getting paid what youre worth: how to set fees, write effective proposals, and negotiate deals...
TRANSCRIPT
Getting Paid What You’re Worth: How to Set Fees, Write Effective Proposals, and Negotiate Deals
Patrick Kirchner – President AGIS
Getting Paid What You’re Worth: How to Set Fees, Write Effective Proposals, and Negotiate Deals
Agenda
Business and Marketing Strategy Understanding customers and markets Branding strategies Go to Market strategies
Product / Service Differentiation Expertise Value added solutions
Partnering and alliances
Getting Paid What You’re Worth: How to Set Fees, Write Effective Proposals, and Negotiate Deals
Proposals and Negotiations Proposal/Sales order styles and content
Understanding Customers and Markets
Customer interviews and focus groups WHO ARE YOU SELLING TO? WHO IS YOUR TARGET CUSTOMER?
The most successful products have been developed from what the customer NEEDS, not what the company thinks the customer wants.
iPhone/iPod – Listen to the customers Vendor and partner interviews – Establish a need with people
who know your business
Getting Paid What You’re Worth: How to Set Fees, Write Effective Proposals, and Negotiate Deals
Competitive Analysis PRE-GO-TO-Market RESEARCH RESEARCH, RESEARCH, RESEARCH
Cost analysis – Proper Pricing can make or break your business
Market analysis/price tolerance POST GO-TO-MARKET RESEARCH ADJUSTMENTS, PROFIT, VOLUME
Be Realistic, not optimistic – “Entrepreneurs are dreamers” “Key when raising money” – Investors can see right through
the optimism
Branding strategies
Branding Definition - The American Marketing Association (AMA)
defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers
“Reputation behind your company’s name and logo” Coca-Cola - #1 Recognized Brand in the world – Coca-Cola adjusts the taste of Coke throughout the world, listening to
the customer, consistent marketing campaign – cutting edge
Company image and market positioning
Have a plan prior to beginning any branding strategies
Who are you? How do you want to be branded? Financial arena – Stable, consistent, trustworthy Tech Company – cutting edge, “make technology
easy” Retail – trendy/low cost/exclusive Service Business – Customer Service/Value Added
Proposition
Value proposition
Elevator Speech - WHY ARE YOU DIFFERENT?
What makes sense as a value-add as opposed to a fee
Business and Marketing Strategy Go to Market Strategies
Pricing and market positioning Low cost provider
Better mousetrap, lower cost “You Have to make a living” Why are you the low cost provider Examples – WalMart, Hyundai,
High quality provider Are you actually providing high quality to justify the pricing
strategy Lexus, Rolex
Pricing alternatives Cost plus – Direct cost + indirect costs + fixed costs +
profit margin = Cost plus pricing (usually a per unit cost) Discount off list/published rates Volume pricing/price breaks – less per unit profit margin,
more volume. Value based pricing – Sets prices on the perceived value
to the customer, rather than on the actual cost of the product. Ex. Lawyers
Product / Service Differentiation
Examples: Lexus, BMW, Ritz Carlton, AMEX - Platinum How will you differentiate your business,
product, service Are your clients going to perceive your value
Expertise Technical/technology expertise Industry expertise Business process/functional expertise Methodology/approach Intellectual property (IP)
Most successful entrepreneurs look within their industry and develop innovative ideas or products to make their industry better
Sam Walton/Wal-Mart, Henry Ford – Ford Motor Company, Michael Dell – Dell Computers
Value Added Solutions Differentiate by combining products and services –
AGIS – my company – offer COBRA Services for Free, Voluntary Products, Compliance issues, Service Model
Productize service offerings – Google, Apple Create recurring revenue offerings – Microsoft Software –
consistently delivering upgrades to current clients Avoid commodity type offerings – Crocs Provide guarantees – “Tommy Boy” - warranties Create win/win relationships with customers
Partnering Leverage your combined strengths with strategic
and complementary partners to be “bigger than you are” all by yourself, get larger, more lucrative client engagements.
AGIS - Property & Casualty, 401ks, CPA firms
Land major customers in new markets/industries Expand your product offerings
Proposal /Sales Order Styles and Content Content
Understanding of business problem/need KEY POINT – “Never underestimate the power of
listening to your client” Solution/approach to solving problem/need Clear scope and assumptions Differentiators, client references,
skills/experience - “Short and to the point”
Input from Multiple Parties Sales Delivery/operations/subject matter experts Industry experts
Customer feedback – real people, real results
Formal vs. Informal Styles Know your customer and those who will be
reviewing/approving Don’t wear a tank top into Raymond James Don’t wear an Armani Jump Suit into a manufacturing plant
Your presentation should fit the client, like your attire Consistent Templates and Formats Legal Terms and Conditions
Negotiating the Deal Be confident about pricing and value proposition
“The only way you have confidence is if all the work has been done”
Don’t negotiate with yourself Set your parameters prior to the meeting, “how far are you willing to
bend”
Don’t give up anything in a negotiation without getting something in exchange (create a win/win negotiation)
Resist the need to respond immediately to every negotiation point If you are not an experienced negotiator, you do not need to give
every answer THAT SECOND. TAKE TIME, FEEL GOOD ABOUT what you have negotiated
Negotiating the Deal Be willing to walk away
Make sure this is a profitable client
Be careful about setting a precedent for future work Manage expectations
If you do not know the answer to a question – admit it Don’t BS a BSer
Getting Paid What You’re Worth: How to Set Fees, Write Effective Proposals, and Negotiate Deals
Questions?
Patrick Kirchner
AGIS