Paid Discovery for Agencies: When to Charge for It and How to Sell It

At Foundry, the agency I ran as President, everything started with a workshop. The workshop was the first thing we sold a new client, and it had a fee.

Paid discovery is a small, fixed-price first project. The agency studies the client's problem and hands over findings and a plan before the client commits to the full project.

Make paid discovery one fixed-price piece of work, named for what the client keeps and priced on the work it takes. You can credit the fee toward the full project if the client signs by a date you set. End the discovery with one meeting where you present the findings and your proposal together, with every person who has to approve the project on the call.

When should an agency charge for discovery?

Charge for discovery when the proposal depends on work you haven't done yet, like audits, interviews or research into the client's market. If you can write the proposal from what you learned in the sales conversation, write it for free.

Startups used to bring me workflows drawn in Visio and ask what it would cost to build them, and my answer was always the same: a product that has never been built can't be priced from a drawing. Those startups bought a discovery first, and we priced the build after it. Guessing at the price of an unbuilt product is how scope creep starts.

Skip the paid step when the work is routine or you've done the same project for this client before. Skip paid discovery too when a client you know well wants to go straight to the project and you already have what you need to price it. Requiring discovery on a job you could scope from one call bills the client for your sales process.

What can you give away before a client pays?

Even on deals where you charge for discovery, the sales call stays free.

Give away your thinking and your time on the sales call. Answer the client's questions and tell them what you'd do, including a rough price range. Charge for the documents a client can act on without you, like the audit or the written scope.

I give away a lot of advice, and I still won't do the work for free. I think free work sets a precedent: clients get used to it quickly, and the ones who hire you afterward assume you're cheap.

One sharp observation in a proposal is fine. A full plan the client could hand to a cheaper agency is a deliverable, so put a price on it. Selling expertise instead of hours is the bigger shift behind charging for discovery, and paid discovery is often the first invoice it produces.

Why do clients push back on paying for discovery?

Some clients object to paying for discovery at all. Matchstick, a law firm that writes agency contracts, notes two objections: the client thinks it can't afford discovery, or thinks discovery will raise the total cost of the job. Matchstick's advice is to sell discovery on the certainty it brings to the project.

Clients can also push back on the name of the first phase. At Foundry, the workshop drew some pushback early on, so we renamed our first phase the design phase. The renamed design phase still had a fee.

Give the first phase a name that says what the client walks away with, such as a roadmap, a technical plan or a prototype. A name that describes the deliverable tells the buyer what they're paying for before you explain anything.

What should a paid discovery include?

A paid discovery needs one fixed scope, one fixed price and a deliverable the client could act on without you. The client is paying to find out what they need, and they want to keep the answer whether or not you get the project.

Here's what a client kept from Foundry's design phase:

• Workshop findings that covered problems they hadn't brought to us.
• A prototype of what we proposed to build.
• A plan for the project that would follow.

Matchstick lists what a discovery agreement should cover:

• Payment of the fee in advance.
• An estimated schedule.
• Client cooperation in making staff and services available.
• A client right to end the work at any time without a refund.
• Client freedom to use the discovery deliverables internally or with another agency.
• A requirement to sign your full master services agreement and a detailed statement of work if the client hires you for the full project.

Keep the shape of your discovery the same for every client and let the findings change. A standard discovery is easier to price, and someone else on your team can run it when you're booked.

Offer one discovery with no options. Options belong in the project proposal that comes after the discovery.

How much should an agency charge for paid discovery?

Price paid discovery as its own fixed fee, based on the work it takes: the sessions, the research and the plan your team will produce. Set the fee at a level your client contact can approve without a long internal review.

When the larger project is still uncertain, price the discovery on its own work. A share of a project that hasn't been scoped yet is a guess, and the discovery exists to replace that guess.

Take payment up front, as Matchstick recommends. Crediting the discovery fee toward the full project is optional. If you offer the credit, make it conditional on the client signing by a date stated in the discovery agreement.

Price the full project that follows on whichever agency pricing model fits it.

When should you offer paid discovery in the sale?

Offer paid discovery when the client wants the project and is still unsure what it should include. The natural point is right after you've given a price range, since a paid first step is how you narrow that range to the right answer. Offer paid discovery earlier if the client admits they don't understand their own problem.

Many clients arrive with their own diagnosis, and that diagnosis can miss part of the problem. A software client came to us at Foundry because half the people who started signing up quit before they finished. We ran a quick workshop on the drop-off. The sign-up flow was one problem. Another was that people wanted to sign in with their Google account, and the product didn't offer it. A proposal written straight from the first call would have scoped only the sign-up flow the client asked about.

Keep your request for a paid discovery short. "Depending on what we find, this is either the smaller version of the project or the bigger one. A first phase where we review your analytics and talk to your sales team tells us which version you need."

How do you turn paid discovery into the full project?

Treat the readout, the meeting where you present what discovery found, as your closing meeting. Bring the proposal for the full project to the readout.

Before discovery starts, get the readout on the calendar of every person who has to approve the project.

Clients use discovery to see how your team works, so staff it like your most important project. Discovery is also where you learn what the result is worth to the client, and value-based pricing can't work without that.

Discovery also lets both sides walk away early. At Foundry we used the workshop to see how a client viewed us. If a client wanted a vendor to take orders, we could both step back before the big contract without embarrassing anyone.

How do you start charging existing clients for strategy you used to give away?

In my experience, charging existing clients for advice they've been getting free inside delivery is much harder than charging new clients.

Start with new clients, who have never received your strategy advice for free. With existing clients, introduce the paid phase at the start of their next new project, where a first phase is a normal part of the work. Keep answering their questions on calls for free, and charge when the answer becomes a document they would otherwise have to commission.

Does paid discovery win more work?

I haven't seen a reliable measure of how much paid discovery raises win rates.

In my experience, paid discovery works best as a closing tool inside a sale that's already under way, because it gives a buyer who already wants to work with you a smaller, safer first step. Finding buyers who already want to work with you is a separate job.

Getting the first phase right is part of the pricing work I do with agency owners.