How to Charge for Sales Time
Walking out of a prospective customer meeting, I realized that I had just laid out exactly what their online strategy should be over the next twelve months. And I didn’t make a dime off of it. Whether they hire me or not, they’ll be leveraging my knowledge to shape the future of their business.
That’s the big pain of a consultative sales approach: it is founded on the idea that you are a consultant providing intense value instead of selling.
As I walk to my car, I mutter under my breath, “I should have charged for that.”
I’d just given away fifteen years of web expertise in pursuit of the deal. Could it have been different? Would they have paid me for that time? How would that lead to a project if they were paying me for consulting?
And so it goes.
Can It Be?
If you are familiar with my approach to sales, you know my advice is to spend more time with your prospective customers before you present a proposal. I encourage up to nine interactions consisting of a lot of discovery and discussion. One of the most common questions I get back is, “Can I charge for this time?”
The short answer: “Yes.”
But, if you are currently selling under the typical web professional model (client calls > one hour meeting > email proposal > endless followup), then I would avoid saying, “I need to charge for this meeting.” Because all you could possibly be doing in that hour-long meeting is looking at their requirements and telling them how much it is going to cost. This is not a service worth charging for, this is order-taking.
On the other hand, if you get a lead and offer up a consultative approach to helping your prospective customer to devise a plan to solve real pains in their business, the sky is the limit.
I charge $250/hour for consulting. Which means if a prospective client wants me to help them go through discovery and define what they need, it might add up to a $3,000 bill before a project even starts.
(Consulting call with Jeff Elder of Bald Head Design)
What Does Charging for Sales Time Mean?
If I follow my complete interaction process, I might find myself investing seven to ten hours of time researching and interacting with my prospective customer. This time is a risk. If there is a 50% chance I am going to win each deal I pursue, then 50% of this time will be completely wasted.
In the charge for sales time model, at the Qualification step, I would explain to my prospective customer that I charge for sales time. It goes something like this:
“Based on our preliminary conversation, it seems like you might be a good candidate to do a bigger project. However, I like to start each of our big projects with a smaller discovery project. This process takes about ten hours and will cost your company $2,000. This process will yield a baseline of research, competitive analysis, and recommended scope of work. You could take this work to other decision makers, or other web companies, to do the project once we are done.”
At this point, you are using this discovery project as a pre-qualifier. Does this company value your expertise and strategy? Are they willing to invest in your expert opinion to help them develop an online strategy for their business? This is very different than going directly into the website deal.
But it can potentially save you time or make you more money.
Save Time, You Say?
Asking a potential customer to invest a little bit of money with you, instead of a lot of money, is a smaller transaction. If you have a hard time getting a prospect to commit to a five or ten hour discovery project, then how are you going to persuade them to pay you five times as much for the whole bag?
If you get pushback at this stage of the process, it might be a sign that your buyer is not ready to invest in their online business. Sometimes I use this approach as a pay-gate to decide whether or not a prospect is really serious.
Making money in your sales process can be really rewarding. It also sets the tone that you value your time and experience and you think that it is worth money.
I Don’t Always Charge, But When I Do…
There are certain scenarios that are better candidates for a paid consultative sales approach. Here are a couple that I stick to:
- Prospect knows they have a problem, but they don’t know what it is
- They have weakly defined project requirements
- A prospect is fishing for answers, but doesn’t seem like a serious buyer
- They are unsure about their web strategy
- The ideas they are bringing to the table sound like, “We’d like our website to be like Facebook, but…”
And other times I have no need to charge for sales consulting time:
- Prospect is in a market that I have done a lot of work in (I rarely find new pains, and they want my exact solution)
- We have been referred in and are the only company bidding
- There is an RFP process that doesn’t allow for it
Almost every time I have engaged in a paid discovery process with a prospective customer they have turned into a project customer. Not only that, but they are super respectful of my time and understand that there are no freebies up front.
In order to charge for discovery and other aspects of the sales process, you need to be a really good sales consultant. You need to be able to add value to someone’s business by just being able to give them perspective, insights, and advice. When I first started building websites, this would have been more difficult.
These days, I don’t even take meetings unless I have been paid my consulting rate. This is on the extreme side of the spectrum, but I have invested a huge amount of time establishing that I know what I’m talking about and have a unique perspective that is worth money.
No matter your position on this topic, if you haven’t at least tried to charge for your sales time, give it a go. I think you’ll be surprised at the results and might consider making it a part of your offering.