccountingWEB (registration may be required):
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