• 20Jun

    When I started out as a consultant 20 years ago, I had the good fortune to connect with a very loyal client who would bring me in to support whatever company he was working with at the time, either as a C-level executive or as a member of the board. He and I created an established approach to working together, determining how to approach a target market and build buzz to promote his latest venture. Although he is no longer with us, he had a favorite phrase that I often quote to clients and prospects, “You can pay me for process, or you can pay me for results. Process will be a lot more expensive.”

    I remembered this saying again this week when I was following a thread from one of my LinkedIn Groups discussing fees for service. The originator of the thread was discussing the fact that he had a project that had now take about three times the amount of time he had anticipated, and would it be appropriate to go back to the client to adjust the fees for service. The overwhelming response from those on the threads was, “No, you can’t go back and ask for more money.” It’s up to you to determine the cost for your services, in advance, and then live with the consequences. The client should be expected to pay for the end result, not your process to achieve that result.

    That said there are tools you can use to limit your exposure, and educate your client about the process at the same time. I usually try to separate the contract from the actually scope of work. The contract should be the binding agreement that reflects the legal commitment for each party, basically, I will work for you and you will pay me, and if we disagree this is how we will resolve it. Separate from contract you need to define the actually scope of the project, including outlining steps, deadlines, and associated fees (either as a lump sum or as incremental sums, depending on how much visibility you want to give the client into your process). The idea is to make sure the client understands exactly what you are willing to do for your fee, and helps set parameters that are binding to the contract. I usually refer to the scope of work as Exhibit A in the contract and have the client sign the scope of work to demonstrate they understand what, specifically, they are buying.

    How you have a defense mechanism against “scope creep.” If the client comes back and asks you for something that is clearly outside the scope of the defined project, then you can point to your scope of work and say, “sorry, you didn’t contract for that.” There are some specific steps you can undertake to make sure that you have properly defined your project so you don’t “under bill,” and your client knows he or she is getting value for their money.

    1. Set clearly defined objectives for the project in advance – Make sure you know what the outcome of the project is supposed to look like. How does your client define success?
    2. Create a step-by-step plan – You don’t have to share all the details of the plan with your client, but make sure that your spreadsheet includes all the steps to achieve success. You don’t want to charge your client for process, so you better have your process buttoned up so you can make an accurate estimate.
    3. Be specific in outlining the scope of work – One of the challenges of marketing and communications projects is that the process is often ill-defined. For example, if you are planning a media tour, you may have to be flexible on deadlines to accommodate editorial schedules, and you may or may not want to define the number of meetings you plan to deliver, e.g. “a minimum of X and a maximum of Y.” Or when dealing with press release development, it’s not uncommon for release revisions to get out of control so you may want to define release development, e.g. one draft and two revisions. How specific you want to be about your work is a matter of your experience and your knowledge of your client.
    4. Use a change in scope as an opportunity to redefine the project. If the client wants more from you, that’s great! It gives you an opportunity to revise your proposal and demonstrate how you can deliver more value, more results, for a little more money. Use a change in scope as a bargaining point. The trick is to not be too rigid so you alienate your client.

    Of course, you can’t always account for every contingency. For example, if you commit to helping a client launch a new product at a trade show, there may be unexpected elements or steps that you can’t anticipate, such as having to support a show guide, an unexpected partner announcement, or some other last-minute opportunity. You can’t always go back and says, “Sorry, that’s extra,” especially if a few hours or extra work to cover the unexpected will make you look like a hero. You have to be prepared to go the extra mile for the sake of good client relations.

    Some of those commenting on the original LinkedIn Group thread say they believe that the client/contractor relationship is adversarial by necessity; that the client is always trying to get as much work as he or she can for free. I disagree. A good client relationship is a partnership, where you want to give maximum value by delivering for a fair rate. If the client underpays you, or tries to take advantage of you, then they know you won’t deliver your best work. If you adopt a policy of underpromise and overdeliver, then you can maintain a solid relationship with any client, without having to invest unpaid hours that fall outside the scope of the project.

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    Posted by Tom Woolf @ 10:36 pm

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