Client Relationship Challenges and the Decision Maker

decision maker

If it weren’t challenging enough getting the sales lead to begin with as a decision maker, you may face any number of additional challenges during your sales process.

The more you are aware of them up front and address them as early as you can in the process, you will have more control over the situation than you would otherwise.

The Decision Maker

As much as you may know better, it can be easy to get caught up working with someone other than the decision maker longer than you should. What their decision making process is, who will be involved, and who the final decision maker is should be on your list of questions for the first conversation. When working with larger companies, it is common to work through most of the process with someone other than the decision-maker (for example, human resources). Get all of the information on the process that you can up-front, combine it with your experiences in similar situations, and decide whether this prospect fits your business model or not. Some executives know how to navigate larger companies, contracts, and processes well and are willing to take them on, depending on the size of the contracts. Others decide not to take on these clients unless they are immediately connected with the decision maker and the process is fairly straightforward.

Sometimes you are working through your referral source—an informal intermediary—rather than being quickly and directly connected with the client. You are now reliant on second-hand information and follow-up. In our experience, executives are most successful in these situations when they work with the intermediary sooner than later to establish a direct connection to the decision maker. Schedule time and brainstorm how to get you introduced as early as possible in the process. Usually, this is the case when the potential client has expressed frustration but isn’t quite ready to resolve the situation. Your referral source can forward something tangible, like an article you wrote, that is pertinent to the situation and suggest an introduction. Continue to follow up with the referral source/intermediary, but be careful not to provide too much secondhand information.

Client is Non-responsive to the Decision Maker

There are a number of reasons potential clients become non-responsive, from other priorities coming up to not wanting to make a decision to having made a decision and not having the courtesy to get back to you. If you have received no response after a few follow-ups, we have seen the following e-mail succeed:

“There is a fine line between being persistent and being a pest. In order to not cross the line into the latter, this will be my final follow-up. Please feel free to contact me when you are ready to reconnect.”

It is rare that executives don’t receive a response of some kind after sending this.

Budgets and Fee Structuring

Fees can easily be the most contentious part of forming a relationship and can make the client unresponsive. Keep focused on what the client is looking to accomplish, the expectations, and the budget. Contracts can be structured a number of ways beyond project, hourly, or daily bases.

Success Fees.

If the company’s budget is contingent on some financial return or success directly tied to your work, this fee structure can be a good alternative. Executives lower their base rate in return for a bigger upside when specific goals are reached. Outline the parameters and client expectations clearly, understand that some success is contingent on the client, and not everything is controllable. If you are willing to take a risk for a bigger upside, this could be a good option for you. Be sure the agreement contains assumptions and additional clauses to cover “in-the-event-of ” items. For example, in the event the client cancels the contract prior to an opportunity to achieve the success fee, then what? Some of the more popular success fee arrangements are:

  • Achieving X percent increase in sales or decrease in operating expenses
  • Connecting the company with X number of strategic partners—because the executive is typically using his or her own network, there is an added success fee for setting up these relationships
  • Preparing a company for sale—the executive receives a success fee of X percent of the increased value of the company based on the assumption the value increase is primarily due to the executive’s leadership and efforts

Sliding Fee Scale.

In line with the success fee strategy, this structure starts at a fee below what you would normally charge given the circumstances, then increases, based on deliverables, goals, or time, progressing to a rate slightly higher than you would have received otherwise. You assume more risk in this structure than the client in many cases. We suggest adding an extra clause to the contract stipulating that if the contract is terminated prior to the opportunity for increase, your normal rate would then be retroactive and due upon termination.

Deliverables-based Fees.

Some clients are very cautious regarding what value or deliverables they will receive for their investment. They likely have had a prior bad experience. This compensation structure is sometimes suggested by the client, but we rarely see it put into practice because trust needs to be a two-way street and most executives are not willing to take on most of the risk. Situations in which we typically see this fee structure are:

  • Executive gives extended terms of payment contingent on helping the client receive financing, secure a line of credit, or acquire X channel or strategic partners
  • Executive gives extended terms based on completion of deliverables

Retainers.

Some executives prefer being paid a month in advance and are willing to provide some flexibility with rates in these circumstances.

Reduced Work Week.

The client thinks they need someone five days a week; you know you can do the work in three, especially because you won’t be involved in office politics, the water cooler, or excessive meetings. You will be more focused and can deliver more value for the same budget. In this structure, be careful not to be perceived as “overqualified.” That may be interpreted as “too expensive; I don’t need to pay someone that much,” or “This executive won’t be hands-on enough.” Work through how you can make the same impact or more in less time. Provide examples of what you have accomplished in similar situations without being on-site full time. Story it!

When establishing your fees and payment schedule, don’t diminish the impact of when you invoice and when payments are due. The service you provide is not one that can be returned. Once you provide the work, particularly deliverables, they typically can’t be undone if the client doesn’t pay. This is why most consultants prefer to be paid prior to performing any work in a new client relationship. Conversely, the client is in a similar situation. They are typically very cautious about paying for something prior to work being performed and particularly before realizing any value from it. As we have already mentioned, trust is a two-way street; you decide what is right for you in each client relationship.

Scope and Schedule Creep

Many clients are so happy to finally talk to someone of your caliber and expertise that the more you two talk, the more open they are with problems, issues, or opportunities, and the scope begins to expand. Part of your role is to help focus discussions and help the client clarify and prioritize what needs to be accomplished. Help the client understand the flow of your process and that it is better to accomplish a few things than to fail at a lot of things. Challenges with focus and priorities are likely one of the reasons the client contacted you in the first place.

We’ve had more than one client call with an immediate need, asking how quickly an executive can get started. And yet two months later, we are still dealing with scheduling discussions, finalizing scope, significant delays in responsiveness, or start-date delays. Including timeline information in your initial discussion and recapping it in writing can help to serve as a basis for continual communication on this topic. For example, “In our first discussion, you mentioned wanting to have X, Y, and Z in place by the beginning of Q1. It is November 1, and it will take at least eight to ten weeks to accomplish this. Have your plans or priorities changed?” Often, going back to the initial intentions and asking the question can help.

Too Many Discussions and No Action by the Decision Maker

How many times have you met with a potential client, and three meetings later you feel like you are no closer to moving forward with a Statement of Work than you were at your first meeting? A number of the suggestions already mentioned can help avoid this. Use your intuition and common sense. You will quickly start to identify those clients who love to meet and have discussions with you but will likely never move forward with an engagement.

This is your business. You decide how much time you are willing to invest and why. You should stay in control and make this decision, not the client.

Keeping clear communication and not hesitating to ask the difficult questions will keep you further ahead in the process. Look at it as building a partnership with the client, not a sales process.

 

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