How much should you charge? Part 3: The discovery process in depth
Last week we talked about the main things I do in a discovery meeting.
· Take the lead
· Educate the client
· Set expectations
The purpose of all of the above items is to make it easier for you to get all of the information you need so that you can figure out how long the project in question will take. That, in turn, will allow you to come up with an accurate quote.
But there are a few other things that a discovery process will help you with. Here’s what a good discovery meeting can do for you.
Impress the Lead
If you do everything suggested in this article series on discovery, your client can’t help but be impressed by how much you know, how prepared you are, how thorough you are etc.
Educate the Lead
By educating them, you not only help them make an informed buying decision, you also help them stack you up against the competition. And if you’ve done a good, thorough discovery process, the competition likely won’t stand a chance, because they probably won’t do such a process.
Remove Objections
During discovery, you want to address objections, preferably before the client even brings them up. For example, by educating them about all the many things you will be taking care of, they will be less likely to object to your price. Why? Because you have already shown why you are worth that much. For example, let’s say you are an e-learning course designer. A common objection might be that the client is afraid the course software will be hard for them to learn. So you would explain that you purposely use an easy-to-use software, and that your quotes include teaching sessions on how to use it. Ideally, you would want to explain those things long before the client even brings it up.
Eliminate competition
Chances are, your competition isn’t holding a discovery meeting, so you’re already ahead! But, by educating your client about all the processes that will be involved in their project, you can also make strides in beating out the competition. That’s because your client is now educated. If they now meet with one of your competitors, and that company doesn’t mention all of the things you did (and they probably won’t) it will leave your potential client wondering “Is this going guy going to handle everything I now know we need?
Qualify the Lead
One of the objectives of a discovery meeting is to help you decide if you should take on a particular client. This is known as “qualifying a lead”. For example, let’s say that in your meeting you get the sense that your potential client actually wants to do the project themselves to save money, and they are just meeting with you to pick your brain. Don’t spend any more time with them. Move on and spend your time finding clients who take you seriously.
Similarly, you might find out that your lead wants to hire you, but they only have enough budget to pay 25% of what you normally charge. You have a choice here.
1. Don’t spend any more time on this lead, as they are not able to buy your services.
2. Evaluate whether there is a good chance of a purchase in the future (I said GOOD chance, and you should ideally be able to gauge that by the end of the meeting).
In the second case, you can keep them on your list of leads, but be careful to not spend too much time engaging them until their circumstances change. It all comes down to this: you need to be spending your time with strong leads—leads that have a high chance of turning into a contract. Otherwise you will spend all your time talking to people who will never buy from you. Your time is like money: you have to spend it wisely. It’s a tough lesson to learn, and hard for many new business owners to embrace, but you must qualify your leads.
Obtain Information
This goes without saying. Getting information is the key to making all of the other aspects of discovery work.
What does a good discovery process look like?
The key to a good discovery process is to ask the right questions. I recommend the W5+H method: ask who, what, when, where, why, and how.
Here’s a sample list of the kinds of things you want to find out.
WHO?
Who will be involved in the project?
Who will be making the decisions?
Who will be assessing the project/stages?
Who has been involved to this point?
Who will be involved moving forward?
Who else have you partnered with (e.g. IT company, marketing company) for this project?
Who will sign the contract?
WHAT?
What is the project?
What is the deliverable?
What format will the deliverable be in?
What has already been done?
What still needs to be done?
What materials are available to me?
What tools are available to me?
What will be done by you?
What will be done by me?
What will NOT be done by you?
What will NOT be done by me?
WHEN?
When will you decide to hire me?
When will you answer my calls?
When will you sign the contract?
When will you make tools available to me?
When will you make materials available to me?
When will you be available for meetings/contact?
When will I send you the bid/quote?
When will I begin work?
When will I finish work?
When will I complete various stages?
When will I check in?
When will I answer your calls?
When will I be available for meetings/contact?
When will I be paid?
When will I return tools/materials to you?
WHERE?
Where will the work be done?
In what building?
In what office?
At what desk/station?
Where will touch points occur?
WHY?
Why is that the delivery date?
Why is that the deliverable format?
Why are you doing that part?
Why am I doing this part?
Why do you need me available on weekends?
Why does the work need to be done in your office?
HOW?
How will you pay me?
How will you send materials/tools to me?
How will you respond to my questions? (email, phone, etc.)
How will you assess my work?
How will you sign off on stages/final product?
Those are sample questions that you want to get the answers to before you submit your quote. Not all will be applicable to every project. And, depending on the type of work you do, there may be others to add. But I hope I’ve made it clear that you need to ask A LOT of questions. You may not get all the answers in one meeting. You may have to have a 2nd meeting or talk on the phone or via email.
But the main takeaway is this: The more you know, the more accurate a time estimate you can come up with, and therefore the more accurate a fee you can come up with.
* * *
That rounds out our article series on the discovery process. The bottom line is this: you always want to make sure you charge what you are worth, but you can’t do that if you don’t have a good handle on the number of hours you will be putting into a project.
Once you have that information, you want to start plugging numbers into an Excel spreadsheet. Calculate how many hours you will spend in meetings, on the phone, travelling to meetings and back, and of course, actually doing the grunt work.
That will help you come up with what should be a fairly accurate estimate of how long the project will take, and how much to charge.