4 Ways to Ensure You’re Not Missing Out on Contingent Business Income

How would you characterize the services you provide for your clients? Do you view your role as necessary but ancillary, or is your work essential to your client’s core business model? And if you identify more with the latter, are you being compensated accordingly?

In other words, are you going out hunting and bringing back a full meal for your clients only to be left with a single drumstick? Many organizations rely on the services provided by third parties even to keep the lights on and stay in business. If your deliverables play such a critical role in the health of your client’s organization, perhaps it is time to look into how much money is being left on the table.

Understanding Contingent Business Income

In simple terms, if you are providing value for your clients that directly results in the growth of their business, your pricing should reflect that. Do not undervalue your services if your clients struggle to function without your assistance.

Unfortunately, accurately quantifying the value you provide for your clients can be tricky and complicated, especially without access to the business’s financial information. Compare your rates to competitors in the field, and if possible, keep an eye on the overall performance of your client’s business. Stay invested, stay informed, and collect as much data as necessary to better advocate for yourself when requesting a higher payout.

Working with Your Clients on Budgets and Payouts

Are you unsure about requesting a higher rate of contingent income out of the blue? Consider speaking with your clients to uncover ways they would feel more comfortable increasing your payout.

For example, you can bet on the value of your services by agreeing on an initial price within the expected budget attached to a particular payout if your next project exceeds expectations. This process is often referred to as a balloon incentive (not to be confused with balloon payments).

Your clients will likely be amenable to this process because balloon incentives mitigate risk. If your next project underperforms, your client is off the hook for delivering a payout that exceeds their current budget for your services.

Negotiating with your clients on a higher payout requires a careful balance, as you do not want them to believe they can receive the same services you provide at a lower cost. What extra value can you provide your clients to help sweeten the deal? What makes your services and your brand unique? Are you willing to go above and beyond?

An Incentive for Continuous Improvement

Requesting a higher payment commensurate with your client’s contingent business income can provide an opportunity to expand your role and responsibilities. As mentioned above, balloon incentives require third parties to perform to the best of their ability.

Do you feel invested in the growth of your client’s business? If so, are your clients aware? Prove to those you work with that your services are more than a means to an end. Do not be shy about identifying pain points, pointing out areas of improvement, and pitching growth strategies related to your services.

Without losing sight of your current capacity, commit to recognizing new opportunities to expand your role and provide your clients with the best service possible (even for services they did not realize they needed).

Recognizing Your Value

Ultimately, if the services you provide for your clients are significant to result in consistent revenue, you possess a stake in their future. We are all aware that money is tight, and the market is shaky. Many businesses want to play it safe, but now is the time to make yourself known and remind your clients how much they rely on your services. So, suppose you do not communicate your desires and express the necessity of your work. In that case, you may miss out on receiving the contingent business income you are responsible for creating on behalf of your clients.

Need further guidance on working with clients, developing growth strategies, and advocating for better compensation? Contact our office today for more information on how our team can help identify your unique value and achieve your business goals. Call Sebastian Lane Consulting at 443-534-6783 or email us at jesse@sebastianlaneconsulting.com.

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