Captain’s log, stardate 20210615
Fellow list member Franz Sauerstein wrote in to ask a question about how to keep hours out of a retainer conversation. (shared with permission):
Can I ask a reader question, too, please?
Situation: I help D2C eCommerce companies make the jump from 6 figures to 7 figures in yearly revenue. The founders are usually bogged down, they are plateauing at that stage - what brought them here won’t get them there. I come and act as a fractional CMO, but bring my well established team with me - so clients get an eCommerce strategist, operator and a host of specialists to unclog their bottlenecks. I require clients to do a one-off project before (and a roadmapping session if we need more intel), so that clients know how I work and I get to know them.
Challenge: I haven’t charged by hour, day or week since 2014. I do charge my fractional CMO retainers by the month, starting at 3.5k to 8k. However, I struggle to write proposals (or sales pages) for this that exclude hours / days per week AND answer the inevitable question that will come up: “How many hours is this per week?” I understand where clients get from: They know that they can get a full-time CMO, 40 hours a week, for ~120k to 150k a year and want to compare what they are getting, because they can’t compare the value - I am selling the invisible for them. I know what we will do in the first 2 to 3 months - but after that? Depends on how the situation unfolds. (By then clients are so happy though that they don’t care - they now know what they get!)
Question: How do I ditch "hourly" billing in fractional CMO retainers and still win contracts?
Sell the results not the hours.
Selling results instead of hours starts in the sales interview, where you use The Why Conversation to uncover their real motivation for hiring someone expensive like you.
In Franz’s case, that would include a question like:
“Why don’t you just hire a full time CMO?”
The client surely will have thought of this option and will have a good reason why it is not a good fit for them.
Once you have that answer, you can put it right in your proposal using their own words.
If a potential client asks how many of your hours they’ll be entitled to, one possible answer is:
“I don’t know, which is why I don’t charge by the hour. It wouldn’t be fair for you to have to pay more if things take me longer than expected.”
Another possible answer is:
“As many hours as it takes to get the results you want.”
But probably the best thing to do in Franz’s particular case (i.e., monthly retainer) would be turn the question about by saying:
“Why do you ask?”
This question will help get at the client’s actual concern, which you can then address head on.
Ultimately, the “How many hours?” question is a head fake.
Good clients don’t care about hours, they care about results.
(And OBTW results aren’t invisible, which is why I began this message by suggesting that that is what you should sell instead of your time.)