Struggle with Client AND Improve the Relationship

struggle with a client over over fees

“I don’t know what to do. I’m in a struggle with a client, and I think I’m losing.”

Elizabeth opened our recent conversation with this real worry. She explained that the client has always been demanding and now the CEO is pushing and pushing again for a fee reduction.

She saw only two options: reduce the hourly rate or lose the client.

Reducing the hourly rate would eliminate all profit from the work for this client. However, losing them completely would eliminate all revenue.

Neither option was appealing. “Is there another option?” she asked me.

The work they did for this client was at the leading edge of cybersecurity, which is their absolute sweet spot, and this client did introduce them to other companies who often became clients. Therefore it would be hard to lose them.

She was shocked when I suggested that she first work on resetting the relationship rather than dealing right away with the question of rates.

Reset the Relationship

It would take three steps:

  1. Meet with the CEO. Focus exclusively on the client’s major goals for the coming 12-24 months. I advised her to share this question in advance so the CEO was prepared, and to keep the conversation focused on the years ahead. Listen deeply to hear the client. Become adept at saying the phrase “tell me more” to draw the client out.
  2. Once the client had described in detail everything they were working towards for the next 12-24 months, they’d discuss what IMPACTS those achievements would have on the CEO and the firm. How would life change for the company, and for the CEO personally? This is a critical question that too often gets lost or forgotten in discussions about actions. And I advised her to push far beyond “benefits.” Life changing value is big.
  3. Next, the scariest part—talk about value and the relationship between life changing value and fees. Get the client to share their point of view about paying for a range of services and products. Keep the conversation focused on outcomes and value, not inputs like time and materials.

Elizabeth agreed to invite the CEO to this meeting and to alert him to the topic of conversation: the future of his firm and him personally.

Understanding the Fee-to-Value Ratio

I knew Elizabeth could succeed with Step Three if she followed our Fee-to-Value Ratio process. This is the PREPARE Step that we take each client firm through to help them phase in Value Based Pricing.

I adapted it for Elizabeth for her to use with this client.

The Client Was Intrigued

The PREPARE Step has 4 parts. When we do this with our clients, we look at that client’s range and mix of client engagements. In this case, we tailored it to the range of projects Elizabeth’s firm did for this one client in the past 12 months.


  1. Articulate value delivered
  2. Study the past twelve month
  3. Sort your lists.
  4. Establish fee to value relationships

You can read the details of implementing the PREPARE step here.

It’s what happened with this client that is important today.

By the time Elizabeth worked through the first 3 parts, the client was completely engaged. He pointed out value in ways that Elizabeth didn’t even see. He understood the process of ranking the value delivered and how fees should reflect relative value.

Elizabeth and the CEO worked together to list the fee-to-value relationships in order of importance. He chose what value was on the critical path to those 12-24 month goals and which is not. Then they agreed on value based fee brackets commensurate with the value delivered.

Elizabeth would vary the fee according to the value to the client, ensuring that her firm made a profit on each engagement. Hourly rates would be a thing of the past.

Are You Picking Up the Warning Signs of Discontent?

I wrote last week that clients let you know when they’re unhappy.

It’s critical that you to recognize the warning signs and respond appropriately. Elizabeth’s client had given her four of the five warnings, but she didn’t take them seriously until the CEO issued an ultimatum.

We Will Adapt PREPARE for Your Clients

I’ve been beating the drum for innovation for more than twenty years. Innovation is changing something you use in one way to use it or apply it another way.

One of our own innovations is helping our clients use the PREPARE fee-to-value ratio process to get the fees right for one client only. It works best for firms that have a few clients for whom they work several times in a year (any consecutive 12-15 months).

If you’re curious how it works, that would be a great topic of discussion for a STARTER Call. Book your call here. Or reply to this email or text STARTER to 703-801-0345.

Don’t miss the warning signs from disaffected clients until its too late!

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