Eleven Ways to Attract Better Clients and Command Premium Fees

Executive Summary

Professionals are working harder than ever before. More and more billable hours no longer automatically equates to an ever-increasing standard of living. The best firms have discovered the secrets to acquiring top quality clients that will pay top-notch fees year after year. No matter what market you operate in, there are top quality clients. The good news is that there are always more of the A+ clients than you’ve ever thought there were. This white paper is about the sequential strategies, processes, and methodologies that you can use to attract more of those high quality clients and attract them at premium fees. When you attract high quality clients and command premium fees you can:

  • Put less time in at the office
  • Make more money
  • Work with interesting, challenging and appreciative clients
  • “Fire” fee-grinding clients and have less stress

Please enjoy this white paper and feel free to share it with your friends, colleagues, clients, and business associates. Here’s a pop quiz. Who makes more money? Is it the Lamborghini salesman or the Chevrolet salesman? You get the idea. This isn’t a special report about the automobile sales business, but it is about something that should be vital and close to your heart. Namely, it’s about why you want premium clients and how to get more of them. Why do you want and need premium clients? In a nutshell, A+ clients are easier to work with, more profitable, more loyal and dedicated to you, don’t grind you on fees, and are less frustrating to deal with. How do you attract more of these premium clients? Let’s take a look at eleven key ways to get you started.

1. Stop believing that your current rates are all that your target market will pay

Nothing seems to scare professionals more than the concept of raising their fees. The excuse list for not raising rates is endless. Here are just a few common ones:

  • My market can’t pay that
  • This is a depressed area
  • This is a small town
  • I’m selling a commodity
  • I’m just starting out
  • I’m too out of date
The real fact in most situations is this: You truly and honestly have no idea about the lifestyles of your clients, their true visions for their futures, and how much they will truly pay to attain a better future for themselves.[/blockquote] Please take heed and memorize this: When there is a perceived need and there is perceived value in satisfying that need, there is always enough money. When you raise your fees, you will lose some of your clients. The way you create a magnificent rose garden is by pulling out and killing the weeds. Not every living thing in your professional practice is a rose.

2. Learn how to create perceived value and you will be able to charge whatever you like

If you have nothing unique to offer, how can you expect others to value it highly? If you view yourself by your professional designation (e.g. I’m a CPA or I’m a patent attorney) you are immediately commoditizing yourself. If you describe yourself as a CPA when you’re asked what you do, what happens? You’ve immediately put yourself into a class of service providers numbering in the hundreds of thousands nationwide! When your prospective client opens the phone book and finds several hundred listings for CPAs, lawyers or consultants, how is your service valued in the client’s mind? Commoditization begins at home. So does the road out of commoditization. You are in charge of managing your client’s perception of your value. The fees that you charge and recover are not a function of what you think that your client can pay. They are a function of the value attached to your services by your client. The more your services contribute to helping your clients move closer to long range goals and values, the more they will value what you do and will pay accordingly.

3. Learn what your clients value most

Increasing your perceived value with clients requires that you form an understanding as to what their long term wants and desires entail. Without this understanding, you have set an artificial limit on your earning potential. Your maximum earning limit tends to be determined by:

The maximum number of billable hours possible in a year multiplied by the going rate in your industry, marketplace, geographic area for your type of service.
This theoretical limit may be a big number ($500,000 or $750,000 per year), but it’s still a limit. There isn’t much professional ingenuity in telling yourself that year after year you make more money by working more and more hours. Isn’t that plough horse mentality? You make more by pulling a heavier load? Doesn’t that lead to a heart attack eventually? You will collect far more in fees if you position yourself as a long-term value added partner. The only way to successfully do this is to locate people as clients who are looking for long-term value added partners. People who have long term vision, goals and values make the best clients. To find these clients you need to start having conversations about the client’s future dreams, hopes and aspirations Start asking your clients about these things and start building relationships with the people who have given the future some thought and who want to surround themselves with advisors and confidants who will help those dreams happen.

4. Learn to differentiate between clients who know the cost of things but who don’t understand the value of things versus those that care about the value of things

Your practice may differentiate between different types of clients in a lot of different ways. You may class them as A, B or C, or as big business and small business or as business versus personal clients. You may even use something more complex. In reality there are only two types of people that you will encounter on any given day. It doesn’t matter if they’re high-powered corporate executives. They are still people and these people will always come in one of two options. Here’s a simple illustration:

Wealthy business owners may have nice cars (they invested in their own image). They may have huge expensive homes (they invested in their family’s comfort). Consider when a business consultant says: “I can help you eliminate $2,000 per day in lost production costs. That’s $730,000 per year by streamlining three things in your manufacturing process. It’ll take about month for us to do it for you and it’ll cost you $230,000. When do you want to start?”.
You will most likely find one of following reactions to this sales pitch:

  • A. The value oriented client will immediately recognize that this problem is costing the company $730,000 per year and it’s smart to invest $230,000 to make this problem go away and to make it go away as fast as possible.
  • B. The cost driven client who knows the price of everything and the value of nothing will say; “Are you crazy? You want $230,000 for only one month of work? You’ve got to rethink your price here or I’ve got to get some other quotes on this.”

Yes, this is an oversimplification, but you can see that’s pretty much how things unfold in most day-to-day situations. Which client should you want to acquire and which client should you walk away from? Now for the big question, have you ever actually walked away from the fee grinder in scenario number two? If you aren’t prepared to walk away from them, how do you expect to improve your practice?

5. Learn that there are only three ways to raise your fees often, boldly, and without objection

As any type of service provider, you get hired to add value in one of three ways:

  • 1. You enable clients to add more bottom line profits than they would be able to add without your help and support.
  • 2. You enable clients to add bottom line profits sooner than they would be able to add without your help and support.
  • 3. You enable clients to add profits with greater certainty they would be able to add without your help and support. You remove uncertainty.

So your client’s basic questions are, How much? How soon? How certain can we be of the results? Once you can understand and answer these questions, you have the basis for determining fees based on results and not fees based on effort and time.

6. Learn to gather background information on the organization

Do you accept every referral that you receive as a new client? Do you assume your clients are telling you their full story? As professionals, we tend to value integrity and as such we tend to assume things that we are told as being true. Nothing can be as detrimental to your practice and its profits as assuming things to be true and real especially when they aren’t. By gathering information here, we don’t mean the usual stuff like nature of the business, types of customers, size etc. Find out how the business or the client has done business in the past. What kinds of advisors have they used in the past? Why did or didn’t things work out? What kinds of results are they trying to achieve from your work? What is the true financial health of the organization? What do the decision makers’ value? Do the decision makers look for long-term relationships? Has the organization remained loyal to service suppliers in the past? The list is virtually endless here, but there is a simple point. You’ll notice that you aren’t asking a lot about problems that you can actually solve at this stage. You’re looking for clients that want long-term relationships. Certain types of clients (in spite of what they will tell you) are simply incapable of forming long-term relationships. The vast bulk of your billings (and thus your profits) from the client don’t come in the first year. They come from the ongoing work that you do for them in years two thru seven. Why spend your time gathering preliminary information about the client’s problems and devising potential solutions when you are simply looking at a one shot deal? Good clients are like good marriage partners. Spend less time being a technical whiz and more time really finding out about the person that you’d like to spend the rest of your life with.

7. Ask about BIG problems

These aren’t hard to ascertain! Find out what’s keeping your clients awake at night. If absolutely nothing bothers them and nothing keeps them awake at night (especially in the areas of your service offering) why would they pay you anything but the least amount of money possible? Without big perceived problems, how can there be big perceived values received and hence large fees? Far too many professional service providers make the mistake of thinking that because problems may be important to the advisor, they are somehow automatically important to the client. Wrong! All kinds of people are behind on payments to the IRS. All kinds of people don’t care that they are behind. You tell them that they should care, but they don’t. Can you collect big money from these clients for the solution you provide? No. And, you never will. You incorrectly assumed that they care about what you care about. Find people with BIG problems that they care about and that you can solve. When clients have big problems that they care about, they will pay the fees to solve it.

8. Determine what your clients outcome based objectives are.

Now you’re starting to look at actual solutions for the client. Never propose solutions to clients without determining how the client measures your success or failure as an advisor. Also find out how they will measure your progress. Ask about qualitative and quantitative factors. Determine what the client’s outcome based objectives are. 

Quantitative Measures • Increased Profits • Increased Sales • Reduce client attrition rates • Reduce staff turnover rates • Increase response to advertising  
Qualitative Concepts • Improved image of the CEO • Better teamwork • Clients better served • Better corporate image • Increased job satisfaction  
The point is this: an awful lot of what goes on in organizations is driven by things that cannot be measured. In a great many instances, it is those very things that become the most important to the people who make the important decisions there. Never ignore the human side of the interaction when offering your services. Here’s a simple example. Are you married? Why are you married? Why do you have children? Answer those questions for yourself in your own life. You can’t measure any of them, but they are certainly the things you value most in life.

9. Determine the need for speed.

Expensive problems with expensive solutions are usually ones that need to get fixed quickly. If your client (even after all of your discussions) doesn’t feel a sense of urgency then one of two things has happened:

  • 1. You haven’t accurately analyzed and conveyed the importance of the problem.
  • 2. You have accurately conveyed the problem but the client simply doesn’t care.

If number one is your problem, then invest in some good sales training. If number two is the problem, then walk away from the client. Throughout the whole process that we have discussed so far, you should be learning one thing, learn when to say no and walk away from bad clients and bad business. Saying no requires a rigid set of rules and criteria that you apply to each new potential client situation. If you can’t satisfy all of your criteria then the chances are very slim you’ll be able to collect superior fees.

10. Determine, based on all of the above, where you are going to fit on the marketing continuum.

There are four ways to view the marketing of complex services:

  • 1. If you charge for undifferentiated stuff, you’re in the commodity business.
  • 2. If you charge for activities that you perform, you’re in the marginal service business.
  • 3. If you charge for the feeling clients have when they engage you, then you’re in the experience business.
  • 4. If you charge for the benefit that your clients receive as a result of your input, you are in the transformation business.

If you’re only selling tax returns, then you’re probably in the commodity or service business. It’s not very exciting and certainly not very lucrative. You do get to put in a lot of long hours as consolation though. If you can offer your clients an experience (Starbucks is an experience) or you can offer them transformation (McKinsey is in the transformation business) you get to charge the highest fees in your category and in your market. If you can’t find enough points from your initial talks with the client to offer them a “Wow!” or a transformation, how will you ever collect premium fees? Offer them an experience or transformation or be ready to walk away.

11. Give a “Wow” presentation.

Based on all of the above work, assuming you have determined that you can give the client real value added, transformational results, and that their values align nicely with yours — now what? Now is the time to put your best face forward. Image and perception is EVERYTHING. How do you normally give client presentations after all of the above investigative work has been done? If you’re like most professionals, you get lazy at this point. It’s human nature. You’ve developed rapport with the client. You think they’re your friends. You let your hair down. This is the wrong approach if you want to command premium fees. Commanding and collecting premium fees depends on your being perceived as the obvious expert of choice in your field. You can’t do this with second-rate image building and enhancement materials. Remember, second-rate image equals second-rate client perception. Second-rate client perception equals commoditized fees. What should you do? Make sure everything about you and your firm is first class including:

  • Your printed discussion materials
  • Your collateral materials
  • Your clothes

Everything you leave with the client from visual impressions to printed documents has to be top notch. Ask yourself this: Can I really expect to collect three or four times the industry standard rate for my work if I’m trying to save fifty bucks on my suit, ten bucks on my stationery or a few bucks for proper presentation folders?

Conclusion

The best firms have methodically designed and documented procedures to address every step outlined above. Only you can answer the following questions for yourself.

  • Have you methodically thought through your entire marketing and sales process?
  • Have you methodically thought through your entire image and client perception process?
  • Do you think truly premium fees happen by accident?
  • Has your practice been an accident so far?

Superior fees come from superior business processes on your part. Everything has to fit together in a logical sequence from the point of deciding who makes a good prospect for your firm, through information discovery, through sales and closing. We trust this paper has given you some food for thought.