Question: How do you tell your client you are increasing your fees? -Herbert -a great friend.
A fantastic question.
I remember the first time I increased my fees. I was always a wuss: I did not want to raise fees or upset apple carts. I had some low-fee clients that did everything in integrity. They paid my fees and had great processes. I remember talking to my coach with that frustration that I felt I was worth more.
He said, “to raise fees, you must show how you will add more value.”
When you look at your relationships with clients you want to raise fees on, you want to prepare a mini, verbal presentation. It will serve as an argument and a conversation about how you want to deliver even more for them.
One of my low-fee clients was also one of my best. We were making multiple hires per quarter. It was the lowest fee I worked on, but I filled almost every position they gave me. That is why I was afraid as hell to raise the fee.
The advice my coach gave me ended up paying for years of coaching.
Here it is:
Value set where you are going to go deeper.
Option 1: The Ask
Immediately, I called the hiring manager, and I said:
I want to invest more in research to create more extensive lists. Based on the size of our fees, I have a budget (which was not wholly accurate, but people believe in budgets). Instead of making two or three attempts, I want to make up to seven attempts. I want to vet the candidates more thoroughly. Because of how the fee is structured now, I am sensitive to the number of hours I am working on your search vs. our other clients. You are the lowest fee we have. I have agreed to that, but I want to go all-in with you.
He was like, stop, stop, stop, stop. What do you want?
I want to take the fee from X to Y.
He goes, if you take the fee from X to Y, we will get all of those things?
I’m like, yep.
He goes, done.
When I have conversations with clients that know, like and respect me, it has never been an issue. Part of me always goes; I should have asked for more. But I was always happy. I got my ask.
Option 2: The Tell
We have done time and motion studies over the past 12 months, and we have realized it is taking significantly more effort to get a hold of quality candidates. Top performers have multiple opportunities, which means we have to invest more time in the search, which we are thrilled to do on your behalf. We are going to be increasing the fee for 2022 to 22.72%. I wanted to see Mr. or Ms. Hiring Manager if you had any questions before I send you our new fee policy.
For those of you who have followed me for a while, I always use crazy odd numbers. I love crazy odd numbers because people think we did time and motion studies. What are time and motion studies? Metrics. Meaning it took more attempts to get somebody on the call. It took more emails to get somebody to want to talk to us. We knew all that. We measured all that. So, what I was saying was 100% within integrity. You have to work harder to prepare for counteroffers, preps, and falls. You have to have a bigger bench of candidates for your clients for those things to happen. To have all of those things requires more time. More time is more money.
That is a second way to have the conversation. You do not just ask for it; you present your new fee policy.
When you propose a slight increase, like moving from 22.72% to 25.13% (not jumping from 20% to 30%), if you are happy with the client and they perform relatively well, you can sneak it in. You can almost do this every year. You can continue to climb that ladder in multiple steps. Click here for additional scripts for changing your fees.
Raising your fees all comes down to confidently framing the new fee as a value add for your client. Download your free copy of The Confidence Booster worksheet to break down the complexities, ideal outcome, and stategies for improvement.
P.S. Whenever you’re ready… here are 4 ways I can help you grow your recruitment business:
1. Grab a free copy of my Retainer Blueprint
It’s the exact, step-by-step process of getting clients to give you money upfront. https://get.therecruiteru.com/lm
2. Join the Recruiter Think Tank and connect with firm owners who are scaling too It’s our Facebook community where smart recruiters learn to make more money and get more freedom. https://www.facebook.com/groups/there…
3. Join me at our next event
3x a year, I run a 3-day virtual intensive, sharing the 9 key areas that drive a 7-figure search firm. Click here to check out the dates of our upcoming event: https://get.therecruiteru.com/emerge
4. Work with me and my team privately
And if you ever want to get some 1:1 help, we can jump on the phone for a quick call, and brainstorm how to get you more leads, more placements, and more time. https://get.therecruiteru.com/scale-now