Forty Methods to Increase and/or Protect Fees

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Fees remain a topic of unending interest according to my mail, so here is a compilation of tips and ideas. Any two or three that you can use will probably increase your profits immediately.

  1. Establish value collaboratively with the client.
  2. Base fees on value, not on task.
  3. Never use time as the basis of your value.
  4. Don’t stop with what the client wants. Find out what the client needs.
  5. Think of the fourth sale first. Fees are cumulative, not situational.
  6. Engage the client in the diagnosis. Don’t be prescriptive.
  7. Never voluntarily offer options to reduce fees.
  8. Add a premium if you personally “do it all.”
  9. If you’re forced to consider fee reduction, reduce value first.
  10. Provide options every time: the choice of “yeses.”
  11. Always provide an option that is comprehensive and over-budget.
  12. As early as possible, ask the key scope question: “What are your objectives?”
  13. Broaden objectives as appropriate to increase value.
  14. Ensure that the client is aware of the full range of your services.
  15. If something is not on your playing field, subcontract.
  16. Always ask yourself, “Why me, why now, why in this manner?”
  17. Determine how many options the buyer perceives other than you.
  18. Use proposals as confirmations, not explorations.
  19. When asked prematurely about fees, reply, “I don’t know.”
  20. If you must lower fees, seek a quid pro quo from the buyer.
  21. Do not accept troublesome, unpleasant, or suspicious business.
  22. When collaborating or subcontracting, use objective apportionment.
  23. Any highly-paid employee must bring in new business, not merely deliver.
  24. Seek out new economic buyers laterally during your projects.
  25. It is better to do something pro bono than to do it for a low fee.
  26. Fees have nothing to do with supply and demand, only with value.
  27. If you are unaware of current market fee ranges, you’re undercharging.
  28. Psychologically, higher fees create higher value in the buyer’s mind.
  29. Value can include subjective as well as objective measures.
  30. Introduce new value to existing clients to raise fees in these accounts.
  31. Do not accept referral business on the same basis (e.g., hourly) as the source.
  32. When forced into phases, offer partial rebates to guarantee future business.
  33. At least every two years, consider jettisoning the bottom 15% of business.
  34. Start with payment terms maximally beneficial to you every time.
  35. Offer incentives for one-time, full payments.
  36. Never accept payment subject to conditions to be met upon completion.
  37. Focus on improvement, not problem solving.
  38. Provide proactive ideas, bench marking, best practices from experience.
  39. Practice stating and explaining your fees.
  40. Always be prepared to walk away from business.

Article reprinted with permission from Alan Weiss.
© 1996-2008 Summit Consulting Group, Inc. All rights reserved.

Alan Weiss

Alan Weiss is one of those rare people who can say he is a consultant, speaker and author and mean it. His consulting firm, Summit Consulting Group, Inc. has attracted clients such as Merck, Hewlett-Packard, GE, Mercedes-Benz, State Street Corporation, Times Mirror Group, The Federal Reserve, The New York Times, and over 400 other leading organizations. He serves on the boards of directors of the Trinity Repertory Company, a Tony-Award-winning New England regional theater, and the Newport International Film Festival. His speaking typically includes 30 keynotes a year at major conferences, and he has been a visiting faculty member at Case Western Reserve University, Boston College, Tufts, St. John's, the University of Illinois, the Institute of Management Studies, and the University of Georgia Graduate School of Business. He has held an appointment as adjunct professor in the Graduate School of Business at the University of Rhode Island where he taught courses on advanced management and consulting skills. He holds the record for selling out the highest priced workshop (on entrepreneurialism) in the 21-year history of New York City's Learning Annex. His Ph.D. is in psychology and he is a member of the American Psychological Society, the American Counseling Association, Division 13 of the American Psychological Association, and the Society for Personality and Social Psychology. He was recently appointed to the Board of Governors of Harvard University's Center for Mental Illness and the Media. He has keynoted for the American Psychological Association on two occasions...

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