Many of you may recognise this scenario: just as you think the deal is almost closed, the prospective client asks for extra information or changes the brief. And how many of you have met the prospect who makes you run around in circles spelling out how problems can be solved – with no signed contract or payment in sight?
You will have spent hours, days or maybe weeks on the deal, only to be told you will not be hired. You might tell yourself that you came a good second, but the bottom line is that you gave everything away for free.
Free consulting is dangerous and costly for companies. It can create shaky foundations for young businesses, undermine larger firms and may lead to demise. By giving away too many services in the negotiation stage, or as loss leaders, you create a vicious circle where the more you do, the fewer resources you have to win new business. The less you win, the more you feel the need to give away free services.
Time is money, so always keep in mind the hours spent, the cost of this time and whether winning the prospect is worth the investment. Customers want the best, most suitable option for them but the best does not always equate to the cheapest. Your concern should be delivering the right service to your prospect, not whether you are offering the lowest price. Businesses do not do their reputation any favours by giving away services. By offering a service for free, you may even devalue your service.
In this economic climate, the relationship between buyer and seller is often stacked in favour of the buyer. It can become easy for a salesperson to panic that business will dry up or become worn down with the constant demand for cheaper and more. Be confident that you can offer excellence. Consultants who remind themselves that they give clients a great service are less inclined to offer bargain-basement prices. They understand the value of what they are doing, how it can enhance and grow a prospective client’s business and that their fee represents a valuable investment.
Remember, you are a business not a charity. You can decide not to offer free advice, and you must learn at what point to say No. Putting in place a process for knowing when to stop working with a prospect is vital.
It is important to distinguish time wasters from genuine prospects. Are potential customers driving down your price because they are trying to reduce the fee of a current supplier? Do they really have a budget, or do they simply want free information? Communicating with the person who holds the purse strings can help keep you focused.
By being ready to walk away from difficult prospects, you will take back control. The last thing a business should do is price services as low as possible and then over-deliver with free consulting. Have confidence and value your own time.