When You Should Charge a Consultation Fee
July 6, 2021
There is no such thing as a free consultation. Your time is valuable. The longer you spend creating an estimate for a prospective customer, the more that estimate costs you. It isn’t appropriate to charge a consultation fee for every job you do. However, there are situations where it could be advantageous to you and your business to charge for the expertise and plans you deliver to your customers.
Charge a consultation fee if. . .
The project is complex.
Size and complexity matter when you’re deciding whether you should charge a fee for an estimate or not. Typically a fee can be requested for custom design-build jobs or extensive tree care projects that are outside your normal scope of operations. The key to determining whether you should charge a fee is the amount of time and level of difficulty of the project. If a project requires drawings, schematics, or a significant amount of critical thinking, then it’s probably appropriate to charge a fee for your estimate.
You want higher-quality jobs.
Your business might have a lower than expected closing rate for a number of reasons. You could be targeting the wrong customers, or your pricing strategy might not align with the market. Including a consultation fee for your projects could help with these issues. While a fee doesn’t automatically qualify or disqualify any prospect, it does attract prospects who are more committed to working with you. If a prospect already has cash invested in a project with you, then they’re much more likely to see it through.
You want to increase your close rate.
The final piece of maintaining a backlog is communicating clearly with your customers. Make sure your team sets expectations for your clients from the very beginning. If you know you don’t have enough room in your schedule to take on more work, instead of turning down a request, explain to the customer why you need to book them later in the year. When asked about how he communicates backlogging with customers, Mike DePriest said, “We’ve worked hard to educate our customers. If they call in the middle of June and say, ‘Hey, we want to rip out all those junipers and put in rock.’ I’ll say, ‘Could we give you a discount to do that in December when we really need work.’” Educate your clients on any struggles your business might be facing. They’ll appreciate your transparency and be more willing to be flexible.
You probably shouldn’t charge a fee if. . .
Your company is young.
In order for clients to be willing to pay a fee, you’ll need to establish credibility with them. You might have years of experience already, but if you haven’t earned that credibility in your local market, you could face resistance when asking for a fee. If your company is younger and your goal is simply to attract as many new clients as possible, it’s probably best to avoid charging consultation fees for now.
You don’t have to be on-site.
Most of your routine jobs shouldn’t require you to be on-site to give a customer a quote. With the ability to view satellite images of a customer’s property, being on-site to provide a customer a quote isn’t always necessary. Likewise, because you can easily find all the information you need to make an estimate, it doesn’t take long to create an estimate for a routine job. Charging a fee in this situation wouldn’t be appropriate.
You’re quoting a current customer.
The main goal of a consultation fee is to make sure you don’t waste your time on a customer who isn’t a good fit for your company. Consultation fees should only be used with new customers. Your current customers have already proven their value to you. If an existing customer asks for an estimate for a complex project, it’s probably best to shy away from charging a consultation fee. By asking a current customer for a consultation fee, you risk offending them or having them look elsewhere for their project.
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