How do you evaluate a potential new client?
One of the big issues for PR consultants is to determine how worthwhile it is to spend time and effort on a potential new client. Will they waste your time or will you win the business? A useful formula can help with this.
It is the MAD FU formula, which stands for:
Having been a senior consultant in a top PR firm for several years, plus running my own consultancy on and off for 15 years and doing some work as a business coach, I have asked myself these crucial questions many times when considering a new client.
The key question to resolve is money. Does the client have a budget for the work, and is it enough? This may seem rather basic, but quite a few potential clients may not have thought through the amount of work required. And some think they can chisel on the cost. You can see this especially if their first question is about cost instead of asking about case studies, testimonials, a client list and previous results, etc – especially if they don’t seem to understand the amount of professional work required for their project.
Ask the client directly what the authorized budget is, or at least how much they have allowed for the work. If the amount is inadequate, don’t bother going any further. In my experience, government agencies are some of the worst with this; they try to screw consultants down to a minimal cost on a competitive basis and then for one reason or another (often because they haven’t thought the project through) will later try to add in project variations for no extra fee.
And if a potential client wants to pay you only on a percentage of sales, this is an immediate danger sign; you should always work to a fee, and any conditional extra payments should come on top of that.
The client needs to be authorized to sign off on payments. If not, they need to tell you who does have the authority, and how much they know and are involved in the project. Sometimes you may do good work, but your client can’t sign off on the work, and the person who does have the authority knows very little about the project or doesn’t even support it, especially if the cost is coming out of their budget. This causes fights over payment.
The client has to be motivated and involved in the project. Try to find out their emotional commitment to the work – and to you or your firm. If you are only one of many consultants they are talking to, the effort to win the business is hardly worth bothering with. They might be seeking free ideas or trying to screw you on cost, so tread carefully until you know they are on the same wavelength as you.
The business of the potential client needs to fit your spectrum of desirable industries. Most consultants are not comfortable working with Big Tobacco or Big Alcohol, chemical industries, fracking projects or similar.
The client company needs to be big enough to have the budget, but nimble enough to be able to make decisions fairly quickly. And if you don’t particularly like the product or service being promoted, don’t go any further – because you need to be emotionally committed to the cause.
Prospects in a hurry are the best – as long as they are not running behind because they are incompetent. If they need the service you are providing now or by a looming deadline, your chances of them making a commitment are good. But if there is no urgency, this is an amber light – they may not decide to go ahead. Ask them directly what their deadline is for completing the project, and respond to that.
This ‘rule of thumb’ MAD FU formula will help you to weigh up how worthwhile a potential client may be, especially if you are a one-person firm and have limited resources to spend on winning the work.