General Consultant Discussion

I know most of you already do this however I'll share that I've changed my approach on upgrades in 2015. Previously I'd have customers contact me and ask for an upgrade. I'd start the upgrade by getting the files to their server, get the new version installed, etc. Some of these were pretty pricy - $20k. All without any type of downpayment. My bad. You can imagine what happens next. I'm waiting twiddling my thumbs for some element of data that they are supposed to provide when at the last moment they cancel their desire for an upgrade. You name it I've heard the excuses. In most cases it is due to lack of business confidence. In other cases the users have very tight ""slow season"" windows of opportunity. Now this is not in itself unusual however the problem is when we (I) start these projects without a downpayment and without clear payment terms. Most end users will send an email similar to this one (coincidentally - a user who has already had me quote their UG 2x and cancelled unexpectedly once). Hi Wayne Just wondering, if we decide to do a MAS 90 upgrade do you have available dates in May 2015? Thank you. Best Regards. Let me translate: - We don't commit to anything - You ( the consultant ) block out a date based on our casual inquiry - In all likelihood we ( end user ) are going to only make a decision within a very short window of our desired live date which hopefully we've gotten you to commit to without any money down whatsoever My response: Hi xx, 30 days from receipt of downpayment (50% to schedule / 50% balance before go-live). I'm attaching an updated pricing schedule from the various versions I've previously supplied. The short read is: 1. Simple upgrade where you do the forms, custom reports, VI, Starship conversions yourself - $ x 2. Upgrade where we do the forms + Starship but you still do custom reports, VI - $ y 3. Upgrade where we manage everything - $ z Includes one test, one final upgrade (which must occur within 90 days from the test)

The short of it: - Before scheduling anything get a deposit - Get the balance before you go live As the saying goes - money talks, BS walks.

We mirror just about everything you outline above with the following exceptions: 1) Ask for 100% up front. You can always compromise to 50/50. 2) The timeframe between test and go-live must be within 30 days. Otherwise, things drag out. 3) The project is considered complete and accepted within 10 working days of go-live and resolution of only those issues reported by the client prior to project close will be included in the project scope of work. (I don't have our agreement in front of me so I'm paraphrasing. However, the point is, they need to test and confirm everything is working in a reasonable timeframe.)

Absolutely! Based on the session at MOTM 2014 I have been doing project quotes ( 3 options) and I actually make them give me a deposit before getting on the calendar and starting, one before testing/training, final before go live. It seems to keep them on track and it helps me with cash flow.

Exactly @ShawnSlavin I too only give them 10 days after Go-Live for any issues that need to be fixed and are included in the project scope. I also ask for 100% only if it is one of the smaller upgrade/project.

I had another end user who is one of those who loves to ask for quotes for upgrades and never execute. They are highly customized (another partner). I required that they pay me for an assessment (in advance) and they paid (again in advance) for a developer to review and correct a number of data issues. I'm very thankful that I did get the money in advance because even after all that they pulled back their upgrade desires due to stated business decline (who knows what the real reasons are). Back in my CPA days I remember we'd always get the $$ up front for clients in trouble with the IRS who had asked us to represent them. Reason being that as soon as the IRS lowered the boom suddenly the client had to dedicate all the money to paying the IRS and if we had waited there's no way most of them would have paid us. Increasingly this is a cash-in-advance / deposit business or you risk losing your shirt.

@DianeRuth don't be afraid to ask for 100% up front on EVERY project. You will be amazed at the results. We get push back maybe 20% of the time. In those cases, we negotiate a payment plan. The rest pay without question. This is even on projects over $100k. Our biggest resistor to implementing the practice was us. We thought we would run people off. It didn't happen that way.

What @ShawnSlavin said here: The project is considered complete and accepted within 10 working days of go-live and resolution of only those issues reported by the client prior to project close will be included in the project scope of work. Is VERY important. When we're closing a project the user might be dragging their feet about approving the work. They take forever to check the data to be sure it's ok. What they don't take forever to do is throw on a bunch of unrelated issues and try to make them part of the upgrade. It's VERY important to follow the steps Shawn outlines - especially when you are fixed fee. End users WILL go along with this - they just need to be told what the terms are in advance and during the work. We keep two lists: - Upgrade issues - Phase II issues (added fee). We won't start phase II until the upgrade is closed out and approved

You know it's funny that you say that @ShawnSlavin because I never thought they would go with fixed pricing and they are!!!! So you are right that I'm probably the biggest resistor. @WayneSchulz I agree that we need to keep the 2 phases separate and don't start the 2nd one till they sign off on the original one.

I really like the addition of ""live upgrade must happen within XX days"" we keep getting stuck where the client is ""testing"" and the project lasts forever. By the time they do want to do the live conversion, I've forgotten all the nuances and am starting from scratch. On another note, we allow 2 weeks for them to report issues. Last week we had a client report an issue from their upgrade to version 4.5 over 2 years ago and was upset they had to pay!

We have a healthy set of expectations but I need someone here to convince me that I should be comfortable asking for 100% up front. We go 50/25/25: deposit of 50% to get on the calendar, 25% when we've completed everything we expected to encounter, and the final 25% when we have responded to every issue (valid issue responses include Change Order Requests or ""No, that's outside the scope""). We're sharing the risk with the customer. Can you help me get to a point where I can ask for 100% up front?

@BrianRice I think the key statement is ""share the risk"". If you've done your job scoping the project and setting clear expectations and deadlines, the only risk is that your client won't pay, or won't pay in a timely fashion, or won't pay the full amount quoted.

This is a great conversation and I'm immediately implementing: 1. Ask for 100% up front (fallback is 50% to get on calendar / 50% BEFORE go live) -- alternative is walk away unless well established customer with good payment history. 2. Allow 10 days to check the upgrade work. I too have found if you do not give a time limit the customer doesn't make the time to check and they expect you to fix anything -- even if it's years later. I think there's probably an opportunity to price an option higher that allows 10 /30 / 90 / 180 days to check. I no longer will start any upgrade without a check in hand. I've had very good customers suddenly renege on verbal ""go"" for upgrades and I expect that trend to continue. I also will not go out to see any existing user (on-site / remote) who is a new customer to me but is seeking someone to perform an upgrade. I get paid to give an analysis (including providing what often seems like an endlus influx of ""so tell me what the benefits are of upgrading to x.xx ) though I will happily share that an upgrade from version x to y generally starts at z and if they're interested we would first need to do a review for $.

@WayneSchulz I like this idea for new customers ""I will happily share that an upgrade from version x to y generally starts at z and if they're interested we would first need to do a review for $.

And the more they talk about money in the initial call the higher the $ for the review...

@KathrynScofield We don't always but I like to think that we take our own medicine. If a vendor came to me and asked for 100% up front, I probably wouldn't engage. We have to keep the customer's perspective in mind and failure to pay isn't the only risk, it's OUR only risk. Their team could fail and even if it isn't likely (even if it has literally never happened before) our team could fail. I'm not suggesting that if anyone is already asking for 100% up front that they should stop. It just seems like a tough transition to make where the expectation has already been set ... and this is coming from someone that made the switch to fixed pricing many, many years ago.

@BrianRice we offer a 100% money back satisfaction guarantee. We call it our ""Confidence Contract"". (Don't you love marketing!) That seems to help offset the risk to the customer. I understand the ""mirror"" concept for agreements. We try to propose those terms that we would be comfortable with as well.

Brian, I suggest you try asking for 100% up front with your existing customers who know you. Fixed price, no hassles. Easier for customer than constantly writing checks. These customers already have confidence in you. Fall back to 90-10, with the 10 BEFORE go live. After all, they already have an annual agreement with you, so it's not about you getting the work done. One reason to have prepaid all or nearly all: it shifts the balance and urgency in the CUSTOMER's subconscous. Now your project is something they've already paid for, so they better make the most of it! This is all about removing money from everybody's thinking during the project and just focusing on getting the work done. it really is a different experience!

@BrianRice It is easier to set new policies with new customers - that's for sure. If you have the money back guarantee, then the 100% up front has little to no risk to the customer and in fact makes things easier in many ways for the customer. It's also about negotiation. Lead with 100% and if they need a concession to commit, you can do 90 / 10, or 50 / 50 or whatever else you feel comfortable with. We typically would say 100% up front at $xxx but if you prefer you can do 75 / 25 at $yyy (where $yyy > $xxx).

@ShawnSlavin I love the Confidence Contract naming and understand that the reason I'm not asking for 100% up front is that I wouldn't be comfortable paying that way. If/when we get there, we may be borrowing that. @JerryNorman hits nearest the target by re-framing the dialogue. It isn't about money, it's about the job. @PeterWolf we always include choices, I'm not sure ""100% up front at $xxx but if you prefer you can do 75 / 25 at $yyy (where $yyy > $xxx)"" wouldn't over-complicate the presentation. If we work up to this, we're likely going to jump in all the way. Thanks all for the discussion!

Brian, I agree. I don't put that in the proposals. I introduce it if they ask for terms.

@BrianRice Whichever way you roll -- 100% or 50/50 -- the key is to communicate the terms from the start. I strongly advise collecting the balance before go live because most upgrades are never really done. I'd be very open to offering a higher price if the user wanted 30/60/90 days to check their work but I'm not waiting 90 days for my money. BTDTGTTS.

Obviously life isn't perfect but part of the disconnect for me seems to center around the fact (my perception) that we don't have problems closing projects or collecting the final payment. Part of that is because we aren't doing upgrades for anyone that isn't enrolled in an ongoing plan. When we do find a customer that needs and upgrade and doesn't have an ongoing plan, we build one into the project.