Monthly Archives: October 2024

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Freelance or Fractional?

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What’s the newest growth niche on the horizon for professionals who work independently? Voices in the echoverse are buzzing about an innovative hiring model that has the potential to offer exciting work opportunities to highly skilled Freelancers and other self-employed professionals. This undeniably practical, and revolutionary, hiring model is called fractional.

You may have heard the term a couple of times over the past year or so, but never checked out the backstory? Know that talk of recruiting fractional, that is, interim, talent to guide (often start-up) companies in need of specialized expertise is capturing the attention of more decision-makers every month and urging Freelancers, et al. to consider the fractional work sector. For those with the required skill set, there may be interesting and challenging, possibly high-profile, and lucrative assignments for which you would make a good candidate.

What drives fractional?

Fractional work has joined the gig economy, enabling businesses to access C-Suite level talent on a short-term basis when urgent projects require a complex or sophisticated solution. That business leaders are able to eliminate the considerable costs associated with hiring a full-time senior level employee, a process that typically involves a lengthy candidate search and several interviews, followed by salary and benefits package negotiations, aligns with business practices that start-up funders and business lenders prefer.

Business leaders like keeping payrolls lean, a solution that became fashionable in the late 1980s (and shows no signs of abating). Turning to temporary talent sources, i.e., Freelance professionals and fractional executives, allows CEOs to strategically hire for specific projects without incurring burdensome expenses. Fractional employee expert Abby Sugar sums up the prevailing opinion, “You get to have a high-level strategic executive thinker that you might not need on a daily basis.” She continues, “You don’t need to be paying a super-high monthly salary for somebody if you’re not that large yet and so you need a higher-level person to help you strategically execute and bring on a fractional COO (Chief Operating Officer) instead of a lower-level person at a low hourly rate.”

Ms. Sugar’s observation is further demonstrated by the appearance of fractional Chief Marketing Officers who are now an increasing presence in start-up havens like Austin, TX and Silicon Valley, CA. According to Chief Outsiders, a leading company that places fractional CMOs into well-funded start-ups, there’s been a 38% jump in demand for fractional CMOs in the past year; the Association of Professional Executives in Marketing and Sales predicts the demand for fractional CMOs will grow by another 20% in the next five years. Below are comparisons between working as a fractional executive and a Freelance professional.

Typical work projects

  • Fractional: Fractional executives fill a specific business need on an ongoing basis, e,g., six months or more, but as a part-time commitment. Fractional execs are known to take on strategic roles, mission-critical tasks and projects that require working closely with the hiring company team. For example, a fractional CMO may be hired to develop and execute marketing strategy and contracted to work a certain number of hours per week. Unlike Freelancers, fractional workers often become a de-facto part of organization staff and integrated into company culture. 
  • Freelance: Freelancers are hired to complete specific, project-based tasks that are sometimes ongoing, e.g., producing a monthly newsletter or managing social media accounts, and at other times short-term, e.g., designing a website or planning a company meeting or other event. Freelance projects generally top out at mid-level complexity and unlike fractional execs, Freelancers generally do not become immersed in the company’s functioning, culture, or values.

Typical expertise level

  • Fractional: Fractional hires are C-Suite level executives, experienced professionals with a proven track record in their field. They bring considerable knowledge and expertise to the table and can be expected to produce the desired outcomes. In fact, they can be a game-changer for start-ups and companies executing a turn-around. Services like Upwork, the previously mentioned Chief Outsiders and others connect companies, often start-ups or those involved in a scale or turn-around, with seasoned executives who provide specialized skills and leadership experience on a part-time or per-project basis. Fractional execs can be a cost-effective way to access the expertise a CEO needs to achieve specific goals while avoiding the costs of hiring a full-time employee.
  • Freelance: Freelance professionals also may have been C-Suite executives, or they may have reached manager level, and own the skills needed to successfully take on complex work assignments. Others are highly skilled and results-oriented as well, but more suited to less complex, but nevertheless strategic, mission-critical assignments. Freelance professionals may have gained experience in a particular niche, or they may be generalists who expertly perform any number of tasks.

The emergence of companies that welcome Freelance and fractional workers demonstrates the resilience of the gig economy. Now, talented professionals who’ve developed specialized skills at either a senior or junior level, and are hungry to experience working in different industries or environments, can work on a per-project basis and monetize their expertise as they take on important assignments that challenge and excite.

Thanks for reading,

Kim

Image: ©HGTV. Jonathan (L) and Drew Scott, The Property Brothers on season 7 (2020) Brother v. Brother

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What’s Your LinkedIn SSI Score?

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Since its launch in 2003, LinkedIn has become the go-to social media platform for professionals, hosting 900 million members worldwide as of 2024, about half of whom log on at least once a month. Joining and being active on LinkedIn is now a commonplace strategy, used by Freelance and traditionally employed professionals to enhance personal brand and advance business or career ambitions. Establishing connections with peers, potential mentors, prospective clients, or possible employers whom you’ve had the savvy and good fortune to meet and interact with, is the primary benefit of the LinkedIn experience.

Connections are not the only factor that pay dividends to those who actively participate on the platform. Nearly as powerful is the content posted, that usually consists of articles or blog posts you’ve written, announcement of awards you’ve won or professional development seminars you’ve attended, and/or insights you’ve shared when commenting on content posted by others. Content posted on LinkedIn contributes to establishing, and often enhancing, your professional and personal brand and expands your credibility beyond the orbit of first degree and other connections and into the broader LinkedIn community.

So, if you’re not active on LinkedIn, you may risk leaving brand-building and business or career growth opportunities on the table. But beyond receiving likes, the social media equivalent of air kisses, how do you know if your target audience feels your posts and comments are meaningful? Moreover, how do you stack up against industry peers and other connections in your network? Those questions can be answered in a LinkedIn user metric you may not know exists—the Social Selling Index (SSI) Score.

The SSI Score defined

The LinkedIn Social Selling Index Score was developed in 2014, after LinkedIn honchos decided to identify members who seemed to be killing it on the platform and figuring out how they did it. In 2015, SSI became part of LinkedIn Sales Navigator, a paid feature, but SSI is now available to all with a LinkedIn account. The SSI is a formula that evaluates social selling performance and measures mastery of what LinkedIn considers the core competencies of social selling on the platform.

The SSI gauges member success in demonstrating four social selling core competencies: establishing a professional brand, initiating communication with prospective connections and collaborators, engaging in valuable conversations and building high-quality relationships. For each competency, members are awarded between 0 and 25 points; the SSI Score is the sum of the individual scores from each core competency. The sum total of the core competency scores is also compared to the scores of others in your industry—and LinkedIn always assumes you’re in sales. That said, the higher your SSI Score, the more influential your LinkedIn profile becomes.

  • Establishing professional brand. This competency consists of two elements—the completeness of your LinkedIn profile and the quality of your posted content. The more detailed your profile and the more valuable your content, the higher your SSI Score.
    • LinkedIn confirms the presence of a profile photo, detailed job history and educational background, plus the number of recommendations you’ve made and received.
    • LinkedIn calculates the number of posts you publish and how many likes and comments your posts receive.
  • Connecting with the right people. This metric is connected to Sales Navigator and it may be challenging for members of free LinkedIn to obtain a good score in this component. It’s no surprise that LinkedIn prefers members to use the paid tools when searching for new connections.
    • When members connect with or contact the right person—for example, someone with a C-Suite job title that usually indicates a decision-maker—it is assumed that the member is now better positioned to make a sale, win a client, or otherwise make a tangible improvement to one’s business or career.
  • Engaging by sharing insights. Sharing valuable content increases the SSI Score awarded in this category. The more valuable content that’s posted and the more comments and likes that shared content receives, the better the score awarded and the closer a member becomes to earning Thought Leader status.
  • Building relationships. This metric evaluates a member’s motivation to stay in touch with connections. It reflects how often members reach out to connections and other contacts and measures how effective that outreach is—meaning, if the message does not receive a reply, the LinkedIn SSI Score will be negatively impacted.

Benefits of a high SSI Score

The SSI Score is considered to be a comprehensive measure of social selling prowess, meaning that a high score is considered demonstration of a member’s understanding and optimal utilization of the platform. LinkedIn views a high SSI Score in the way airlines view frequent flier miles, as a gateway to desirable perks. A high SSI Score can enhance your online reputation with the gift of increased visibility, a powerful benefit that drives name recognition and brand awareness as it promotes trust and credibility. The halo of credibility can lead to more positive responses to your networking inquiries and, theoretically, result in more and higher-quality opportunities for collaborations or exploring business ventures.

But does the SSI Score actually translate into tangible business results? Maybe—you’d expect LinkedIn to claim that a high SSI Score correlates with business success. LinkedIn reports that the higher your SSI Score, the more likely you are to achieve your sales targets, for example. LinkedIn says that an analysis of platform members who’ve received a high SSI Score will on average receive 45% more sales opportunities than those with lower scores and they’ll win 78% more sales deals than peers who are not active on social media. According to a joint study by LinkedIn and Richard Edelman, CEO of the global communications firm Edelman, 58% of business leaders are willing to buy from an industry expert and/or thought leader and they are willing to pay more, as they feel they’ll receive premium service.

  1. Lead generation. Allegedly, those who’ve earned a high SSI Score are 45% more likely to exceed their sales quota because they are adept at identifying and engaging with, the right contacts. The strategy is known to result in more productive leadgen.
  2. Sales. According to LinkedIn, those with an SSI Score above 70 outperform their peers and achieve 45% more sales opportunities than those with low scores.
  3. Brand awareness. A high SSI Score typically results in the reward of increased visibility for your content, leading to increased brand awareness and recognition in your industry.
  4. Trust-building. A high SSI Score enhances credibility, a trust-building factor that can make a difference for B2B professionals, where relationships and reputations play a significant role in decision-making.
  5. Optimized visibility. LinkedIn’s algorithm favors those who utilize its platform effectively. A higher SSI Score usually results in enhanced visibility for your posted content, opening the door to increased engagement with your connections and other contacts.

Monitoring your SSI Score is likely to motivate you to make the most of platform benefits—seeking strategically savvy connection requests as a way to maximize leadgen or business collaborations, positioning yourself as an industry Thought Leader and building your brand and credibility and working to increase your exposure by verifying that your content is relevant to your target audience. To learn your SSI Score, log onto LinkedIn and then click on this link. If you’re part of Sales Navigator, go to “Admin“ and click “User Report.”

While you’re logged onto LinkedIn, review your profile and consider what you might add—do you have a profile picture? Have you earned a professional certificate, or taken a skills-building course, that you never acknowledged in your profile? If so, add that accomplishment to the Licenses & Certifications section of your profile; if you received a certificate, scan and upload. Oh, and if you serve on a board or participate in other volunteer work, include your philanthropic and social responsibility commitments as well. Whether or not boosting your SSI Score is meaningful to you, remember that the purpose of joining LinkedIn is to display your professional bona fides.

Also, when’s the last time you made or received a recommendation? You can get the ball rolling by making a recommendation for a colleague and asking for the favor to be returned with a recommendation for yourself. While we’re on the subject of colleagues, take a tour through the extensive list of LinkedIn groups and figure out if there’s a new one you might join; if you’re already listed in a group or two, scroll through the content to get an update on the threads and see where you might be able to make a relevant comment, or ask a question. Giving a boost to your SSI Score is not labor intensive, but it does require some strategic thinking. It’s time to get busy!

Thanks for reading,

Kim

Image: © Susan Walsh/Associated Press. The co-champions of the 2019 Scripps National Spelling Bee.

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How to Scale Your B2B Services Company

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Independent and ambitious Freelancers, like other business owners, are inclined to brainstorm strategies and tactics that may have the potential to increase their company’s revenue and profit. Central to the entrepreneurial dream is building an entity that attains success as you define it and that often entails making money. But as with all business decisions, it’s necessary to determine which strategy and tactics have the greatest likelihood to reach the pot of gold. As always, the most reliable way to answer that question is to conduct comprehensive marketplace research and examine your company’s key performance indicators.

Grow, scale, or expand?

It is imperative that you recognize which KPIs point to a particular revenue and profit boosting strategy and give you the confidence to follow that solution. To earn more revenue and become more profitable, there are three options—expand, grow, or scale. Each strategy requires certain marketplace conditions and financial and other resources and carries its own kind of risk.

Expansion is a much bigger investment, especially for Freelance professionals, who typically operate a service business, work alone and deliver the service yourself. Launching your operation in a new location typically places a significant demand on financial and logistical capabilities, making growth or scaling, which both entail relatively fewer demands on resources, more accessible to Freelancers.

OK, so how can you recognize which option makes more sense for you? First, let’s know what we’re talking about. Many business owners and Freelancers misunderstand the meanings of growth and scale, so let’s take a sidebar and examine their definitions. Growth means adding more projects, new services and/or signing additional clients as the engine of your strategy to boost revenue and profit—activities that mostly entail more expenses. Scale focuses on increasing revenue and profit without significantly increasing the associated production costs. Essentially, scaling means working smarter, not just harder, and aligns well with the financial and logistical capabilities of the typical Freelance professional.

Nevertheless, scaling a business, particularly a small, service-based company, will require extensive preparation and a well-designed strategy to make it work. To evaluate the possibility of scaling your operation, you’ll dive into company KPIs and conduct an extensive financial analysis, marketplace research and strategic planning. Data-driven decision-making will yield the most trustworthy information and outcomes.

Furthermore, when contemplating your scale, or any other significant business investment, as you study the data, contact your business accountant, who is familiar with your financial situation and is positioned to be your Sherpa and guide you as you climb (scale!) the mountain. There are a couple of obvious questions that you should address before calling the accountant.

  • So, how’s business? Are clients lining up to do business with you? Are you meeting, if not exceeding, your revenue targets? How many clients are on your roster? If business is off the chain, then get your accountant on the phone and share the good news. However, if you’re merely pleased with your performance metrics, set higher goals and observe what happens during the next two or three quarters. if you surpass those metrics by an impressive margin, it may be time to call the accountant and discuss next steps.
  • Client feedback Listening to what clients observe or experience can steer your business toward success and it’s good business to invite them to give their perspective. Invite clients to share their thoughts and suggestions regarding your services. Client insights may open your eyes to add-ons, upgrades and/or new services you can provide and what they tell you could contribute substantially to your scale. Make giving feedback convenient by occasionally including surveys in marketing emails, soliciting online reviews, maintaining an active presence on social media, or making yourself available for in-person conversations. Your objective is to hear and assess what clients say about your services, company and the customer experience you provide. You can use their feedback to better understand what clients like, what you can do better and get early warnings of emerging trends and how your clients feel about what’s on the horizon. With this knowledge, you can tailor your services to meet this demand and strengthen your positioning as a go-to provider in the industry, whether or not you decide to scale.

Use data to evaluate a potential scale

Analyzing and interpreting company performance data will do more than answer the expand, grow, or scale question. KPIs will also spotlight company strengths and weaknesses, help you recognize competitive advantages and call your attention to gaps that limit progress and need fixing. With the help of your accountant, your KPI data analysis will also indicate the overhead expenses, staffing and other resources, so that a realistic budget can be developed.

Moreover, your analytics tools can build reliable data-driven sales forecasts for the proposed scale that will include the number of new clients needed, average billable hours/ hourly rate and sales revenue you must generate within a particular time frame. BTW, if you were wondering when and how to incorporate AI into business operations, evaluating a potential scale could be your motivation.

Find your money-making niche

Turn to marketplace and industry data to point you to a niche you might enter. You might also consider how you to diversify your current service line? In either scenario, consult your data projections to suggest whether client price tolerance will allow you to achieve a profit margin that covers the expense of delivering at scale. Competitive intel is also likely to be useful; for example, there may be few competitors in certain market segments because there’s no money to be made. Once you’ve learned where the opportunities are, you can start making changes to scale successfully.

Upgrade marketing and branding

Build up company visibility and reputation with robust marketing and branding. Sharpen your marketing messages and establish a presence on inbound and outbound marketing channels that are a fit for your services. Search Engine Optimization, social media and content marketing should be especially useful. Nearly half of all clicks on search engines come from organic searches, which suggests that prospects are more likely to trust the results they find naturally.

Your marketing and branding strategies will also be more impactful when guided by data. By analyzing metrics such as website traffic, conversion rates and client engagement, you’ll be likely to discover actionable insights that may shape marketing strategies and campaigns that produce the results you need.

Standardize service delivery, invest in automation

Scaling a service-based business requires being able to deliver those services in the same way, every time. A strategy that will both save time and ensure that your profit margin is sufficient to cover the expense of delivering at scale is to package your services as a menu of products and eliminate the need for you to customize every order. Next, create standard operating procedures to ensure quality, efficiency and consistency in how your services are delivered. Map the step-by-step workflow, provide written or video instructions for clients and if applicable, ensure that your team is trained on best practices, so that clients will receive the same excellent results every time.

With a service-based business it is you, Freelancer friend, perhaps assisted by a team member, who will provide your services. In order to scale, you must develop and perfect turn-key, streamlined processes that allow you to work with the number of clients necessary to realize the scale. From your client onboarding procedure to billing and invoicing, automation will make your organization more efficient, appear more professional, inspire trust and build your brand at every touch point. Not only that, you’ll have more time to focus on improving your business and optimizing the scale.

Thanks for reading,

Kim

Image: Jack’s First Beanstalk, illustration from Jack and the Beanstalk, a circa 1734 English fairy tale. Author and illustrator unknown.

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States Pass New Laws to Help Freelancers

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According to the 10th annual Upwork survey Freelance Forward, 64 million Americans worked as Freelance professionals in 2023, labor that contributed $1.27 trillion to our national economy. It’s a ringing testament to our talented and ambitious community but unfortunately, 71% of the 3000 survey respondents also reported that they’ve struggled with the frustrating problem of late payment or even non-payment for their work.

The persistent occurrence of payment gaps that Freelancers and other gig workers endure exacts a terrible toll on the ability to live and work. Late payments and, worse still, nonpayment, wreaks havoc on cash-flow and may threaten the maintenance of normal business operations and the ability to plan for the future. When payment for services rendered doesn’t arrive within 30 days after the invoice is sent, the ability to pay bills can be undermined and the problem is exacerbated as the price of everything continues to increase. But for those of you working with clients based in California, Illinois, or the State of New York, things will soon get better.

New state laws protect Freelancers

It is said in legal circles that a contract is only as good as one’s ability to enforce it and that sometimes puts Freelance professionals at risk for exploitation. You seldom have the leverage to adequately defend yourself against unscrupulous clients who ignore their contractual responsibility, written or verbal, and decline to pay on time and in full for appropriately provided services rendered. But in NY State, IL and CA, a new day has dawned. Freelance professionals and gig workers, who are often in a comparatively vulnerable position when entering into work agreements with clients, are celebrating the passage of legislation that puts the force of law into contracts between the independently employed and their clients. The driving force behind the legislative victories was the Freelancers Union, a New York City-based advocacy group that has championed the rights of independent workers since its founding in 1995.

On August 4, 2023, Illinois became the first state in the country to adopt protections for an estimated 1.2 million Freelance workers when Governor J.B. Pritzker signed the Freelance Worker Protection Act, which took effect on July 1, 2024. The Act applies to work agreements between Freelance professionals and “contracting entities,” i.e., clients, in exchange for the Freelance worker’s services valued at $500 or more over a 120-day period. The Illinois Act excludes from the definition of “Freelance worker” any workers performing construction services, or those defined as an employee.

On November 22, 2023, New York Governor Kathy Hochul signed into law the Freelance Isn’t Free Act, groundbreaking legislation intended to shield Freelance consultants and other 1099-NEC workers from the financial damage done by non-paying or slow-paying clients. The Act was created to guarantee that Freelance workers retained as independent contractors who work with clients based in NY state receive timely compensation for all services rendered. The NY law went into effect on August 28, 2024 and some 2 million Freelance workers are expected to benefit from its much-needed legal protections.

In CA, the Freelance Worker Protection Act was signed by Governor Gavin Newsom on September 28th, 2024. As does the IL and NY legislation, the Freelance Worker Protection Act ratified in CA provides legal protection to Freelance professionals and the independently employed who work for clients located in CA. The CA law takes effect on January 1, 2025 and an estimated 2.2 million Freelancers (11.6% of the workforce as of 2022) are expected to benefit. The CA Freelance Worker Protection Act requires written contracts for Freelance services valued at $250 or more when working with clients based in CA. It is now mandated that contracts must outline the scope of work, payment method, deadlines and other important details that ensure transparency and fairness.

Written Contract
Per the Freelance Isn’t Free Act, all contracts pertaining to NY state clients and worth $800 or more must be in writing. This includes all agreements between the Freelancer and the hiring party (client) that total $800 in any 120-day period. The written contract must specify the work the Freelancer is expected to perform; the amount the Freelancer will be paid as compensation for the work; and the date the Freelancer will be paid for the work performed. Both Freelancer and client must keep a copy of the written contract. The NY Department of Consumer and Worker Protection (DCWP) created a model contract [English] that includes the terms required under the law and optional terms that may apply to different work types and arrangements. 

The Illinois Freelance Worker Protection Act requires that contracts for products or services must be in writing, and that the client provide a physical or electronic copy of the contract to the Freelance worker. Contracts must include certain information, such as the name and contact information of both parties (including the client’s mailing address), an itemized list of all products and services to be provided and their value, the rate and method of compensation and the payment date or mechanism by which such date will be determined. The client must retain a copy of the contract for a two-year period.

California’s Freelance Worker Protection Act likewise requires written contracts for Freelance services, when the value of services provided is $250 or more. Contracts must outline the scope of work, payment method, deadlines and other important details, to ensure transparency and fairness.

Timely Payment
In CA, IL and NY, your client is required to pay you for all completed work and you are entitled to receive payment on or before the date that is specified in the contract. If the contract does not specify a payment date, the client must pay you within 30 days after you complete the work.

No Retaliation
In all three states, it is illegal for a hiring party (the client) to penalize, threaten, blacklist, or otherwise deter Freelance workers from exercising their rights under the Freelance Isn’t Free Act or the Freelance Worker Protection Act. Denying an independently employed worker from obtaining future assignments and threatening to take unwarranted legal action against that worker is likewise now illegal. Freelancers who feel they have been targeted for retaliation as a result of pursuing a claim against a nonpaying or slow-paying client can file a complaint with DCWP (NY), or the IL Department of Labor, or in CA at the Labor Commissioner’s Office.

What is Freelance Isn’t Free (NY)?

  • 30-Day Payment Terms. Unless otherwise specified in a contract, clients must pay Freelancers within 30 days of work completion.
  • Mandatory Contracts. Clients must use a contract when hiring a Freelancer for over $800 of work and they can face fines if they refuse to provide one.
  • Payment Agreement Protections. Clients cannot require that Freelancers accept less than they’re owed in exchange for timely payment.
  • Anti-Retaliation. Clients cannot retaliate against a Freelancer for pursuing payment.
  • Legal Assistance. A city agency will investigate, may try to collect on the Freelancer’s behalf and will provide court navigation services if needed.
  • Double Damages. Freelancers can collect double damages and attorney fees in court and repeat offenders can face penalties of up to $25,000.

What is the Freelance Worker Protection Act (IL)?

  • Written Contract Required. A written contract outlining the products and services to be provided, the dates by which services are to be performed, and the rate and method of compensation (sample available online, and free Union contract templates available) 
  • 30-Day Payment. 30-day payment terms, unless otherwise specified in the contract.
  • Payment Agreement Protection. Protection against coercion for faster payment.
  • No Retaliation. Anti-retaliation measures against Freelancers pursuing payment.
  • Enforcement and Legal Remedies. Double damages for non-payment, covering costs and attorney’s fees.

What is the Freelance Worker Protection Act (CA)?

  • Written Contract Requirement. Freelancers must have a written agreement in place for work totaling $250 or more over a 120-day period. The contract must clearly outline the scope of services, deadlines, compensation rates and payment methods.
  • 30-Day Payment Terms. Freelancers are entitled to payment within 30 days of completing their work, unless the contract specifies otherwise. This provision eliminates the uncertainty many Freelancers face when waiting for payment.
  • Anti-Retaliation Protections. Freelancers are protected from any retaliation by hiring entities if they assert their right to fair payment under the law.
  • Enforcement and Legal Remedies. If a client fails to pay, Freelancers can seek legal recourse, including double damages and the recovery of attorney’s fees. Both Freelancers and public prosecutors can file claims to ensure compliance with the law.

Confirm milestones, invoicing, payment format

On your end, Freelancer friend, remember that the importance of providing a pleasantly efficient and smoothly delivered experience for your B2B clients cannot be overstated. Working together is a partnership and the dance is much more enjoyable when each partner understands his/her role. The contract between your company and the client describes and confirms your mutual agreement in a written document, specifying the responsibilities, terms and requirements and payments associated with the working relationship.

Once your hire has been confirmed, schedule a project kick-off meeting and review with your client the scope and timing of project deliverables, plus the associated payments or other payments. Also, include in the kick-off meeting agenda a discussion of the project or product performance goals, client expectations for the product or service you’ll provide and the ideal outcomes expected to be achieved when using your product or implementing your service. You and the client can then discuss how you’ll work together to make the client’s goals and expectations actionable and attainable. If an electronic invoice payment system will be used, ensure that your client sends the payment registration form to you, to promote a timely first payment.

  • Review and confirm project milestones
  • Review and confirm payments triggered when milestones are achieved
  • Review and confirm the invoicing schedule, if milestones are not used
  • Confirm the accepted payment methods—digital, credit/ debit card, check (electronic or physical)
  • Integrate info with your Client Relationship Management software (if applicable) to capture client data
  • Allow clients to view, comment on and sign e-documents

Thanks for reading,

Kim

Image: The Signing of the Treaty of Mortefontaine 30th September 1800 depicts the signing of the agreement that ratified the sale of Louisiana to the U.S. by France. The treaty was signed by Joseph Bonaparte, a diplomat and former ambassador, on behalf of France and Oliver Ellsworth, a framer of the Constitution and Senator from CT, on behalf of the US. Artist: Charles Etienne Pierre Motte

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Help Customers Trust Subscription Pricing

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The mere thought of guaranteed revenue arriving each month like clockwork will bring a smile to the face of every business owner. Recurring revenue is a dream come true; now you’ve got the cash-flow to pay expenses on time and in full. You can replace or upgrade business equipment when necessary. You can invest in professional development that makes you more knowledgeable, and therefore more useful to customers, and more respected in your professional community as well. Recurring revenue enables you to plan for the future of your business with confidence—and sleep well at night.

The leading way to generate recurring revenue is by introducing a subscription payment option to your business. Savvy Freelancers and SMBs are reviewing the buying habits of their best customers to determine if converting certain of their products or services to the subscription model can be successful. In the B2B sector, subscription pricing is a payment option where customers pay a recurring fee, typically monthly or annually, to receive access to a product or service, most often cloud-based software or storage, i.e., software as a service (SaaS). Freelancers and SMBs might offer subscription pricing for coaching, marketing, network and website management, or bookkeeping services.  

Thoughts of a subscription payment plan may make business owners salivate, but the process requires careful thought and planning. You’ve got to get things right from Day One and that is especially true for service-based businesses where value is not always immediately recognized. SaaS subscriptions, network and/or website management and bookkeeping services, on the other hand, have a readily apparent value that customers and prospects can picture themselves needing on a regular basis. For this reason, non-IT related service-based subscriptions may face challenges.

  • Value perception: To establish trust in a subscription payment plan, the business must demonstrate unambiguous value to prospective customers. If the customer begins to feel that s/he is not getting their money’s worth, there will be a risk of service cancellation. 
  • Service enhancements: There’s an ongoing customer expectation to continually sweeten the pot with (free) service upgrades. Global enterprise companies (like credit card companies and banks) can afford this strategy and the expectation has been set. SMBs and Freelancers may struggle to fulfill this wish, however.

Talk up value

Your subscription pricing model and everything related to it must align with the perceived value of what customers get in return. Customers must be able to see and/or believe the value of your product or service, consistently and at every touch point. Your job, Freelancer or SMB owner, is to continuously communicate that value, so customers will understand the benefits they’ll receive when opting-in to the subscription. Only when that is achieved will customer concerns fade and trust in your subscription grow.

Communicating value begins at the introduction of the subscription model sales process; the offer of a free trial will play a pivotal role in building the value you want to demonstrate. A short free trial invites prospective subscription customers to test the product or service, if it is new to them, or experience how subscription pricing can work to their benefit. Businesses acquired 50.0% of subscribers through trials, making it one of the most effective customer acquisition strategies. Additionally, as customization has become a growing preference, add-ons have become an essential part of personalized offers and 28.1% of customers offered add-on options to allow customers to tailor the subscription to their needs.

Prioritize quality control

The engine of a successful subscription-based payment model is customers who feel confident and happy to use and pay for your service or product. Your quality control procedures will play an integral part of making that possible. You must be forever vigilant and closely monitor the quality of your product or service performance and delivery, customer service/customer experience and the payment process.

Embed quality control into your workflow by making it part of someone’s job description (yours, Freelancer friend!) to confirm that customer expectations are met, respond to and document glitches and monitor the turnaround time for resolving issues. BTW, attentive quality control will make you quickly aware of brewing customer concerns, knowledge that can, for example, reveal service enhancements that customers may appreciate. You may discover another way to instill trust and value in your company. 

Expectations and the customer experience

Begin setting expectations when prospective customers first interact with your subscription sales funnel. Life is about managing expectations and it’s in your interest that every customer understands what is (and is not) included in the subscription you want them to buy—e.g., accessible services, products, tools, supporting technologies, change orders and how to reach customer service on the phone. In order to make an informed decision, subscription prospects must understand and accept what the service offers, channels for contact and the level of support offered by your organization.

Be advised that available payment methods are now an essential part of the customer experience. Economic uncertainty has made customers exceptionally price-sensitive and potentially influenced by their satisfaction, or disappointment, with the payment options you make available, along with the add-ons or upgrade options and other customization features. Debit cards remain the most popular payment method (68.6%), but the desire for access to alternative payment methods is now undeniable. Including subscription payment methods that were once seldom available can address the growing preference for a convenient, seamless payment experience that recognizes customer needs.  Alternative payment methods have been proven to generate more revenue (5.0% renewal invoice decline rate) and help prevent fraud (0.9% of failed fraud transactions). 

Customer retention

The smartest business owners will implement customer retention strategies designed to discourage customer churn and grow the subscriber base. The customer experience presents numerous opportunities to appeal to customers by offering potent sweeteners that may include loyalty rewards, product or service bundling, hybrid models, subscription pausing options, or other special offers designed to promote customer satisfaction and loyalty. In 2023, the average consumer churn rate was 4.1%, staying consistent year-over-year. As customers become more particular with spending, their purchases become more intentional, making them less likely to churn once a decision to buy has been made.

BTW, subscription pauses are a convenient alternative to sidestep cancellation when a customer needs relief from monthly payments or product deliveries. 39.7% of merchant sites enabled the pause functionality and prevented over 400,000 plan cancellations.

Thanks for reading,

Kim

Image: © Lucy Lambriex /Getty Images 2015