Do you have difficulty engaging in budget discussions for
new projects -- particularly during initial client meetings
when it can be tempting to make promises that might be
difficult to keep? If so, you're not alone! This article
explores five ways to help you gracefully avoid backing
yourself into a corner.
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It All Begins Innocently Enough...
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Imagine that you're meeting with prospective clients for
the first time. You're bubbling with anticipation about
launching a mutually rewarding working relationship that
will produce gratifying follow-on engagements.
You listen carefully as the clients explain the project
that requires your attention. At the end of the discussion,
you feel confident that you and your team can exceed their
expectations. With delight, you describe your ideas to your
clients, who appear thrilled with your concept and can't
wait to get started.
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But Moments Later, a Delicate Dance Begins...
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The clients mention having a limited budget. So limited, in
fact, that you have no idea of whether you and your team
can complete the project within the financial constraints.
Yet, on some level, you feel very committed to the outcome
you had just described moments before.
So, when the clients state that they just can't budge on
their budget, something inside of you whispers, "Well, why
not go for it anyway? If we know anything at all about what
we're doing, we should try to deliver it within their price
range!"
And, voila! With just those fleeting, partially conscious
thoughts, you succeed in backing yourself into a corner!
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Five Techniques for Reframing the "New Client" Scenario
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To reduce the likelihood of unintentionally agreeing to an
unrealistic arrangement, particularly when courting a new
client, below are five approaches that you can mix and
match to create a win-win situation. Having these ideas
prepared before you meet can help you smoothly and
gracefully handle these situations.
1) The "introductory package" offer.
Many businesses acquire new clients through introductory
packages of their products or services. This means that
they complete very specific chunks of work, such as
designing a logo or setting up a blog, at specially
discounted prices. Note that these discounts apply only to
certain services, and not necessarily to an entire project.
Benefits: Once your new clients have experienced a good
starting sample of your work and have come to know, like,
and trust you, they may be much more inclined to request
further assistance from you at your regular rates.
2) The "test sample" technique.
When it's really not clear how long an effort could take
because there are too many unknowns, you can offer to
produce a "test sample" of the work (such as editing one
chapter of a complete manuscript) to see what it entails
before committing to the entire project. To create the test
sample, you could propose working to a not-to-exceed price
(not necessarily at a discounted rate).
Benefits: This approach is especially useful when the
client's content, terminology, technology, and/or other
factors are new, dynamic, or otherwise difficult to gauge
without further exposure to the material.
After reviewing the completed sample with your client,
you'd be able to estimate the remainder of the project with
much more accuracy. The client also can determine whether
your style ideally suits the project.
3) The "level of effort" approach.
Sometimes a client might not have much funding up front,
but could finance a greater expenditure over time -- much
like a recurring "monthly allowance." In this case, you
could offer to do the work on a level-of-effort basis, not
to exceed a target number of hours per billing period (say,
10 hours per week).
Benefits: This approach tends to eliminate the need to
create a detailed estimate for each task to be performed.
It also keeps the flow of work relatively steady for you
and makes monthly expenses very predictable for your client.
4) The "range of options" alternative.
When describing a vision of how you can best serve your
client's needs, offer to propose multiple ways of achieving
the results. This communicates the message that you've
anticipated the possibility of working within some kind of
financial constraints.
In a subsequent presentation, spell out two or three ways
of achieving the outcome you had described, each with a
different price tag. In the least expensive approach, for
example, you might deliver certain elements over time, with
fewer features, or in a different format from the
"high-end" version.
Benefits: The low-end option might be perfectly suitable
for the client's needs, and yet the client could flexibly
choose another option if more funding became available.
5) The "share of results" method.
If a working budget is practically nonexistent, consider
whether accepting a share of the results (such as a
percentage of sales) would make sense. If you strike such
an agreement with your client, you can craft a written
understanding that reflects this approach.
Benefits: This technique can be quite lucrative in
situations where the shared results increase over time as
your client's business prospers from your work. It's
considered a type of "contingency financing" because the
results are contingent on your efforts. If you can afford
to offer your services this way, you all but eliminate the
financial risk for your client, yet you reap the benefits
when you do a good job.
In conclusion, it's not difficult to back ourselves into a
corner with unrealistic budget arrangements when we're
highly enthusiastic about a new client project. Using one
or more of the five reframing techniques, you and your
client can find an ideal approach that serves both sets of
needs with grace, dignity, and mutual gain.
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Adele Sommers, Ph.D. is the author of the award-winning
"Straight Talk on Boosting Business Performance" program.
She helps people "discover and recover" the profits their
businesses may be losing every day through overlooked
performance potential. To sign up for more free tips, visit
her site at http://LearnShareProsper.com
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