Monthly Archives: July 2014

Professional Development , , , , 3 Comments

Listen and Learn

by

“We have two ears and one tongue so that we would listen more and talk less.”   –Diogenes

We love the sound of our own voice,  so much so that we sometimes don’t know when to shut up.   Talking is lots of fun,  especially for the extroverts among us.  Silence can be uncomfortable.   But we all know that listening is an important communication skill.  When we allow others to express themselves and tell their story,  we demonstrate that we care about them and that we value the quality of the information that they are sharing.

The benefits of good listening skills are significant.  Everyone loves a good listener and one invariably learns a lot by listening,  including who is worth listening to!  People will open up and sometimes say the darndest things and all we have to do is be there and show that we are paying attention.  It is ironic that saying and  (mostly)  doing nothing is such a vital component of relationship-building.  Yet listening is the foundation of bonding;  silently,  one demonstrates empathy,  telegraphs that another human being matters and creates rapport.  Fortunately,  the art of listening can be learned.

Attention, please

When listening,  give the speaker your undivided attention.  Nothing else demonstrates the level of respect that you have for another than this one act.  Let the phone go to voicemail,  close the laptop lid.   Sharing your valuable time with another and focusing your attention on that individual is so validating.  It is also a defining element of charisma.  Charismatic people are known to make whomever they are listening to feel as if only the two of them are in the room.   Demonstrate your laser focus with eye contact,   smiling or showing concern,  nodding your head and declining to interrupt,  except to ask a question or two that ensures that you understand what is being said.

Risk acknowledgement

As noted above,  when people start talking,   you might be floored by what is revealed.   No matter how you feel about what has been said,   maintain your cool.   Show that you are worthy of the trust that has been extended to you by way of the revelation.   Appreciate and acknowledge the risk that was taken by the speaker when the decision was made to confide in you.

Take notes

Always take notes when in a business meeting.   When you write as someone talks,  you demonstrate that the subject of the conversation is important to you.  The note-taking process also allows you to ask questions to ensure that you understand what has been said.  Within 24 hours,  send an email in which you thank that individual for meeting with you and confirm the agreed-upon next steps.

Achieve understanding

Stephen Covey (1932-2012),  author of the timeless self-help classic The Seven Habits of Highly Effective People  (1989),  noted that most people listen not to understand,  but to reply.  Be careful not to jump to conclusions or hear only what you want or expect to hear.  Perfect the art of listening and minimize miscommunication problems that can lead to costly mistakes or hurt feelings.

Listening is an art form that unfortunately,  is underrated.  Regardless,  the most compelling leaders,  the most successful sales professionals,  the most powerful negotiators,  the most charismatic people and those with whom we develop the most satisfying relationships are all active listeners.   Follow the advice of Diogenes and sharpen your listening skills by employing patience and self-discipline to your business and social conversations.

Thanks for reading,

Kim

Professional Development , , , Leave a comment

A Sponsor To Propel You Forward

by

At almost every stage in life we can benefit from a mentor,  a special friend who has walked the road ahead of us and is willing to help us along by suggesting strategies for creating a successful journey,  choosing an alternate path,  or overcoming roadblocks.  Mentors encourage us,  challenge us,  guide and advise us.  They help us to recognize and evaluate career opportunities and consider the likely outcomes and consequences of our choices.

But when it’s time to move forward on goals,  one needs a different kind of relationship.  To shift into execution mode one needs a super-mentor,  a sponsor,  a well-connected advocate who believes in you and your potential.  Sponsors are influential and powerful people who have the clout to open doors,   make connections and recommend you for plum assignments and promotions.  They take an interest in you and your career,  but their chief role is to develop you as a leader,  a leader who will become an ally.  A sponsor sees furthering your professional success as a way to further their own and to give themselves bragging rights when you succeed.  Mentors prepare you to make a move; sponsors make it possible for you to realize your goals.

When considering who might make a good sponsor for you,  do not look for a role model to admire and emulate.  Look instead for a powerfully positioned rainmaker.  You seek not so much a friend,  as an ally.  Next,  make a brutally honest calculation of the value-added you can offer to your prospective sponsor.  Very rarely will a sponsor go out on a limb and call in favors to advance the cause of another without a powerful incentive,  which can be acting as the backer of someone who shows the ability to climb to the top.  This is a quid pro quo strategic alliance.  To attract a sponsor to open doors for you,  make that individual proud to be affiliated with you.  Exceed expectations,  meet deadlines,  hit a home run every time.  Furthermore,  you must be unfailingly loyal to your sponsor.  When he/she needs backup,   you are the first to stand up and deliver the ROI.

Where might a Freelance consultant find a sponsor?  Network in places where powerful people congregate.   Get involved with activities and work yourself up to earning a leadership role,  where your prospective sponsor can witness your enterprising ways,  ability to motivate and work with a team and ability to get things done.  A not-for-profit organization board,  fitness center or yoga studio,  or place of worship are all good networking venues.

Separate yourself from the pack by honing your communication skills.  Learn to excel in verbal communications,  interpersonal relationships and rapport building;  give excellent presentations;  sharpen your writing skills;  show empathy,  good humor and a willingness to collaborate.  People think that those who communicate exceptionally well are good leaders and smart (whether or not that is the case).  When you’ve identified prospective sponsors (there can be more than one),  work on developing a relationship and allow it to grow organically.

Time will be involved and much will depend upon mutual trust that develops and the boundaries of your prospect.  The clock may be ticking on your plans,  but if you are perceived as pushy,  the relationship will be lost forever.  What you want are opportunities to talk,  so you can let this individual know what you’d like to do.  You can even state that you’re looking for help.  The prospect will either offer the help,  or will not.  If that person does not come through,  either he/she has no influence in that realm,  or would rather not risk extending it to you.  Your prospective sponsor either values you or does not.

Tribalism matters.  Mentors and sponsors tend to bond with those who remind them of themselves and relationships often form within gender,  racial,  ethnic or religious categories.  Your communication skills,  when honed as advised above,  may help you to transcend boundaries.   Also,  in our increasingly global society,  your sponsor may decide that diversity will be advantageous when cultivating allies.

Thanks for reading,

Kim

Sales , , , Leave a comment

Proposal Writing Primer

by

Periodically,  a Freelance consultant must write a proposal.  Some organizations,  especially government entities,  will publicly announce that a project is available and request bids that must be submitted in proposal form.  Occasionally,  one may receive a direct request for a proposal  (RFP)  from an unknown party.  Experience will eventually teach you to not respond to a surprise RFP.  Invariably,  an unexpected RFP is sent by a phantom client who is either fishing for pricing information,  or seeking to obtain additional proposals when it has already been decided who will be hired for the project in question,  but company policy mandates that a certain number of proposals must be reviewed.

Submit proposals only after you’ve spoken with the decision-maker and received an invitation.  If you’ve set it up right,  the proposal will serve as a confirmation letter that spells out project details that have been previously discussed and agreed-upon.  See my March 26, 2013 post on unsolicited RFPs  https://freelancetheconsultantsdiary.wordpress.com/2013/03/26/the-unexpected-rfp/.

A proper invitation to write a proposal is an opportunity for you to shine.  Showcase yourself,  your brand and your expertise and write a powerful document that reveals your analytic ability,  writing ability,  practicality and creativity.

Study the requirements

If there is a written RFP,  study the requirements and make note of the submission deadline.  Is the project a good fit for your organization?  Do you have time to write a worthy proposal? If you meet with the client to discuss the project,  take good notes and confirm that you understand the goals,  specifications and expectations involved.  Do you have the expertise and resources to do the job?  Can you achieve the goals within the time frame?  Can you do the job within the budget?  Must you subcontract work out and if so,  will you be able to make a profit on the project?

Confirm the desired outcomes

Interview the client and confirm the desired and expected outcomes of the project and assess what achieving the project goals means to the organization.

Evaluate your proposed solution

Make sure that your approach to producing the deliverables will please the client.  What is the primary criterion for the proposal?  Is it speed of completion,  price,  or something else?  Present a methodology that reflects what means most to the client.

Outshine competitors

Be advised that a proposal is a sales document.  Highlight your strengths in the context of project goals and address any potential reservations that might prevent your proposal from being accepted.

Proposal must-haves

Some proposals specify that a certain format must be followed.  If there is no such rule,  include the following elements:

  • Give an overview of the current situation that has given rise to the need for the project.
  • State the goals of the project,  expected outcomes or deliverables.
  • Describe why you and your organization are uniquely qualified to successfully complete the project.
  • Describe your proposed methodology for achieving the aims of the project.
  • Explain the timeline and cost  (the justification of your proposed fee).
  • Describe the benefits associated with achieving the project goals,  outcomes,  or deliverables.

Finally,  make sure that your proposal addresses all elements of the RFP or client needs.   Check your spelling and grammar.  Go on-line and view examples of proposals;  find a format that visually communicates you and your brand and make that your template .  If hard copy must be submitted,   print your document on good paper stock.

Thanks for reading,

Kim

 

 

 

Marketing , , , , Leave a comment

The Break-Even Analysis: Find the Pricing Sweet Spot

by

To continue the topic of pricing,  in this case pricing a new product or service,  it is a must to know when fixed costs will be covered by unit sales at a given price and determine when in time the item or service breaks into profitability.  Performing a break-even analysis will reveal how many units must be sold,  or how many times the workshop must be delivered,  at a given price,  before production costs are behind you.  Integral to that question is unit selling price.  Costs are recouped faster when selling at $100.00 rather than $50.00.  Also related to pricing is what customers expect and agree to pay.  Appropriate pricing can increase profits faster than increasing sales volume.  One can sell fewer items and make more money per item.  Conducting a break-even analysis is Step 1 in locating your ideal price range.  Here’s the Break Even Volume (BEV) formula:

Fixed costs                                                      Fixed costs

BEV     = ______________________________        =         __________

Revenue per unit – Variable cost per unit                         Unit margin

Let’s add some numbers to the formula and assume that the fixed costs associated with delivery of your service is $5, 500.00: $1,700.00 went to the graphic artist for Power Point slides; $1,300.00 paid to the wordsmithing wizard for marketing collaterals used for promoting the service; and $2,500.00 for the wholesale value of your labor,  the time you spent crafting the intangible service.  These costs are fixed because they will not change,  no matter how many times the service will be delivered.  Variable costs associated with service delivery would be printing hand-outs for participants ($50.00) and the advertisement placed in an industry newsletter read by the target audience ($400.00),  meaning that the unit variable cost =$450.00.  If the service is priced at $750.00,  the profit,  or unit margin,  is $300.00 each time the service is delivered at that price.

$5,500.00

BEV     =        _________     =   18.33

$300.00/unit

At a per unit price of $750.00,  the service must be delivered 18+ times before a profit will be made.  From there,  a series of  “what if”  scenarios can be floated.  Chiefly,  what are competitors charging or is there a spike in demand that makes the product more valuable and can you increase the price?  Also,  can you lower fixed costs and obtain graphics services for a couple of hundred dollars less?  What if the marketing collaterals text was produced in-house by you and not outsourced?  How much will that increase the price of the time you spent developing the service,  another fixed cost?

Let’s say that you find graphics services for $1,500.00 and ask a marketing communications wizard to edit text that you write yourself for $800.00 (your personal labor increases: 6 hours writing at $50.00/hour = $300.00 + $2,500.00 = $2, 800.00).  Now,  the fixed cost is $5,100.00 and you think that $950.00 is a price that clients just might accept.  The variable costs will remain unchanged at $450.00,  because your printer is good,  his price is right and you’ll definitely need to advertise since you may want to charge more for the service.  At a unit price of $950.00,  the unit margin would be $500.00.   As shown,  by raising the price of the service by $200.00,  fixed costs are covered by delivering the goods 10+ times,  rather than 18+ times.

$5,100.00

BEV=             ________      =   10.2

$500.00/unit

As you can see,  the impact of other values such as increased advertising or higher quality materials or labor,  can also be assessed for impact on the pricing sweet spot and timeline for reaching BEV.  When bringing a new product or service to market,  take steps to identify the ideal pricing structure.

It is also useful to calculate the profit margin,  that is the percentage of sales revenues retained after all expenses are paid,  for each product and for the total line.  From the P & L Statement,  divide net profits by total sales revenues  (bottom line divided by top line).

 

Thanks for reading,

Kim

expert_author_1

 

 

Survival Strategies , , , , , 2 Comments

The Less Than Zero Pricing Tactic

by

Psychology counts when pricing a product or service.  Take note that in every store,  the price of items always ends in .99,  .98,  or .95 and never .00.  Number psychology research has persuasively shown that buyers do not like zeros.  Stores do not sell items for $100.00,  they sell them for $99.95,  because customers associate zeros with premium prices that they’d rather not pay.

Furthermore,  the phenomenon called the left digit effect causes our brains to misinterpret that $99.95 as having a value closer to $99.00,  instead of $100.00.  Lindsay van Thoen,  columnist for The Freelancer’s Union,  says that our clients are like any other consumer and Freelance consultants should bear that in mind when pricing contract proposals.

When we are invited to submit a proposal,  we are all excited.  Here comes money!  The last thing we want to do is to wind up in a wrestling match with a client who wants to nickel and dime.  We take pains to itemize the major components of the project and provide the rationale for the total project fee.  Nevertheless,  haggling may ensue.  According to van Thoen,  Freelancers are wise to follow the lead of retailers,  cut the zeros from our proposals and make it easier for clients to agree to our price.  Resist the temptation to price your project at $5,000.00.  Instead,  price the project at $4825.00 or $5175.00.

Unfortunately,  clients sometimes feel that Freelance consultants pad price quotes,  even when an itemized accounting is provided.  A figure that does not appear to be rounded-off,  but appears to be specifically customized to the service requested and contains few zeros that may imply that we’ve  “rounded-up”  the fee,  can be more trust-inspiring and believable to certain clients.

Other ways to make it more palatable for clients to accept our proposals are to  1.) Ask the client for the project budget and work with them to provide services that you can afford to provide within that valuation and  2.) Provide three levels of service: good,  better and best,  so that clients can choose services according to needs and budget.

Pricing pundit Rafi Mohammed,  founder and CEO of the consulting firm Pricing for Profit in Cambridge, MA,  offers two valuable pieces of advice to keep in mind about pricing.  First,  prices must reflect the value that clients place on the service.  Second,  different clients place different value on a given service.  Offering  “good, better,  best”  options allows the client’s need for the service to be met in a way that is in line with the value placed.  A good pricing strategy is an important part of your marketing plan.  It sets the stage for building a profitable enterprise.  It is imperative to set prices that reflect the client’s value of what we sell and,  equally important,  to help the client perceive that listed prices are trustworthy.

Happy 4th of July!

Thanks for reading,

Kim