The 'Zero In' Technique: How Top Consultants Negotiate Fees

Don't leave yourself or your prospective clients in the dark about what you charge. Update them on every step of the journey and avoid wasting time on projects which would never succeed.

Hi, I’m Rich. Welcome to my weekly newsletter where I share systems and frameworks for scaling your consulting practice from $0 to $1m+ in revenue.

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(This is an update of this post for my new subscribers)

Stop Trying To Guess The Maximum A Client Is Willing To Pay

I’ve noticed some of my coaching students struggle with what to charge and negotiating fees.

The standard approach is rooted in fear and anxiety for both the consultant and the client..

The consultant attempts to estimate the maximum amount a client is willing to pay.

Often, they haven’t mentioned a single figure until they send the proposal to the client.

The client doesn’t have the slightest idea about what to expect, and the consultant doesn’t have the slightest idea if the client has the money.

We should be past the point of guessing the maximum a client will pay.

This kind of mentality comes from an outdated world of in-person selling. A salesperson would ‘call’ on a prospective client in person. The prospect would express interest, and the salesperson would name the highest figure they dared and then be quiet because ‘whoever speaks first loses’.

This is not conducive to a healthy approach or client relationship.

Don’t Waste Time Chasing Clients Who Can’t Afford You

If you’re naming the highest figure you dare, the chance of you wasting your time or theirs is high.

This approach is riddled with problems. The most obvious is that you can waste everyone’s time.

You can go through a full discovery process with a prospect where you both get excited about the work - only to discover you weren’t remotely in the right ballpark on fees. That’s a waste of everyone’s time and will ensure they never refer you to others in the future.

The other problem is more ethical:

Should you charge the maximum a client is willing to pay?

Are you truly trying to extract as much money from the client as possible, regardless of the service's value? Is that what’s best for them (or you)?

People keep believing you’re ‘leaving money on the table’ if you’re not charging the absolute maximum a client is willing to pay, ignoring the simple fact that goods and services have a fair value.

Is your goal to take as much money from your clients as possible? Remember that higher fees entail higher expectations. And sometimes it’s better to charge less than the absolute maximum and build a longer-term relationship with a client.

Remember, your fees should reflect your strategy. If you’re not sure what to charge, you don’t have a ‘fee-setting’ problem; you often have a strategy problem.

Fortunately, there’s a better approach.

The ‘Zero In’ Technique

Begin with a broad range and then ‘zero in’ as you learn more.

A far better approach is to begin with a broad range and then, with each additional step of the discovery process, increasingly ‘zero in’ on the right fees.

This is illustrated in the diagram below.

Begin with a broad range and then ‘Zero In’ on the right amount as you define the problem, agree the solutions, etc…

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Phase One: List The Broad Range On Your Website

Trust me, everyone wants to have a rough idea of your fees before contacting you

You begin with a clear range that checks people are in the right ballpark. We do by listing a broad range on our ‘Contact Us’ page, for example.

We highlight broad fees and requirements for prospective clients on our contact us page.

If people contact us through another channel, I check that they’ve read our ‘contact us’ page first to know if we’re compatible. This filters out many people who wouldn’t be the right match for us.

While it’s possible we might be able to help an organisation increase its budget for our services, in practice, it can be tricky. We would rather lose out on these projects than hit 1 in 10.

A good question is, why do we give a maximum and a minimum on this page?

Wouldn’t a maximum potentially leave money on the table from client projects where they would have been happy to pay more?

Possibly, but the bigger danger is anchoring visitors to the minimum figure and surprising them later. A range makes the ballpark easier to understand.

If you don’t do this, at least give your broad range early so clients know what they’re working within.

And if you’re not sure what your fee should be, use this guide to help you.

Your pricing tiers should match your strategy. What kind of clients are you targeting and with which kind of services?

Phase Two: Clearly Defined Problem

Once you’ve clearly defined the problem, update your broad range

After the first discussion or two, we should have a clear idea of the scope and our possible approach to solving the client’s problem(s). This would enable us to update our likely range.

This matches the phases of the sales process (from our Proposal Mastery Course)

As you go through the journey, you should increasingly share updated estimates of your fee.

See: Defining The Scope Of Work

Once you’ve clearly defined the problem, you will already have some ideas of the solutions and be able to give a narrower estimate. At this stage, we typically aim to provide a range of $ 10,000 to $ 15,000 between the lowest and highest options.

Once again, we would like to make sure the client understands the figure and is satisfied with it before proceeding to the next phase.

This ensures the client is prepared for the final quote again.

Phase Three: Agreed Solution(s)

Now you know the possible solutions, give a more precise figure

In the third phase, you run different potential solutions past the client and collaborate to determine precisely what would work best in their situation.

Make sure you agree on the solution(s) to the problem you’re trying to solve.

Sometimes, there's more than one solution; other times, it’s just one solution, but you might customise it to your specific client.

See: Solution Design - The Art Of Crafting The Right Solutions To Client Problems

This process may require several iterations, and you will typically need to involve multiple stakeholders to ensure everyone agrees. However, once you agree on the solutions, you have a clearer idea of how much work each solution will entail and can provide a narrower range.

Phase Four: Create The Proposal

Give either a single fixed figure or options for working with you

The final phase is when you’ve put together the complete proposal.

Note: (get $200 off my Proposal Mastery this week using the discount code ‘july4’).

Often, we present a high-cost, mid-cost, and low-cost option within the desired range.

As part of this, you will have researched the solution's implications, determined its time frame, and created a detailed timeline.

In the proposal, you will give a specific figure or a range of options based on the potential solutions you’ve discussed.

Remember that proposals (or at least good proposals) take a long time to create. There’s a unique skill to it. Don’t waste time creating a proposal until you’re sure you’re aligned on the fees and scope of work.

A major part of this process is optimising the proposal to increase the conversion success rate, so both you and your client avoid wasting time on projects that never had any opportunity for success.

See: How To Sell Consultancy Services.

Save Time, Improve Success With The ‘Zero In’ Technique

Take a more open and transparent approach to setting fees

A quick summary of the above.

1. Open Range. When a client first approaches you, begin with a broad range to ensure you’re in the right ballpark.

2. Problem Definition. Once you’ve defined the problem, you can give an updated estimate to ensure the client has the resources you want.

3. Solution Agreement. Once you agree on the solutions, you can zero in further to avoid any final cost shock.

4. Proposal. Give a precise figure or a range of options.

One more key point here. If the prospect ever says they need to check with someone else to confirm the fee is okay, invite that person to a call with you. It’s always better to speak to them directly. Most importantly, don’t proceed to the next step until you receive confirmation on the figure from the previous step.

If you get this right, you shouldn’t have to hit the ‘send’ button and pray the client accepts your inflated fee. Instead, you will know they have already approved the estimate, and you can work on making sure the proposal is right for them.

Good luck

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