For a business owner, there is perhaps nothing more difficult than taking a pass on a business opportunity; in other words, leaving money on the table. {Exception: savvy business owners eliminate deadbeat clients—defined as clients who either are slow to pay, or are just difficult to work with, period.}
But we owners struggle with declining the business (and the clients that have the business!) that we’d very much LIKE to have.
Recently, a prospect came to me with a great request. We hammered out the scope of work and became mutually excited, only to subsequently become mutually deflated when we realize that we are not on the same page about the fee.
Now, there are at least two ways to build fees: 1. based upon its value in the marketplace and to the prospect, or 2. based upon the number of hours/resources it takes to complete the work. I suppose a third way would be a 3. hybrid between the two. In my case, while I do have an hourly rate that I consider, I also remain very aware of the value I’m providing for my clients, and do my best to determine my pricing based upon that value–which I think is fair for both sides.
Circling back to the recent prospect story…rather than a strategic marketing plan, a client feedback survey, or some other service that would require a deliverable, this was another type of opportunity: delivering a workshop at a company meeting. Delivering workshops happens to be one of my favorite things to do! So as you can imagine, I definitely wanted the business.
However, upon discussing the scope, we discovered towards the end of our conversation that the prospect had intended to pay about 50% of what I know in my heart is the value of the content and overall workshop experience (for forty attendees, by the way).
At that point, after getting pumped up and realizing that my workshop would offer their sales group a good deal of benefit with sticking power, we were both disappointed at the pricing discrepancy. I consider my prices to be fair; I’m not looking to gouge clients, not now and not ever (regardless of the state of economic health at any given time).
However, on principle, I felt that I could not possibly do the opposite of what I tell my clients: hold firm to what they believe is truly a fair price, and politely decline the business if a fair agreement cannot be reached.
As a side note, I firmly believe in flexibility when it comes to reducing a fee by altering the scope of work. No problem! But I am rarely willing (unless there is a powerful argument to do otherwise) to undercut my fee just to get the business. It’s not worth it; I’d rather not have the client, even if the opportunity would be great fun.
So we agreed that we would stay in touch, with the hope that at some point a Scarlett Consulting program would fit well into their budget. I’m very glad for the new connection, and I’m also glad to have maintained my own integrity in terms of getting fair compensation for the value my firm delivers. Take a look at your own negotiations with clients. Is your firm compensated fairly? Are you getting what you really deserve? And are your clients receiving the value you have promised?
