Do you have professionals on your team who have trouble asking for more – in scope, value, and fee?
In recent client sessions, I’ve been reminded several times just how difficult this really is for many. Most of these client firms are quite well run – with strong, focused, and talented leadership. Still, and as one client CEO puts it “we have a lot of smart people here, but some of them don’t know how to make a buck.” Technical talent, yes – but business acumen (and professional courage) – are different.
There are a number of issues – and mindset traps?–?beneath these too-often missed opportunities for higher fees.? Here are four we see as most important:?
- Friendship – The best clients are built through deeper relationships, and well beyond simple transactions. So, we search for those who share our beliefs, viewpoints, and style. We become friends, and these friendships lubricate the business of our business. Still, strong relationships are built on trust: honesty, candor, and care. It’s rarely easy, but real love also includes tough love. So, say what’s on your mind. Truly professional relationships require us (for the good of the client) to say what should be said –– even if they don’t want to hear it.
- Facilitation – Far too few professionals have had any real training and development in pricing strategy, fee negotiations, contracts pros and cons – or (for that matter) in storytelling, influence and persuasion, or conversational etiquette. Some are born with natural gifts here, but most of us can benefit from more training, mentoring, and hands-on practice on the job. Further, this effort can provide real differentiation and competitive advantage, and meaningful, bottom-line impact on business results. This is an area worth investing in – right now.
- Fear – Does your firm have a CFO – a “Chief Fee Officer?” Is there a voice in your organization (somewhere, anywhere) asking if “this fee is high enough?’ This might sound silly but consider this: there are many folks asking the opposite. Questions and comments abound, such as: “Are you sure we can win this?” or “How do we know this will work?” or “We need to get this job!” or “This could really get our foot in the door for much bigger projects!” or “Just this one time; we’ll catch up on the fee later ...” Sound familiar?? Humans are often irrationally risk averse, and organizations amplify this outsized fear of losing. Together we convince ourselves that “If we don’t do this, they’ll find someone else, and we’ll be out in the cold forever and ever. (Amen).” What most firms need, then, is a counterbalancing force and voice – the “Chief Fee Officer."
- ?Fairness – There is always tension in our fee negotiations. Rational clients desire the most they can get, and for the least amount they can pay. Providers want the opposite. Either party can, surely overdo it here - crossing the line into unhelpful, unproductive, and even unethical behavior. Price gouging is sometimes a real thing, just as is unlimited, unilateral customer power. Still, too many professionals see it as though higher fees always mean they’re ‘taking advantage of the client.’ Instead, the instinctive view should always be this: “at price point X we can provide this much value, but at price point Y we could also do this, and this, and this …”
If ethics (i.e., greed) is a real concern, then here are a few questions that can help:?
- Are we delivering what we promised, with quality and service as expected??
- Would a different client pay for this service, at this fee (with us or someone else)??
- Are we taking advantage of the client’s situation - in the current situation??
- Are we really different, distinctive, and worth it – and does the client agree?
With two decades of advising professional services firm leaders, and having led dozens and dozens of professional workshops, seminars, and conference gatherings, I cannot recall any instance where I thought that the client’s opportunity to raise their fees was inappropriate, unethical, or greedy. To the contrary, I have seen many instances of the opposite: a fee too low, leading to a substandard approach, insufficient level of effort, or critical lack of care that I thought unprofessional. Charging the appropriate fee [getting ‘the extra dime on a dollar’] is often, we think, not only fair – it’s frankly a duty of the professional.? For the good of the team, the firm, and the profession.
And finally - never forget that you’re not just in the ‘services business’ – but the ‘professional services business.’?
