What to do when clients lowball your fees

Sooner or later, it happens to most consultants. They quote with confidence on a project and the client gets sticker shock. Often, it’s because the client has decided to compare your consulting fees to a salary.

For example, a senior consultant I know recently quoted a client for a project. The client came back and was stunned that the project cost about 75 percent more than they expected. They wanted to know if the consultant would drop the price to match their budget. They couldn’t believe the consultant was going to get paid so much for three weeks of work.

Well, there’s the problem. The consultant needed to shift the client’s focus away from the amount of time and instead to the value of the solution provided. It’s natural for clients to think about your work in terms of time. After all, they have the temptation to compare what you make to what they make. And if they see that you’re doing 3 weeks of work for $18,000, they may be tempted to calculate your rate to be $150 and get all huffy about how you’re making that, when they’re earning $25 or even $60 an hour for their salaried position.

And while my posts on both sticker shock and consulting and freelance rates  go into all the things you need to consider in setting your fee, getting into a lengthy discussion with the client about what your rate actually includes isn’t going to help.

The client doesn’t care how you came up with their rate. And while their ego may be a little bruised, they don’t really care what you make for doing your work, either.

They care about solving their problem in a way that provides a compelling return on investment for them.

I talk in much greater detail about how to package your solutions in Consulting Fees, but, right now, your take away should be that you need to shift the client’s focus back to what really matters. That’s how you make the magic happen.

Andrea Coutu says:

I recommend walking anytime there’s a mismatch that you can’t resolve.

Matt Beglinger says:

I seen this happen first hand. Do you believe there is ever a time when you should just walk away from a client if they are unwilling to pay you what you charge?

Andrea Coutu says:

Oh, for sure. Clients are always keeping an eye on those things.

every now and then, i get to encounter clients such as these… but i also believed that the fact that they’ve seen your work means (which i assumed from background checking) that they were eyeing on your work ethics and the quality you deliver. bargaining is fine and people will often pitch low, but if someone is sold to your results as observed from background checking, they’d come back when they can afford you… they may bargain still, but with a rate that you may possible consider.