June 24, 2024

Presenting Fee Options Without Discounting Yourself

A single number invites a single reaction: too high or fine. Well-built options change the question from whether to buy to which version to buy.

Options give the client a choice

When a proposal shows one fee, the only lever is price. When it shows structured alternatives, the client can decide on scope, timing or level of support. That conversation is usually healthier for both sides. A good fee section reads as a conversation about what the client wants, and not as a price list handed across a table.

The aim is not to trick anyone. It is to reflect the fact that most engagements can be scoped in more than one reasonable way. Use the same table format across proposals, so reviewers learn to read it quickly.

Vary scope, not just price

A lower option should do less, not the same for less. Remove a deliverable, reduce the review depth or shift some work to the client's team. If you cut price without cutting scope, you teach the client that the first number was soft. Clients rarely want the cheapest option; they want to feel that the scope fits the problem, and options let them test that.

State clearly what each option includes and excludes. Ambiguity will come back as scope creep later. Set the assumptions in writing, including what the client must supply and when.

Two or three, not six

Too many options push the decision back onto the client and slow it down. Two or three cover most cases: a focused version, a recommended version and, where it makes sense, an extended version. Think of each option as a complete offer that you would be comfortable delivering, since some clients will choose the smallest.

Mark the one you recommend and explain why in a sentence. Clients usually welcome an informed view. Note which items are fixed and which are estimates, and what happens if the estimate proves too low.

Explain the fee basis

Fixed fee, time and materials, capped fees, retainers and success-based elements each shift risk differently. Say in plain language who carries the risk of overruns and what triggers a change. Clients dislike surprises more than they dislike high fees, so clarity about what triggers extra charges builds trust.

Check what rules apply to your profession before proposing certain contingent or performance-based structures. Some are limited in some services. Keep a partner-approved range for each service, so options are built inside it.

Keep the internal logic consistent

Options work only if the numbers behind them hold together. Agree on internal rates, staffing ratios and minimum margins, and check every option against them before it is sent. Partners should see the margin on each option before it goes out, and not discover it afterwards.

A standard fee table format helps reviewers spot errors quickly and helps clients compare like with like. Avoid discount language, and describe changes as a different scope instead.

Learn from what clients choose

Record which option each client picks and which they decline. Over time this shows whether your middle option is doing its job or whether clients always jump to the lowest. Small firms can do this with a spreadsheet, and larger firms can use their pricing tools.

Use those patterns in your next pricing review rather than relying on impressions from a few memorable deals. Review one or two closed deals a quarter against the original fee options.

Put the options on one page

Clients compare options best when they can see them side by side. A single table with rows for scope, timing, team and fee, and columns for each option, lets a busy reader see the differences at a glance.

Avoid long prose describing each choice. Use the table for the facts and a short paragraph for your recommendation and the reason. If the client has to hunt for the difference between two options, they may choose the cheaper one by default.

VIPMarketing Editorial