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When to tell the client how much you charge

2003 August 19
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by Malcolm Sleath

Mark is an accomplished professional who gets high satisfaction ratings from his clients, but hates to talk about fees. Half his problem is about knowing when to deal with the subject. If he talks about it first it sounds as if he is only interested in the client’s money; if he waits for the client to raise the subject, it seems as if he has been trying to avoid it. “When”, he asks, “is the right time to talk about fees?”

The important thing is to establish the real value of the service you will be delivering to the client before any discussion of fees takes place. So use your meeting to encourage the client to express the value in his or her own words. Until clients have thought about this, the only benchmarks they will use to decide your worth will be the wrong ones.

For example, they may compare your hourly rate unfavourably with their own, or the fixed fee you are proposing will be contrasted with what else they could spend the money on. You want your fee to be measured against an appropriate yardstick.

If you ask the client to talk about real value before the fee is on the table, it will sound as if you are interested in achieving their goals. Ask the same question after fees have been discussed and the client will feel you are trying to justify steep charges.

As responsible professionals, we tend to be preoccupied with what we are going to do and how we are going to do it, but in the early stages of a discussion these technical aspects of delivery are of little concern to the client. Anyway, once the client’s real need for the work has been expressed, you may need more time to think about what has to be done to ensure you can achieve the real objective.

So is the answer to have a meeting with the client, and then tell them how much the service will cost in a letter? On no account do that! As one consultant wisely put it, “The rule is to have no surprises in the proposal”. Always try to be in a position where you can look the client in the eye when you tell them how much it is going to cost.

If they look a bit shocked, you can always refer back to what they have told you about the true benefit they want to achieve, or the risk they are seeking to avoid. Remember, it may not be the fee itself that’s the problem. They may just be thinking about how they are going to explain it to someone else. That’s the time to tell them about the work required to make sure everything happens the way they want it to.