Bob Artner’s recent column, “Managing client expectations: The difference between sticker shock and Rusher's Gap,” generated a lot of responses from readers. Bob explained that once potential clients see the price tag for a project and sit for a moment in silence, IT consultants naturally assume that they’re bowled over by the proposed cost. In reality, the would-be client is simply estimating the real cost of the project.
Reader responses to the column led me to conclude that the sales presentation can be a real career maker or breaker for an IT consultant or independent contractor. If you can’t land the account, you won’t survive. Read what your peers have to say about cost analysis, project scope, and other details that factor into winning sales tactics.
Give a cost analysis
A few readers suggested providing additional details to a potential client when making sales calls. That way, value will be demonstrated rather than just cost.
“When putting together a high level design document for the client, which is followed up by a proposal (with costs, pros, and cons), don't give a lump sum, but rather unit costs,” wrote Eric Sommer, a technical consultant and developer with Dimension Data-Silverline in South Africa. “Have options or alternatives for each unit in the solution, and make sure the costs, pros, and cons are clearly stated. Then present two or three solutions, starting with the one you recommend, the cost, the pros, and the cons of each, and why you recommend it. Do the same for your second and third solutions, and be objective.
“The best solutions are not always the most expensive, and you can use that to your advantage,” Sommer added. “However, be careful that you leave choice in the proposal. The client must be able to cherry pick what he wants.”
Akbar Rattani, general manager of software and system consultation with ParaSoft Ltd. in Pakistan, used a similar method to land a contract for his firm.
An ERP sales presentation Rattani was giving to the owner of a textile mill was going well until the owner saw the price tag. He and the managers sitting with him began arguing about the price. “I said, ‘Let’s relook at the benefits and draw a cost benefit analysis.’ I asked the audience to tell me the advantages they will get out of my ERP implementation, then the problems they anticipate. After that, I started to tell them the drawbacks of the product they are costing upon and listed the problems.
“Finally, the end result was in my favor, and I got the contract.”
Don’t forget project scope
Donovan warned against submitting a project plan without a scope.
“In our experience, project costs often rise because a client alters the original plan that you built your price around, even if it’s only a small alteration. By incorporating scope into the equation, you can say ‘Yes, of course we can do that for you, but the cost will change because you changed the scope.’ This keeps you from being the bad guy and makes it clear to the client that more work equals more money.”
He also recommended that consultants do their homework before presenting a project plan.
“Most consultants ‘ball park’ and then get stuck when they're way off the mark,” Donovan said. “If you aren't sure, then say so—don't show off by trying to look like you have everything tucked inside your head, then be embarrassed when you're wrong.”
Likewise, SMFaris wrote to tell us that a consultant can’t always provide sufficient detail to accurately estimate the cost: “I have been involved in too many projects where the scope was not detailed enough to prevent cost overruns. But the problem was not that the vendor did not want to scope it out. Rather, it was that the client would not pay enough money for the scoping work. And if the vendor always did the scoping work for free, they would be out of business. So there is always going to be some guesswork. It is just the nature of the business.”
RGarnett also noted that scope can affect the final price tag of a project: “Of course, if you are very detailed about calculating the cost of the project, you should feel comfortable with your price tag and be able to defend it. I will usually assure the client that unless changes are made to the scope, the cost will be accurate.”
Hours, labor, and other fine points
TechRepublic members offered other tips for winning over clients during a sales presentation. Stevo wrote that demonstrating quality is key.
“Service quality is the difference between a customer's expectations and their perception of the actual performance of the service,” Stevo said. “Accounting for Rusher’s Gap in your initial estimate and meeting those estimates is an easy way to begin branding yourself for quality and added value.”
Proving results is what the client really wants from a sales presentation, Mike Spera wrote.
“Since most transactions are constructed as open-ended deals where the customer takes all the risks, conducting a deal for results takes real management and leverage during the acquisition process,” he said.
On the other hand, details like time and labor will also influence a client’s decision to sign a contract.
“When they say 20 hours, I know it will be more like 30 and then I budget for 30,” wrote MLiberty of dealings with consultants. “It is very annoying. I would rather they bid high on labor, and have me pay for the hardware and software upfront and only half of the proposed labor upfront. They could then bill me for the balance after we agree that the project is satisfactorily completed. At least I am in control somewhat. And I don't have to explain to the president why the cost is so much more.”
To avoid Rusher's Gap, Allan Harder—a senior network engineer with Alvaka Networks—breaks down the project into a manageable number of phases, then breaks the phases down into tasks. He noted that if you’re honest with yourself on your estimates, you may lose a few clients, but you will gain many repeat customers.
“From experience, I assign each task a time estimate (making it generously big, like 20 percent more than what it would be in a perfect world),” Harder said. “The only time I don't bump the number is if it’s a task I can do in my sleep.”
He continued, “If they still hem and haw, I either resort to scope trimming to redefine, offer to only implement the first phase if it has a useable cutoff point, or offer to increase the price they pay by 15 percent and make that the fee whether I finish 50 percent under my estimate or 50 percent over my estimate.”
Have you discovered any surefire tactics to win a contract? Care to share them with your peers? Post them below or send us a note.