Don't you hate it when someone asks, "What are your rates?" or "How much do you charge?" It especially bothers me when they ask it before I even know what they're trying to achieve or what their current status happens to be.
Recently a consultant asked me how to handle the above questions without being cagey or evasive. Since she never charges by the hour, but instead negotiates a project price once the parameters are well defined it was a particularly sticky issue for her.
Here were my suggestions ... and please feel free to add your ideas as well.
To be effective, you have to know how you'll deal with this situation before it occurs. Otherwise you'll stumble over your words and appear totally inept when it occurs — which is the last thing you want to happen.
Plus, you also need to transition back to questions as soon as you can. Why? By doing so, you:
- Get a better handle on business objectives.
- Can more clearly define the project parameters.
- Enhance your credibility with the decision maker.
- Begin establishing your relationship.
So the key is to not get stuck on the money issues. You see, many corporate decision makers find additional funding once they realize the value of what they're getting.
Here's how a dialogue on these tough questions might go. Don't let yourself get rattled. Always answer honestly with a calm, quiet confidence.
Client: "How much do you charge?"
You: "You and I work together to scope out the project needs in more detail so we know exactly what you want to achieve. Then I'll give you a proposal."
Client: "How much do you bill per hour?"
You: "I don’t charge by the hour. I charge by the project. It's a much better deal for you that way. You get a fixed price you can count on and put in your budget. Then, regardless of the amount of time it takes to get the work done, you'll know how much it cost.
Client: "Everyone else is quoting an hourly fee."
You: "Find out what the project costs from them. That's what's important."
Client: "We need to know how much it costs to see if you'll fit in the budget."
You: "If there's a finite amount in your budget, we'll figure out how to do the maximum amount with the money you have. For example:
- We may need to prioritize to determine what's most important to do first.
- Or, we can break the project down into phases so you can get started right away.
- If there's not enough for the whole project, we can do some this year and roll the rest into next year's budget.
- If you have some people internally who can do part of the work, we'll let them take it on to reduce the costs.
"There are so many ways we can tackle this. The most important thing though is to clearly understand what you're trying to achieve and figure out the best way to get there. You mentioned that one of the issues you were facing was ..."
(Now's the time to transition back to an issue that was briefly discussed early and focus on it in more depth. Typically this changes the dynamics and the price question evaporates until it's time for a proposal.)
But occasionally you're talking to a person who is insistent on an answer ...
Client: "We have to know how much you charge by the hour. That's how our organization works. We have to know that amount."
You: "I don't bill that way. Perhaps it's not a good fit and we shouldn't be working together."
(Yes, you need to sometimes be willing to walk away from projects.)
So how do you handle these always tough questions related to "How much do you charge?"
Please share your insights with us!