How Pricing with Options Increased My Fee by $10K Reviewed by Momizat on . Assessing the Engagement Prospect In this article, the author shares how he crafted an engagement letter that enabled him to earn far more than a fee he was pre Assessing the Engagement Prospect In this article, the author shares how he crafted an engagement letter that enabled him to earn far more than a fee he was pre Rating: 0
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How Pricing with Options Increased My Fee by $10K

Assessing the Engagement Prospect

In this article, the author shares how he crafted an engagement letter that enabled him to earn far more than a fee he was prepared to accept. Understanding a prospect’s motivation and the underlying facts enabled him to craft an engagement letter that worked for both and earned him $10,000 more.

How Pricing with Options Increased My Fee by $10K: Assessing the Engagement Prospect

By listening to my prospect and understanding the pain he was in, I crafted an engagement letter with three pricing options that provided the solution he needed. It resulted in me getting a $10,000 higher fee based solely on my report delivery date.

Quick Background

  • I received a phone call from a long-time referral source—a CPA firm.
  • An individual and business client of theirs had passed.
  • The decedent owned interests in several real estate entities.
  • The prospect/executor was the decedent’s brother.

What I Learned

  • Prior to his death, the decedent was suffering from worsening dementia.
  • My prospect had to scale back on his successful law practice to manage his brother’s substantial affairs.
  • Because of the time he had already spent away from his law firm, the brother badly wanted to wrap up the estate’s affairs as quickly as possible.
  • He wanted my valuation report as soon as possible, and sooner would be way

What I Did

  • Notwithstanding the brother’s frame of mind or frame of time, I vetted the prospect just like I do for any other engagement.
  • The time spent on phone calls and e-mails with the brother allowed me to get all of the information and documents I needed to price the work; without considering alternative due dates for the report. Or I should say with the typical due date of “four to six weeks after receiving all the requested information.”

The Linchpin

  • Knowing my client was deeply motivated, I presented three pricing options in my engagement letter:

Estimated Fee Not to Exceed

Draft Report Completed In

$30,000

3 weeks

$25,000

4 weeks

$20,000

5 weeks

  • I would have been happy with the $20,000 fee. It accurately reflected the work required to value fractional interests in several real estate entities for estate tax purposes.
  • I was hoping for the $25,000 fee because I knew I had some slack in my schedule that would allow me to finish the report by that deadline.
  • For the $30,000 fee, I was willing to move things around in my scheduled to make it happen.

My prospect accepted the first option.

So What?

I hope you can see the lesson here: do not react too quickly when you get an initial inquiry for a project. If I had done that:

  • I would not have learned why or how much my client was motivated to get the work done ASAP.
  • I would have quoted my usual fee without communicating that I could do better, timing-wise.
  • I would not have delivered what the client really wanted and was willing to pay for—a solution to his pain.
  • I would not have made my long-time referral source as happy as they are now because of the service their client is getting.
  • I would have left $10,000 on the table

Everyone has a different idea of what a successful practice is. The practice you want is personal because it is based on what “successful” means to you. I help practitioners focus on the strategies and tactics to build/grow their versions of successful practices. If you want some help with that, e-mail me at rod@rodburkert.com.

The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

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