Episode 75 · October 15, 2023
What Went Wrong? How This Client Project Went South
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In this episode
Keurig Dr Pepper put its advertising business out to review with 360-day payment terms, meaning an agency would staff the account, pay the salaries, and get paid about a year later. The industry's answer was a fairly unanimous no, and I was thinking about that while I edited this. My clients here are two co-founders in sustainability consulting, and a $5,000 package of theirs ended up as an $800 engagement, at a number the client picked and they didn't push back on. They wanted to know how that happened and how they'd stop it happening again. At the end, the one criterion I make every Academy member write down.
What you'll take away
- Your ideal client is one who can afford you. I've made every member of the Academy write that sentence out. Needing your help badly isn't enough on its own.
- A $5,000 package came in at $800, and the client picked the number. Her own summary: they spent more time in the sales process than they did on the work.
- Commitment bias is what kept it moving. She called it sunk cost. Once you're that far down the path, it starts to feel like one of the wheels has to hit.
- A downsell is fine, and it's got to be easy on you. They still get what they want, on your terms. What happened here was the other way round.
- "We've got four weeks" is data, not pressure. A deadline on their side tells you how likely it is they'll need to say yes to something.
In this conversation
The full transcript, in sections. Open any one to read it.
"How do we not do that project six months from now?"
0:00
I shouldn't have said we shouldn't have done that project like it was great, but how do we not do that project six months from now?
Keurig Dr Pepper, and an RFP nobody would answer
0:11
Welcome to the smart gets paid podcast with me. Leah niedersthal, I help women land higher paying clients in their independent consulting businesses, but I've never been a salesperson. My background is in corporate marketing, and when I started my first consulting business, I learned pretty quickly that it's about 1000 times harder to sell your own stuff than it is to sell someone else's. So I taught myself how to do it, and I created the sales approach that I now share with my clients so they can feel more comfortable in the sales process, get more of the right clients and get paid way more for every client contract. So whether your client contracts are $5,000 $100,000 or more, if you want to work with more of the clients you love, do more of the work you love, and get paid more than you ever thought you could, then you're in the right place. Let's do it together. Thanks for tuning in, and don't forget to rate, review and share, hey there, Leah here, and thanks for tuning in. I hope that wherever you're listening to this, wherever you are right now, you're having a great week, making some good progress on your business and taking some time for you. So if you've been listening to the podcast for a while, you know that I started my career in the advertising agency world. I worked for an agency called DDB and then an agency called Leo Burnett, before I went in house to a tech company. And when I worked in the agencies, I worked in business development, so my team and I led the efforts to get new clients for the agency, a brand or a company would put their advertising business up for review, as it's called, and we would be invited to pitch. And then my team and I would assemble a pitch team from among the creatives, the strategy people, the account people at the agency, and put together like a full on strategy and three or four spec campaigns working non stop for months, and then it culminates in this huge pitch to try to win the business. It's kind of funny right now, because this process is like so different than how the consultants that I work with actually get clients. I mean, even though it goes by the same name, business development, like in my methodology, there's no pitching, no responding to RFPs, but that's for another day. But anyway, this whole process starts with an RFP that the brand would send out to the agencies. And a while ago, the company, Keurig Dr Pepper, sent out an RFP for their advertising business. And usually these really don't get much attention outside of like the agency world, but this one really did. So Keurig, Dr Pepper, owns Seven Up, Canada Dry, Sunkist, Schweppes Snapple and, of course, Dr Pepper, and then a bunch of at home beverage brands like, of course, Keurig. So their advertising business is a huge piece of business for any agency, and when they sent out the RFP, and when the agencies saw the RFP and the terms across the board, they were shocked, because the company was mandating payment terms of 360 days. So think about 360 day payment terms, meaning that the agency would staff a whole team on this account, maybe several teams, and that team would do the work, and they would need to be paid their salaries. But if the agency sent an invoice, they would be paid from the client basically a year later, and during that year, the agency wouldn't have any income from the client. They basically have to float a year's worth of salaries for this massive agency client. But side note, the brand did offer a solution. The agencies can get financing independently. Your alternative is to get a loan, basically to get a loan so that you can service our business. Now, agencies are not really known to push back on these sorts of things, because, listen, the industry is hard, the margins are thin, the brands basically have all the power. But this was, I think, for everybody, just too much to bear. I'm in a Facebook group with a lot of media agency and PR people, and the reaction across the board was just no, like, do not pitch this business. We're not pitching this business. A lot of chatter around this, because really, it was so clear that this is a bad deal. This was a bad deal for any agency. So people were like, don't participate. Don't respond to this. RFP, don't participate in this process, because this is not good for your business. And I was thinking about this whole debacle as I was editing this episode, because in it, I'm talking to two women about one of their clients, where in the sales process, things went a little sideways, and they ended up saying yes to terms that they didn't like. And in the wake of it, there. Left scratching their heads, wondering, how did this happen, and how can we prevent it from happening again? The women I'm talking to are co founders of a consulting agency in the sustainability space. They've been running their business for a couple years, and one of them even has sales experience. But as anyone knows, even if you've been in sales, selling your own stuff is so much harder and more emotionally psychologically fraught than selling on behalf of somebody else. So in this episode, you're going to hear us unpack what happened in the sales process. You'll hear us talk through a way to help the client that's still positive and profitable for your business. We're going to talk about how to make the most of a not great situation, and you'll hear us talk through how to avoid it in the future. So if you've ever talked to a potential client who you really want to help but who maybe can't afford you, or you've gotten pushback from a client on price or scope, or if you've ever gotten so far down in the sales process that you just felt like, like, Can this be over? Like, something has to work out here, then I know you'll find a lot of helpful information in this episode. I want to send a huge thank you to my clients for allowing me to share this conversation with you. Take a listen, and at the end, I'll come back and share a lesson that you can apply to your business. So you might have noticed that with the economy being as it is, things feel a little shaky. Referrals are slowing down, budgets are getting cut, and clients who you thought would say yes, are saying no or not right now. And here's the thing, in this economy, you can't run your business by waiting for referrals. Clients just aren't going to swim into your net. You have to be intentional. That's why the best way to protect your business today and for the future is to have the two systems that every consulting business needs, a marketing system to bring the right clients to you and fill your pipeline, and a sales system to help clients say yes and get you paid more. But it's not just about getting clients, it's about security and stability and making your business sustainable no matter what's happening out there. Smart women are doing this right now, even in this economy, they're winning their biggest contracts, filling their pipelines, and their businesses are growing, which lets them do things like build up six months of family savings a lot sooner than they had planned, or go from having one to two months of revenue booked to having eight to 10 months of revenue booked, or getting to the place where you're able to pick and choose your clients and say no to the ones that aren't perfect. These are real results from women in the academy, because this is what we do inside the Academy. We help you build the marketing and sales systems that make your business and your revenue more stable, more secure and more sustainable. So if you've been in business for at least two years, if you made at least 120k last year, and if you want your business to feel secure no matter what's happening in the economy, join us. Apply today. It's marketspay.com/academy we get started on Monday, February 9, because you can't control the economy, but you can control what you do about it.
A $5,000 project that ended at $800
8:11
The one other thing is that one of our questions was that we, we ended up doing a project this week that it was totally fine, but it started off as a $5,000 project and ended up at an $800 project, and I don't know how that happened, and it was only, like, we only did one meeting with them. They basically just wanted us to review some stuff and give recommendations. And it wasn't like a it was fine, but it's like, how did that happen, and why did we do that?
Yeah, I'm like, should we have just never talked to them, and how do we weed them out sooner? But then it went really well, and I'm like, should we, like, keep trying, like, keep a relationship and try to work with them in the future when they're bigger? I don't know. I might not. I'm actually part of that is the part that we should change, I guess. Yeah, obviously we're negotiating. But, I mean, it's their bigger things.
They came up with the $800 number that wasn't like a net they like, were like, how about this? And we were like, wait.
Okay, I'm really confused. I'm sure you are too. So, okay, yeah, what happened? This like insane. So how did they come to you?
How it went, step by step
9:24
So the long story short is we reached out to them, and they were in so our services with we can do a huge project, helping somebody from the very beginning to the very end, but there are also a ton of pain points along the way. So they were in a period of time where they had submitted their assessment. You need 80 points to get certified. So they were in a time crunch where they really needed help figuring out how to make up those points. And so we offered, sort of our robust package, which is a full review, a couple of sessions for you know. Know, for recommendations and roadmap. And they basically said, like, we can't afford that. And then, and at that point, my opinion is, at that point, we should
have said, Okay, best of luck. But, but
it kept going. And then they kind of said, well, what if you just do one hour of document review and one meeting for recommendations, and then we'll give you $800 for that. And then we said, Sure,
it was like, sunken costs was like, Yeah,
we spent more time in the sales process than on the project.
Commitment bias, and one of the wheels has to hit
10:38
I'm sure. Yeah, I'm so glad, actually, that you said sunk cost. Because, you know, do you guys know this whole thing about commitment bias, which is, like, right? Okay, so you, at that point, you were like, something has to some, one of these roles of the jack. What is it? Oh, my God. What's this thing? Slot Machine. Thank you. One of them has to hit, you know, and so being aware of that, you know, when you when we get to the module on negotiating, you know, that's really one thing to be aware of, right? Just to, like, making sure, you know, I'm not making decisions right now because of commitment bias, right? So you think it should have just been done at that well,
The logo, the testimonial, and what it was worth
11:22
but the thing, the thing is, though, I think that, like, it was, it was a lovely project. It got a logo on our website, on the call, like the, like, subjective, emotional side, like they, they were so pleased with the work that we did, and it felt really good, because we helped them. We actually helped them a lot. And they both said, like, please hit us up for testimonials. We'd love to do, like a LinkedIn thing, you know. So it's like, if we, if we kind of, like, break even in terms of money, but getting that logo up there, getting that, you know, the sort of addition, like, the non monetary benefits of that project, I think were worth it, but I think for so for us, I shouldn't have said we shouldn't have done that project like we it was great, but how do we not do that project six months from now?
Mine it, then make sure it can't happen again
12:11
Yeah, yes, totally, yes. A few things I think. First, you know, thinking about the non monetary benefits. You know, it's funny, because when we, you know, like, again, when you guys get to the negotiation piece, it's like we're always sort of looking for, if once, once somebody says, you know, I can't afford that, or whatever, it's not what I had in mind, then we can start to make a decision. And we can, we can, you know, structure, something that has benefits to us that aren't just money. There are like, five things that you can work on. You know that you like levers you can pull that aren't just money. How do you craft something that's advantageous for your business? Now, the trap that people fall into a lot is, well, it's a good logo, and then they don't do anything with it, right? Like it's just they sort of sit there on the internet and doesn't actually help them. So there's, like, two, a few phases right now. Like, one is, how can we mine it? How can we use it? Right? Like, if they're like, users for testimonials, and you're like, well, we don't know how to ask for that. Just ask, Do you know what I'm saying? Like, reach out, craft something that we want to make it super, super easy for. Hold on. Is that my son, hold on. He really wants to come in.
Does he have good advice?
The downsell, and why it has to be easy on you
13:25
Yeah, he's really good at negotiating. I'll be like, you can have one cracker. He's like, How about three crackers? Yeah, earlier, right. No, he's really good. I mean, he wrote this module, actually, it's on him. So where was I going with this? Oh, so here's a few phases. How can you use it? Get the testimonial, turn it into content, talk about without naming names, like, what are some common issues that holds up this process? Why is, you know, focusing on these things that you think are not important, actually really important. Really important. How do most people do this process that is actually wrong, right? So, how can we, like, mine, it for that, so that we actually really can use it for good? And then, you know this. The other thing is, you know, like, how do you prevent this from happening? Like, the truth is that if this guy, if your lowest cost program costs $5,000 and these guys really had it in mind that it was 800 like, they just, they weren't ever going to be a great client for you until you, like, sort of came up on the fly with this other offer. Yeah, having what's called a downsell is okay. It's like, oh, you can't if this program, this $5,000 thing, is not what, either what you had in mind, or, you know, within your price range, or whatever, you can have a downsell, but the downsell has to be really good for you, and it has to take, like, no work, basically. So, for example, somebody wants to do the academy they went in when, like, all. The all the things you get, right, and all the coaching and strategies or whatever, and they can't afford it. It's like, well, you know, alternatively, we could just talk for an hour, and I can tell you stuff you can run with, give you some guidance. It doesn't require me to do anything, right? It's a really low lift for me. But it's also like, it has to be advantageous for me to jump on the phone, right? So you can have something like this, but it has just make sure that it is really advantageous for you. And PS, you know, when people take this option, which doesn't happen very often, because they see the benefits of the academy, because I'm like, you get none of the strategies, you get none of the templates, none of the coaching. I just talk to you for an hour, and then you you take my advice and you go run with it, right? So for that reason, you know, people see that there's value going in the other direction. So there's this, like sushi place by me, right? That has like a lunch special. It's like two rolls for $11 or three roles for $14 right? Well, like, obviously, three rolls for $14 like, makes more sense. Two rules for $11 would be like, overpaying, right? So, like, you can that type of principle is used all over the place, even, like my local sushi place, because you're like, we have this $5,000 program. We do all these things. You know, it includes all this stuff. There's all this value embedded in it. Or, like, we can talk to you for two hours and it's like $2,500
that makes sense?
Yeah, I love the word downsell. Like, as somebody who's worked in sales for so long, it's always like, the upsell, but, but what is the downsell? Which kind of reverses, like, what, like, upsell. I'm trying to, like, add something for your more money, but I'm giving you something else. And if you're down selling, then I'm giving you less, but you're giving me something
so that, yeah, it's like,
They got what they wanted, on their terms
16:54
totally, it's like, because when you think about a down sell, it's like, you're actually, you the client is actually still getting what you want. Yeah, you don't want to pay $5,000 you're getting what you want, but it's on my terms. What happened here with you guys in that other client is they got what they wanted and they got it on their terms, yeah, and not in terms of, like, an ego thing, you know, whatever, but like, you are, you are building a business. And so, you know, how can you avoid this in the future? Is craft something that is a downsell.
Well, we delivered, I feel like was a good, really easy for us, yeah, program. I just maybe we can be more intentional next time and be like, That's whatever, $2,000 or something, yeah.
ETSY, and a four-week deadline as data
17:40
And really, and also they gave you, this is good data, right? It's all good data. There's no mistake. It's all good data. And the fact that they they said, Well, can't you just tell us what we should fix and review it? That's really good data. Because I don't know if you were in the Etsy training, that'll be on your roadmap also. But this easy to say yes, Etsy stands for easy to say, yes. It's basically when somebody says, Well, can you do this? And you we use this pricing framework and a program creation framework to quickly craft something that does that exact thing. You know? So now guess what you this is exactly what you're talking about. Now we can create this thing that, like, we can sell it. We can offer again, as a down sell. Yeah, yeah.
We are getting a lot of interest from people in this exact phase too, like with our cold outreach. They're like, well, we have four weeks to fix this thing. And they like, it's, there's very clearly a need. So yeah, this makes a lot of sense that we can have.
Well, can I, can I offer one more thing so, and maybe you have this from your sales background also, but like, if somebody says, I have four weeks to do something, then they are giving you really important information about the likelihood that they will need to say yes to something. I mean, think about, like when you were in sales, if somebody was like, We need to get this closed by whatever date. And you're like, amazing. I'd love to work within the parameter for you. Yeah. So, so, you know, maybe this is really good data in terms of, like, you have this program that's like, the four weeks to and guess what, if you literally have four weeks, if they have four weeks, or they might have to start the process all over. And we know how laborious it is, because that's what you guys are here for. I mean, maybe that program's not 2500 Maybe it's like a lot. You know, do you guys know that term, BATNA? You heard of that this term? BATNA?
Yeah, best alternative to negotiation agreement. Yeah, negotiations, exactly.
My take: your ideal client can afford you
19:46
So what the old boys would call, like leverage or whatever, but like, they don't have as much leverage as you have, right? Because you're not under a four week timeline, right? So just. Ways to think about it, I guess where the where I'm going with this is nobody made a mistake, right? You got a lot of great data, yeah, and then it's going to be more profitable next time. All right, so I want to spend a little bit more time on something we kind of glossed over on that call, because we were talking about, you know, how did they get here with this client doing this work for a small dollar amount, and how to avoid it in the future? And the first way to avoid this situation is by thinking about who is your ideal client. And there's one quality of an ideal client that as you think about your ideal client, I want you to put on your list. I want you to write this down. This is a mandatory criteria for any ideal client. Okay, ready. Your ideal client is one who can afford you. I'll say it again. Your ideal client is one who can afford you. I firmly believe that when we go through the Ideal Client module in the academy, and we go through the exercises of what defines an ideal client for us, I actually make every one of my members write down that phrase. My ideal client is one who can pay my fees, because I talk to so many women who want to help the people that they're talking to, the clients that they're talking to, and they sort of bend over backwards, or they think that, because they've talked to some clients and the client said, Oh, that's expensive, they think that they need to create some sort of very low cost scaled offering, like a course or whatever. But here's the thing, if they can't pay your fees, they aren't your client, because, just because somebody really needs your help, that's actually not enough criteria for you to work with them so your ideal client can afford you. And that's why it's so important to talk about price upfront. And that's another part of the methodology in the academy, the conversation framework. Because otherwise, if you're not talking about price upfront, then you don't know if they're a good client for you, and you can end up spending lots of time in this process only to find out that they can't afford you. So that's what I want you to take away from this episode. Your ideal client is one that can pay your fees. If they can't pay your fees, they are allowed to work with somebody else, but you're not required to make it work with them. And when you can adopt this mentality, and you have this criteria for your ideal client, and you know how to talk about price upfront, then you can make a choice. Because I'm not one to say that you have to walk away from a client who can afford you in every instance, because think about if your work costs, say, 30k and when you talked about the price in the conversation, your client had 25k in mind. Then you can make a choice. You can adjust the scope. You can include non monetary benefits to craft something that's still advantageous for you. But if your work costs 30k and your client thought it was 5k then you can also make a decision and refer them to somebody else who might be a better fit. Or if you're so motivated, you can craft a down sell, as you heard us talk about today. In this case, they agreed to a scope that they liked, but the price was so far out of their acceptable range, but they had gone so far down the path with them that they ended up saying yes, and it's interesting because they were asking, Well, how do we prevent this from happening again? And I don't think that armed with the tools they have now that they're going to end up here again. But if you're going back and forth with a client over scope or price, remember to trust your gut. Don't feel like you have to say yes right away. Think about it, get some distance and trust your gut and trust your instincts, because you have the right to work with clients in a way that feels good to you and that's advantageous for your business. So make the choices you're going to feel really good about. Hey, everything we're talking about in this episode is part of the system women like you are learning in the academy. In the Academy, we help women consultants install the two systems. Every B to B consultant needs a marketing system to consistently attract the right clients and a sales system to lead a sales process to a yes and get paid more for every contract. So even if you have only gotten clients through referrals or word of mouth. In the academy, you'll learn how to attract and sign clients outside your network, how to lead a sales process with confidence, and how to get paid for your value, not your time. And there's no cold calling or cold emailing involved, no changing your services or making a course, and you won't use any pushy sales tactics. That's just not our vibe. So if you like what you've heard here, the academy may be your right next step to learn how you can get these two systems in your consulting business and make progress faster and with fewer roadblocks. Head to smart gets paid.com/academy and apply and we can chat about next steps. All right, see you over there. Transcribed by https://otter.ai
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