Strategies to Handle the Fee Conversation With Clients
Why do we charge a fee compared with taking a commission or receiving remuneration from the products and services we advise?
Some of us have been forced to by our regulator, it provides a regular source of income, it creates committed and qualified clients and we have fewer conflict of interest discussions.
It enhances our image as a professional consultant and allows us to be treated alongside our peers in the profession. It permits you to be rewarded for the value you put in not just for the hours you toil, with fees the client values your advice more since they have put a monetary value on it and fees are demanded by clients who don't see you as a commodity or a product pusher and don't want any conflict of interest.
It's ethical and right - if handled correctly with the client - but occasionally advisor reticence can spoil the broth.
Why are we reticent then?
Many advisors are not, in fact my research shows that plenty of advisors are handling the issue of fees expertly, but some are not.
Much of it is nervousness about the value/fee relationship, caginess in case the client starts to negotiate or push back on your fee.
It's this procrastination to enter into a discussion about their fees at an early stage of the relationship that sours the trust and generates future wariness on the part of the advisor.
But much of it is in the head.
The Inner Game battle - Knowing Your Value
The Inner Game is a term which relates to what goes on inside our heads, our motivation, drive and state of mind when handling ourselves with clients.
The first step in mastering how to handle fees is to convince yourself that your fee is right, justified and a valid reward for the value you are to provide for your client. My research shows that some advisors have anxieties over their fee - they believe it's too much or too little and doesn't represent the value they provide.
The secret is to have confidence in the value you provide, to believe in this value yourself, to buy the value if you were in the market for the same.
In their book Competing on Value, Hanan and Karp talk about "knowing your value, price your value and sell your value".
Without putting any more gloss on the topic, that's the secret. If you believe in your value and service you provide, can articulate it clearly, then your fee is going to be received favourably and your client will not argue the case with you.
You need to believe in your value proposition and have this written down succinctly so that it distinguishes you perfectly from others in your profession.
So how can we verbalise our value proposition?
By Paul Archer
Image by Adam Borkowski
Paul is an international speaker, sales trainer, author and coach based in the UK. His expertise and experience is in selling and sales coaching, his books and articles focus on rapport selling which puts the customer at the heart of the sale. Visit his website http://www.archertraining.co.uk/Sales_tips.htm to sign up for his Weekly Sales and Coaching Tips or visit his blog at http://www.paularcher.com where you'll find his unique style of weekly blog posts for you to enjoy. firstname.lastname@example.org