I'll be honest, when I set up this business over 15 years ago, we didn't have that many clients.
Though we were fortunate enough to have a couple of large clients who kept us busy.
Like any other service-based business, these big clients would brief us on a project and ask for a quote.
You could always tell when they expected the project to be quick and simple, when in fact, it never was.
Negotiating with a client you can't afford to lose
I remember one particular project where the client expected us to come in at around £8000 to complete it.
In actual fact, I knew that this project would end up being closer to £20,000 because - as with most projects - there were certain elements that were complicated and required a considerable amount of resource to be invested in to it.
So I found myself wondering: right, well how are we going to get past this?
They were one of our biggest clients at the time, so I certainly didn't want to risk rubbing them up the wrong way.
But equally, I understood the importance of making a profit on the project.
So instead of caving, quoting the £8,000 that the client was expecting and making a whacking great loss; I opened up the Fee Estimator in CMap.
I've always used the Fee Estimator's Costing Breakdown feature in this type of situation because I need the client to see everything that's involved in completing the project.
So I use CMap to generate my cost breakdown and then offer to sit down with clients to talk them through the fee.
9 times out of 10, this works.
Because when the client can actually visualise all of the things you need to do, the amount of time & resource you're investing in to the project and so forth, they understand how you've reached the figure you're presenting to them.
So, going back to my £8,000 vs £20,000 dilemma; I visited the client, sat down with them and talked them through the fee, providing them with a detailed cost breakdown for the project.
Straight away, they realised there was a lot more to the project than they'd originally thought. And guess what?
The project went ahead at £20,000; over double what they were expecting, without a grumble.
By communicating clearly with the client and offering some clarity in to how the numbers added up on my end, I managed to keep one of my largest clients happy and get the fee I needed to ensure that project made a profit.
So the moral of the story is this:
Just sending across a number and it isn’t a good idea.
The client needs to know how you've arrived at that figure.
If you're quoting a steep (but justified) fee, and you know your client is expecting a cheaper rate, you don't need to crumble at the first hurdle.
- Be clear about what they're getting
- Communicate what you’re doing to deliver that service and
- Explain how you've arrived at the figure you're quoting via a detailed breakdown.
You'll be amazed at the difference this simple change can make.
If you'd like to dig deeper into project profitability, download yourself a copy of our free guide below: