Mike: Alan, I’d like to talk about consulting proposals for a minute. Should consultants always offer their clients options and packages in their proposals versus giving them just one package or one solution?
Alan: You need to offer options on everything. Even when somebody says we need to speak again, I would say, “Fine, I can do it tomorrow in person here, or we could do it outside if you prefer to have lunch or breakfast, or if you can give me an hour uninterrupted on the phone we could do it that way in the next week.” If you give people options you shift them from “Should I do this?” to “How should I do this?” and psychologically that’s huge.
Mike: Do you use any guidelines for what types of options consultants should provide their clients with?
If you give people options you shift them from “Should I do this?” to “How should I do this?”
Alan: It depends on the situation. It depends on the client. Otherwise, if you go in with predetermined gold, silver, platinum, or diamond or whatever, what you’re saying is I’ve got an off the shelf response here and I’m going to try to fit you into one of them. I’m talking about consulting here. Consulting should always be around what the clients’ needs are.
Mike: You might use a framework of three different offers but each one would be tailored to that specific client and project?
Alan: That’s right. Each proposal is different.
Mike: Why should a consultant never quote a fee before establishing value?
Alan: What is it based on? How would you quote a fee if you don’t have the value? You don’t even know what the fee is based on then.
Mike: Let’s look at an example. A consultant goes into a meeting with a client. The client says to them, “I want you to put on a seminar for us next week on sales for our sales force, how much will that cost?” That’s a tough position for a consultant to be in…when they feel they need to respond right away. What would you suggest they do?
Alan: The consultant is only cornered because they allowed themselves to be. What you just said is I need you to put on a seminar for me. That’s the client telling you what to do. Why do they need a seminar? Seminars are terrible in terms of application. Seminars can work in terms of exchanging skills and building business skills but they’re terrible in application on the job. I would never talk to a client about skills improvement and simply leave it with a seminar.
Mike: What would you have done in that situation?
Alan: I’d say, “I don’t know. Why don’t we talk about what you’d like to achieve and then I’ll put a proposal together for you with some options.”
Mike: What does your proposal look like? Is it generally one page, two pages, ten pages, thirty pages?
Alan: Two and a half pages, because proposals are summations, not explorations. They are a summation of the conceptual agreement. The client has already agreed to the objectives, measures, and value. The only thing the client hasn’t seen are the options and the fees. You don’t need your resume. You don’t need all that other crap in there that people put in – you know, this is our staff and everything, I like to fly fish – because those are attempts to gain credibility, and that should have been done when you were meeting with the buyer and establishing a trusting relationship. A proposal should be about two and a half pages no matter how big it is.
Seminars can work in terms of exchanging skills and building skills but they’re terrible in application on the job.
Mike: This is all really great information. I think consultants will be nodding their heads in agreement that they should be using value based fees. But what about their existing clients? How can they convert them over to the structure?
Alan: Well, it’s difficult if you have educated them wrong. What I advise people is just take your highest potential clients – that is the clients who might make the most difference for you in terms of repeat business – and say to them, “I’ve introduced a new relationship with my new clients and you’ve been such a good client. I’d be remiss if I didn’t explore it with you. So if you want to continue to work as the old ways, we can. But let me tell you why this way is better.” And then you have to show them that it’s more valuable for them to go with you on a project fee.
Mike: Great advice. Is it ever a good idea for consultants to abandon business and fire clients?
Alan: Yeah. Every two years you should drop the bottom 15% of your business and always fire lousy clients. They suck up too much time and too much energy, and there’s only so much baggage you can carry, and if you’re carrying a lot of old baggage, it was good for you five or ten years ago but not now.
Mike: How do you decide whether a client is a good one or a bad one?
Alan: I ask myself if they’re providing a sizable profit, if they are providing learning, if I can use them as a laboratory, if I enjoy working with them, things like that.
If you dread hearing from them, they’re not a good client.
Mike: You have hundreds of testimonials from clients on your website. What’s your process for getting testimonials?
Alan: I ask for them all the time. Today you should be getting video testimonials as well.
Mike: Some consultants feel that asking for a testimonial is too aggressive or asking too much of their clients. What would you say to them?
Alan: I’d say build your self esteem up. It all goes back to the same issue. This is the marketing business and if you really feel you’re helping other people, then why on earth would you be remiss to ask for a reference or a referral or testimonial, if you really feel you’re helping? But they don’t believe they’re really helping. They think they’re lucky they got the money.
Next time we will share with you the final part (Part 4) of our interview with Alan Weiss. Alan talks about how he manages his time and is able to run such a successful business working just 20hrs a week. Look for it.