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Building trust for a long-term relationship as a portfolio executive

As you start to identify clients, one of the things you need to do is establish a compelling reason for them to buy now.  You want to build a long-term relationship, but most people won’t commit to a long-term relationship until they have worked with you.  A diagnostic is a simple, low cost way of starting a relationship. Crucially, you do not start your relationship with a freebie: you want to build a commitment to pay.

The ‘pitch’: symptoms and root cause

Your offer as a portfolio executive to your client is “I really understand this functional area”.  Let us say it is sales: “I really understand what it means to lead and manage a sales function.  I have been doing this for many years of my life and I know that there are a whole series of things that could work better in most organisations.  In the conversations I have had with you, we have identified that you are not getting enough leads or not enough of your proposals are being accepted or the sales cycle is taking too long, or salespeople are giving deep discounts right at the end.  All of this means the sales forecasting is extremely poor”.

Whatever the symptoms are, these are indicators of a lack of process maturity or, to put it another way, a lack of capability maturity.  So, what you say to the potential client is: “We both agree that your sales function could be more effective, you could be winning more sales, faster and reduce lost and deferred sales but we do not really know what the problems are.  We know what some of the symptoms are, but we do not know where the problems are.  So, what I am going to suggest is that I come and spend some time with you and the team.  I will have a conversation with you, as CEO, and with the people involved in sales, perhaps some of the people in marketing and some of those involved in delivery.  We can then understand how the sales function and the collaboration with marketing and delivery.  We will find where the opportunities for improvement are.  I will suggest to you what we might do as a series of projects, over a period of time, to develop the sales function so that it is more powerful and effective.”

Getting the client used to paying for value

So, what the client is being promised is a small amount of your time to deliver a standardised report (you can probably show them a sample report to see what it looks like). Importantly they have an opportunity to experience working with you as well as a plan of action going forward.  All the client must commit to is paying an initial diagnostic fee.  If they do not like you or the results, they can find help elsewhere, but they have a useful document that can tell them how things are and how they need to change.  

How do you price this?  Well the price you put on this sets the tone for the price you are going to be able to charge on an ongoing basis.  What I would tend to do is to price this quite high as a fixed fee, but then either offer an introductory discount or offer them a money back guarantee if they don’t believe it gives them value.  You reduce their up-front risk, but set a clear benchmark as to what your day rate is.  I might say to a client, “This diagnostic is usually 3- or 4-days’ work: I normally charge a fixed price of £3600 which reflects that my day rate is £1200 per day.   However, because we haven’t worked together before, I am prepared to give you a discount of 25% so the price will be £2,700”.  You are requiring them to commit to you, both in terms of spending some of their time and spending some of their money.  This should crystallise the sales process.   

Otherwise, the risk is that you end up giving them increasingly valuable free advice, as they talk to you about their problems, and they defer making any financial commitment to you.  The diagnostic is a crucial stepping stone in the sales process: they commit to paying you some money; you have an opportunity to demonstrate value and to set a benchmark for your fee rate in the future relationship.

Delivering early benefits at an affordable price

The way that you deliver this diagnostic has to enhance the opportunity of a further sale of regular work.  The process I would use would be to go in and do the investigation, prepare a draft report, present that draft report face to face in summary form to the CEO, discuss with them your findings and suggestions for the next step and agree with them that having modified what was in the draft report you will send them the final report.  In addition, you will send them a proposal, based on what you have discussed with them in the meeting, for an ongoing piece of work.   You will start by doing a minimum of a day a week as the head of function, (e.g. part-time head of sales) to deliver some first quick win projects.  You will give estimates for the effort and begin to improve the process maturity of the function.

Not only has the client committed to pay for the diagnostic but you have also had the face time to get them to commit to an ongoing relationship and you have positioned that relationship to meet their most immediate needs.  If they have concerns about the cost, then you can reduce the proposal on the table without changing the day rate.  For example, if they say they cannot afford £4,800 a month for 4 days you can agree to do the project a little bit slower, with a little less effort each month.  It will take a little bit longer, but you can get there in the end, and only bill say £3,600 a month.   You need to highlight to the client that the quick wins are those that are going to give the biggest benefits for their business at the lowest costs.  You need to demonstrate the cash pay back and then build the case for the other projects that would be useful to do.

Making the most of a diagnostic

The diagnostic is not an end in itself:  it is a low commitment, high value relationship building tool to position yourself as the ‘head of’ or ‘director of’ a significant business function on a part-time basis.  It enables you to quickly prove your value, get paid earlier in your engagement with a client and set out a plan for on-going work with a business you have started to know.


Charles McLachlan is the founder of FuturePerfect and on a mission to transform the future of work and business. The Portfolio Executive programme is a new initiative to help executives build a sustainable and impactful second-half-career. Creating an alternative future takes imagination, design, organisation and many other thinking skills. Charles is happy to lend them to you.