To get the most value for your clients and your firm, you need to frame the information you have discovered from your clients in a proposal. So once you have established your discovery guidelines and questions to use, it's time to look at pricing and creating proposals that win business.
“The customer never buys a product. By definition the customer buys the satisfaction of a want. He buys value.” Peter Drucker, author and management consultant.
Now that you have some great information about your client/prospect from your discovery session, the next step is an internal review and analysis, with the key aim of helping you find the right price and create a tailored proposal.
Check your client selection criteria
Before you spend another minute contemplating the prospective work you may have on the table, it’s important to make sure this client/prospect fits your firm’s client selection criteria.
If you’re serious about implementing value pricing you’ll want to formalise this step and the next ones we suggest – creating a process will be a huge benefit in the long run.
Analyse the discovery information
To analyse the information from your discovery meeting effectively, create a set of questions your firm can use to help examine the discovery findings and determine.
- How this information will impact on and tailor your proposal.
- And (hopefully) how you’ll get the client signed up to a fixed price agreement (FPA).
Here are some questions/considerations you could use as-is or as a guide to create your own:
1. Discovery questions to ask yourself:
- Who is the client/prospect?
- Do you like them (be honest here!)?
- Who referred them to you? Why, do you think?
- What is the cost the client will incur by not resolving their issue(s)?
- Who is paying for the service?
- Are there any competitors? Who are they?
- Do you have access to your competitors pricing information?
- How profitable is the client’s company?
- How long have they been in business?
- Who was their previous firm and why are they changing?
- How sophisticated is the customer?
- Does the client add to the firm’s skills or markets?
2. Value-adding considerations:
Consider all of the value-adding products/services your firm offers that this client would be able to benefit from. For example, this could include:
- Strategic planning session
- Strategy review
- Strategy mapping
- Systems documentation
- Management control plan
- Functional accountability
- Tax planning
- Application implementation
- Receipt Bank
- Xero/QuickBooks or other cloud provider
- Year-end accounts and strategic review
- Organisational development
- Fixing finance functions
3. Pricing questions:
- Why you?
- Why now?
- Is this a competitive bid? Do you have access to the competitor’s service/pricing information?
- How much trust does this client have that you will deliver?
- How high is this work on the value curve?
- Are there potential on-sells?
- Do you know the lifetime value of this client based on the work landed? (If not, you should.)
- What’s the economic benefit to the client if their issue is resolved?
- At what price would the services be too expensive for your client to consider?
- At what price would the services be expensive, but your client would still buy?
- At what price would the services become inexpensive?
- At what price do the services become so inexpensive the client would question its value?
- What price would be the most acceptable price your client will pay?
- What costs can you afford to invest in at the target price and still earn an acceptable profit?
- What price do you want as a firm? Should you consider a 3-tiered pricing structure?
- Are you going to offer a payment plan? i.e. upfront, monthly, quarterly payment options.
4. Common needs questions:
- How will you help reduce this client’s risk?
- How will you help this client pay less tax now and in the long term?
- How will you help this client develop themselves personally?
- How will you help make this client feel in more control of their life and their business?
- How can you help your client get things done?
- How will you help this client grown their business and be more profitable?
- How will you remove surprises for your client?
- How will you help the client find more time for them?
- How will you help this client sell their business (when the time comes)?
- How will you help make their business more valuable?
Once you’ve analysed your client’s information and considered all of the products/services they’d benefit from (and why), you’re ready to create a proposal.
Creating a proposal
Now it’s time to get busy and create some service options for your client/prospect.
It’s a good idea to give the client a couple of options to choose from; three is a good number that we’ve seen work for hundreds of successful firm.
Consider Dan Ariely’s ‘Anchoring’ effect, or the power of offering options.
For example, if you go into Louis Vuitton you’ll inevitably find a handbag that is £40,000+ (yes, we are serious and yes, it’s true!). The purpose of this handbag and its price tag is to be an anchor, a high anchor. Then, you’ll start to notice all of the less expensive options and maybe even the cheapest handbag option (the low anchor). The purpose of the anchors is to set the high and low expectations of what a customer should spend at the store.
Given options, the customer probably won’t choose to pay for the $40k handbag, but they will probably purchase an option in the middle. And, incidentally, that’s exactly what Louis Vuitton hopes will happen.
This is the sort of methodology you should implement into to your proposal generation process.
When you offer a client options you are subtly changing their decision process from:
Should I hire this firm? →
How should I work with this firm?
This subtle shift is slight but extremely powerful. What you’re doing, in essence, is mentally blocking out the competition who, probably, have only offered one option. And that's how you take control of the conversation.
Your New Pricing Proposal Template
Once you have your discovery and propsal information prepared, it's time to present it to the client.
Download our free guide Pricing Your Cloud Services: Perfecting Value Pricing to create proposals that win business and add value for your clients and your firm.
The free guide includes:
- How to master pricing psychology
- The secret to structuring pricing tiers
- Writing tips for better proposals
Click here to download it now: