Obtain verbal approval before it is submitted, that is how you do it!
Some consultants almost pride themselves with the amount of proposals submitted and even have success ratios (sic) for those that they win. Here is a quick overview of how you get 100% approval of your proposals, you basically get it approved verbally, before you submit it in writing. Easy to do, right?
Well, there is a process that works! Mastering all the details of it and utilizing both the artistic and scientific aspects to making it happen, is what makes or breaks most consultants in this process.
What I am about to share is a very quick overview of how to do it. I will make it look simple here – not easy – and there is a lot of art and science that goes into preparing this situation, but here is the fast overview.
If you have done a good job of building a relationship with your client, where you are seen as the peer level trusted advisor, and you have asked lots of good questions, determined the main issues, problems and opportunities and then associated those issues with a metric value for working on these problems, then, at some point, there comes a time, for every client and consultant to talk about fees.
Many consultants avoid this step in the process by simply not discussing this with the client and, instead, they write a proposal. They do this for various reasons. Some think this is the standard way. Conventional wisdom is their lord and master.
Some may know this is not optimal, but are unaware of a better way. Still, others, simply are afraid to have this conversation for fear of rejection in person.
While many others have not done a good job of understanding the client’s needs and have not done a good job of building a relationship with the client and keep their distance in the process, then submit a proposal and hope for the best.
Once received, the client will almost immediately skip all the introductory words, scope details and go straight to the back page and see the bottom line request for fees. As the client is turning through the pages, he is most likely saying to himself “what is this going to cost me”.
This is a huge positioning and practical mistake for the consultant!
At the same time, once the consultant has submitted the proposal, he is waiting for a response. He is usually wondering if the proposal will get accepted? He is usually thinking did I price too high, will they react negatively to it? Or, he could be thinking, did I price it too low, will I have left too much on the table and if I priced it too low, will they think less of me?
What a process! Can you see how that is not the best way? Most consultants undercharge for the value and benefits they provide and don’t know how to precondition nor to get preapproval for their fees, before it is ever formally submitted.
This situation requires another conversation, focused on the ROI for the client for the work to be done and the results to be achieved.
The key factors in this process of obtaining verbal approval from the decision maker are as follows:
- Both the consultant and decision maker – say, the CEO – know the monetized value of all the problems, issues and opportunities that you and the CEO have discussed
- Choose an amount for your fees that is between five to 15% of that number, yielding an ROI somewhere between seven to 20 times for the client investment
- Bring up the discussion as part of a review of the opportunities, frame it in terms of an investment in their business – people, structure, strategy production – and the future bottom line results of the company
- Then ask the CEO to “wrap himself around the investment of six to 12 months (or whatever amount of time the project scope would last) and that it would taken investment in the range of $100,000 to $150,000 (or whatever amount you choose, within 5-15% of the dollarized value and because you actually want a number of $125,000).
- After sharing your fees with the CEO, watch his facial expression and body language. Listen for his comments.
This is desensitising the client for the fees question and bracketing the potential range of the fees to reduce the blind last page of the proposal shocker. If you have done your work right, you have set this up for success and the CEO will accept these fees on the basis of the ROI that he is planning to receive and the trusted advisor role you have now been positioned yourself into.
This simple, not easy … never confuse the two. Making a six inch putt on the final hole of the final day of The Golf Open is also simple, not easy. In fact in can take a lifetime of learning. Or you can decide to learn how from the vital few who do it everytime.
In finalizing the proposal, you are now in position to write the formal proposal. You now have a verbal agreement for a range of fees that he has accepted. Now you can follow up with a written proposal, that has an amount which falls inside of the range he has already agreed to, for example $125,000 if you gave a range of $100,000 to $150,000.
Thus, since he has already accepted this range, in his discussion with you, then you have a high degree of confidence that this proposal will be accepted, when it is priced in the middle range.
This is how you get 100% acceptance of your proposals, because you already know CEO has ‘bought off’ – agreed in principle – on the range of fees you have already preconditioned him to accept.