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How to Ensure Your Clients Happily Write Your Consulting Firm Big Checks
From:
David A. Fields -- Sales Growth Expert David A. Fields -- Sales Growth Expert
For Immediate Release:
Dateline: Ridgefield , CT
Wednesday, November 06, 2019

 

Your soft, consulting heart practically bursts when your client crows, “Investing with you was the smartest move we’ve made on our business.”

Woe are you, therefore, when your client begrudgingly, reluctantly scratches out a check to your consulting firm after you’ve delivered a monster-sized win for them.

Dratmuffins! What’s up with that negativity?

Feestructures, outcomes and expectations, that’s what’s up.

Elsewhere you can read about the basic fee structures and learn why the ideal fee structure for most consulting projects is a hybrid, fixed/success-fee engagement based on the value you’re providing. (There’s an excellent chapter on fee structures in this book.)

When you cross results with fee structure, though, your clients’ reactions may be more frustrating than cold, French onion soup.**

In reality,not every consulting project succeeds. In fact, studies suggest the majority ofconsulting projects miss the mark on timing, cost or desired outcomes.

Bad resultsi.e., your consulting firm’s work disappoints the client) lead to unhappyclients, regardless of the engagement’s fee structure.

Of course, your consulting firm usually delivers high-quality work that pleases your clients. And if your typical contract leverages fixed fees, then your happy clients grin goofily while distributing your payments.

However, evenif your consulting firm produces an excellent result and exceeds yourpromises, you may end up with a disgruntled client. Particularly if yourconsulting fees were based partially or entirely on success.

In otherwords, if you employ the optimal, hybrid contract structure, and yourconsulting team performs admirably, your client may still glare at you andgrumble under his breath while processing your final payment.

In the Resultsvs. Fee Structure chart, three out of four possibilities lead to potentiallyunhappy clients. Phooey on that.

WhyCan Good Results Produce Unhappy Clients, and What Should You Do?

Unfortunately,semi-rational notions of “fairness” taint many clients’ perceptions of yourconsulting firms’ fees.

Even if youprovably deliver $100 million in value and six pallets of strudel for yourclient, he may balk at writing you a $10 million check. (And have a stomachache.)

Why? Because, when an executive whose annual income comprises a small fraction of your consulting fees looks at your bursting, treasure chest of success fees, he instinctively feels like the fee-for-effort equation is out of balance.

Yes, you sold your project with a compelling message that your consulting firm only receives the treasure chest if you deliver massive value.

Unfortunately, along the course of the project, your client may forget your compelling, skin-in-the-game pitch. Ruh roh.

We need a new quadrant chart that compares Results to Fee Expectations.

Unsatisfactory consulting firm work still produces unhappy clients. However, a client’s level of misery deepens when you’re a Mugger popping out of dark shadows with disappointing news compared to when you’re a Dentist whose unfortunate message was expected.**

On the flip side, you’ll notice that when your consulting firm is exceeding expectations you can show up like a Wedding Crasher. Your “unexpected” request for your ginormous success fee steals the joy away from the successful project celebration.

Your client agreed to the fee structure, so is it fair for him to view you as a Wedding Crasher? Fairness is irrelevant. He’s aggravated when he should be delighted.

What youneed your consulting firm to be is the MVP. The super-star whose valueskyrockets in plain view.

When you’rean MVP, you earn large success fees and follow-on projects andreferrals.

The path to MVPis simple:

  1. Regularly update your consulting client on your project’s progress. “The project’s going great. I think we’re going to exceed the objectives!”
  2. Simultaneously remind your consulting client that he’s going to be forking over success fees. “I’m really looking forward to a massive payday for you and for us when we nail the objectives.”

Don’t beafraid of the fees you’re going to earn in a hybrid, success-fee project, anddon’t allow them to sneak up on your client either.

When youmanage your consulting clients’ expectations all along the way, you’re likelyto emerge as an MVP. And, as a quick reminder, MVPs earn the big, big bucks.

How does your consulting firm manage clients’ expectations?


 
Managing Director
Ascendant Consulting, LLC
Ridgefield, CT
203-438-7236