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Six Strategies to Spark Sales

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As every Freelancer and business owner eventually learns, an occasional sales revenue slump is not unusual. The precipitating factor can be anything from the potential for federal legislation that if passed would impact your industry, fluctuations in your local economy, or maybe even a social media meme that’s sweeping the country. Beyond the expected seasonal variations, sales revenue can wax and wane for mysterious reasons, making it a necessity to have financial reserves available to allow your company to continue operating as usual.

What this observation reveals is this—being successful in business means being resourceful. The best way to survive revenue peaks and troughs is to devise a remedy that revs up revenue and creates robust cash-flow that positions your company to thrive. Taking action to stimulate sales is always good business. For inspiration, please see here insights from a survey of the 14,000 member companies of the National Association of Manufacturers conducted by the Chicago, IL based global risk management, tax and consulting firm RSM McGladrey. Identified in the survey are strategies that you’ll recognize as low-hanging fruit selling opportunities that have excellent potential to generate revenue now and into the 4th quarter.

1. Increase market penetration

More than 60% of survey respondents considered it smart to focus on what their business does well—selling to current markets. Expanding penetration into your market segments is considered a wise revenue-generating strategy, since competitive advantages and all necessary systems are in place—relationships are favorable and communication protocols are familiar; you know how to facilitate the sale and know how the client wants products or services to be delivered; client pain points and priorities have been documented; and, most of all, you’ve earned client trust.

Pave your path to success by becoming more diligent and systematic about marketing outreach strategies, tactics and follow-up. Email marketing, social media posts, newsletter and blog articles and telephone calls are among the activities that effectively transmit personalized messages known to stimulate sales and expand market penetration.

2. New extension to your line

Consider extending your product or service line to include an inventive complementary addition that will enhance the desirability of the solutions clients buy from you now. This strategy is linked to your ability to leverage customer knowledge and relationships in a way that reveals seldom expressed frustrations or aspirations when using your category of products or services. When you make time to talk with clients and understand what matters most to them, you will eventually learn how your organization can more effectively provide solutions that solve problems, achieve goals, eliminate glitches and deliver an exemplary client experience as you do. Do this and your company will become more indispensable to their operations and more orders will flow to you.


3. New add-on or upgrade

More than 40% of respondents believed that providing add-on or upgrade options to the products and/ or services sold would likely be embraced by enough clients to become an efficient and effective growth strategy. Certain of your clients may feel that a more comprehensive version of your basic product or service brings an advantage that they consider to be worthwhile and they’d be willing to pay more to have it. Inviting clients to “trade up” can sometimes rather easily produce a revenue stream for your business. Best of all, you may be able to create the enhanced version of your product or service for a modest cost and sell to clients at a premium.

4. New distribution channels

Identifying new sales channels could make doing business with your outfit more appealing to certain client segments and result in an increase in sales revenue. Additional sales distribution channels will expand the availability and visibility of your products and/or services and encourage more sales. The additional revenue can soften the effects of whatever erratic purchasing patterns that might occur throughout the year and help stabilize cash-flow.

If you haven’t done so already, enable clients to purchase some or all of your products or services directly from your website and social media accounts. Depending on your product line, explore the possibility of placing selected items on consignment in retail outlets that fit your brand. You might also evaluate the feasibility of opening a pop-up store.

5. New service

Whether your company sells B2B or B2C, you may be able to develop a new service that both aligns with your current products and/or services and solves a problem by providing a solution that your market segment finds desirable. When a product or service line comprehensively addresses what clients have in mind, sales growth will result. Presenting more reasons for clients to do business with your company builds brand loyalty and value along with sales revenue and that can include repeat business and referrals, too. What practical and appealing new service do your clients hope you can offer?

6. Price to tempt

What creative pricing offer might intrigue your clients and persuade them to do business now instead of later? While it is preferable to sell on value and quality, limited time loss leader pricing tactics do little harm to gross sales and have been known to stimulate purchases of higher profit margin items in your product and service lines—exactly the outcome you’re looking for!

Thanks for reading,

Kim

Image: © DAX MELMER/The Windsor Star.  Business is brisk at Bouchard Gardens on opening day of the Downtown Farmer’s Market in Windsor, Ontario (Canada) on Saturday, May 30, 2015.

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What Creating Value Means Now

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https://neilpatel.com/blog/create-value-in-b2b-markets/

When providing B2B products and services is the focus of your business, it has always been necessary to create, demonstrate value as a means to attract and retain customers. Perceived value, often delivered as convenience, simplicity or cost saving, is a time-honored motivating factor in this sector. Of course you understand this basic calculus but like everything else, as business conditions, technological advancements, shifts in population, or the cost of living are impacted by various factors, then how value is perceived will also evolve. To complicate matters, you can also throw in the question of how value can be not only created, but also maintained and expanded. To dive into this subject, I turned to marketing savant Neil Patel.

As I knew he would, Neil Patel provides a practical explanation of how the potentially confusing matter of B2B value might best be approached and delivered when instability is the order of the day. To start, he segments customer buying behavior into five areas and labels them as “particularly important for B2B markets since these customers are keenly aware of and interested in anything that gives them an edge or adds to their success”.

  • Response – The knowledge that someone understands your problem and is ready to solve it
  • Service – The ability to clearly spell out the details while eliminating all of the risk (or perceived risk). Can also affect the credibility and trustworthiness of the company depending on how well they handle service-related needs.
  • Quality – A consistent formula that results in well-made products or services that help the customer achieve their goal(s)
  • Price – An assigned value that’s clear, practical and competitive
  • Time – The product or service is dependable, has a sensible learning curve, demonstrates clear return on investment in a shorter period

Having identified factors that were identified as decisive in both his corporate practice, which includes global players such as Amazon, Intuit and Microsoft, as well as the work he does with much smaller B2B entities, he discovered an uncomfortable truth—B2B customers aren’t going to tell you what they want. In fact, they may not immediately recognize, or are unable to describe, the value that will activate their Buy Now button. Your prospects cannot paint a picture of what they’re really looking for and that makes it very difficult for you to offer reasonable solutions that might be evaluated. But the good news is that Patel recognizes that the five decisive factors that govern perceived B2B value can be measured and they can be impacted and improved.

You Are More than Your Product or Service

All of these things add to the core value of the product and/or service, making it so much more. Companies that fail to demonstrate the benefits of these things in ways that customers can understand and appreciate will find themselves hard-pressed to justify the value of their product – particularly where price is concerned.

Notice that there’s one (very important) factor I’ve left out of the value puzzle – trust. Trust supersedes all of the other motivations in this list – however, it’s not something that can be outwardly measured. If you don’t have the customer’s attention, you can build up all of the other facets as much as you like, and you’ll get absolutely nowhere with them. But building trust centers on ensuring that you have the rest of the factors presented in a way that’s relatable, understandable and most importantly, actionable.

All that will happen only when the five critical factors are in place and leading you to create value thar customers will recognize, when they see it.

All of these things add to the core value of the product, making it so much more. Companies that fail to demonstrate the benefits of these things in ways that customers can understand and appreciate will find themselves hard-pressed to justify the value of their product – particularly where price is concerned.

So Why Is So Much of “Creating Value” Focused on the Price?

A lot of discussions about creating value center on price – but this perspective is misleading at best. The truth is, all of the other four facets of value-building: response, time, quality and service, make it possible to justify the price. If the customer isn’t on board with any one of them, you’ll have a hard time closing the sale.

Competing on price alone is a race to the bottom for B2B companies

So how to you make sure that the customer doesn’t simply hinge on price? Follow these steps:

Discover What the Customer is Willing to Pay For

Notice I didn’t say “discover what the customer is willing to pay”. You can uncover a great deal about what a customer values by simply talking to them. They’ll make it abundantly clear if you ask the right questions, especially where previous vendors are concerned. Everything from technical support and training to white-label options is on the table here, and when you find a collection of things that’s high on their priority list, you can:

Hit All the Right Buttons

B2B buying decisions are rarely made by one person. You’ll need to have the whole C-suite, marketing, sales and other executive members of the team on board – and all of them value different things. Don’t hesitate to demonstrate how your product or service can affect a priority of the marketing department, save hours of time for sales and otherwise provide demonstrable ROI to the C-suite. With this in mind, perhaps most importantly, you should:

Sell the Results, Not the Features

Don’t just tell them about the benefits, let them envision the outcomes for themselves. Always remember that the first use of your product or service is in your customer’s mind. When you can communicate the ROI they get in real, measurable ways – whether that return is in profits, time saved or anything else the customer values, you’ll have their attention and most likely their name on the client roster.

Never Stop Improving

Finally, even if you’ve created a fine-tuned money-printing Value Machine, your work is still not done. Even though you’re not competing purely on price, if a competitor can demonstrate that they provide similar (or superior) benefits at a lower price, you’ll find yourself on the defense. In order to continually outperform the competition, it pays to have a finger on the pulse of not only trends within your industry, but trends within your customers’ industries as well.

Thanks for reading,

Kim

Image: Work crew drilling through solid rock to create the Panama Canal, Panama, 1906 (Everett Historical)

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“What’s In the Budget For This Project?”

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Hallelujah! A prospect you’ve courted for quite some time has finally agreed to consider using you for a project. You’ve been invited to meet with a couple of members of the project team. You’re preparing for the meeting like a seasoned pro and that includes asking questions that show the prospective client’s priorities matter to you. You’ll ask about the ideal outcomes for the project, how the project fits in with long-term company goals and how a successful project is expected to promote brand awareness and grow the customer base. You’ll ask who will make the decision as to the vendor and when that decision will be made.

You know the right questions will ensure that you understand what the project is expected to achieve and confirm your ability to produce the deliverables. The right questions also signal to the prospect that you intend to meet or exceed expectations. But after you’ve inquired about the project specs, remember to ask another question, an essential question that is sometimes neglected—-the amount of money that’s been earmarked for the project budget. Without ascertaining this vital piece of information, you cannot move forward. To think that you can write a credible proposal without first discussing at least a ballpark price is unfair to both yourself and the prospect. Do you shop without looking at the price tags? Of course not.

The budget is a critical component of the project specs and there must be transparency. Without knowing how much money can be made available, neither you nor the prospect will know if either can afford to do the project until the proposal has been sent and that is too late. When the money talk is omitted from the project specs discussion, decision-makers and stakeholders waste time.

Money talks are intimidating for many. You’re thrilled to be invited to meet with a prospect and you want to make a sale, you want to get to yes. However, if you’re going to be a successful Freelance consultant, you must learn how to discuss money. The money talk brings on the big reveal—-can the prospect afford to work with you (and the flip side, can you afford to work with this company)?

As you know, attitudes about money are an emotional issue and you won’t know how the prospect will respond until you go there. Some prospects are comfortable being up-front and transparent about the budget. Others are not that evolved—- they jolly well know their budget, but they don’t want to tell you. Oh, well!

Nevertheless, you must face up to your money talk and tiptoe through whatever emotional baggage your prospect may have. Here are three direct but polite money talk icebreakers that are guaranteed to make it comfortable for your soon-to-be client to be candid about the budget before you write the proposal. If you’ve done it right, you and the prospect will first discuss the pertinent matters, including budget, and your proposal will confirm in writing what the parties have agreed to.

  1. Is your budget in the hundreds or the thousands?

This question quickly helps you understand the resources that your prospect is willing and able to invest in the project. If the response in the thousands, you can further clarify by asking if an amount that seems reasonable would be in the thousands or tens of thousands?

2. Are you thinking $500, $5,000, or $50,000? 

This question encourages the prospect to verbalize a spending range for the project. Remember, these are not your actual prices; these are numbers that make it easier and less intimidating for the client to express what s/he can afford.

3. Would an amount somewhere between $7,000 and $10,000 be affordable?

Suggesting to the prospect a range that’s close to the higher end of what you’d likely charge for that type of project is another good tactic. This question lets you know what type of services the prospect can afford and will make it clear to both of you if it’s worth moving forward with you as the project vendor. Fish or cut bait.

Finally, if you choose to give a verbal estimate, say the price, or the range, and be quiet. Silence gives your prospect an opportunity to consider the price and respond. Silence also communicates that you have confidence in your price. The worst thing you can do is announce your price and then offer to negotiate it down before the prospect has had a chance to say yes or no. Resist the urge to say, “Will that work for you?” Or “We can negotiate that if it’s too much!”

The best lesson you can learn as a Freelance consulting professional is that your time and talent are worth money and you deserve to exclusively work with clients who value what you bring to the table. Those who who attempt to wheedle or bully you into accepting a price that does not reflect your estimation of the value of your services is best avoided. Have the courage and the self-respect to walk away, as disappointing as it is. There’s no point in wasting it on a proposal for a client who can’t afford you.

Having money conversations is not an art–it just takes confidence and practice.

Thanks for reading,

Kim

Image: Anand Purohit/Getty Images. An Indian lady is shopping and is ready to pay in rupees.

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8 P’s of Marketing for the 21st Century

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It was at The University of Notre Dame that Professor of Marketing E. Jerome McCarthy laid out the principles of the original four P’s of marketing, also known as the Marketing Mix, in his 1960 book Basic Marketing: A Managerial Approach. McCarthy and co-authors Joseph Cannon and William Perreault chose a hands-on, problem- solving approach to the challenges that marketing professionals face.

The boots-on- the-ground approach championed by the 4 P’s Marketing Mix was quickly recognized as foundational to the craft, the gold standard. The genius of the P’s is evidenced by their ability to address both the primary objectives of the marketing team and critical requirements of customers. The P’s relevance has continued into the 21st century and even inspired marketing researchers and thought leaders to expand the list.

As you build a marketing strategy for your products and services—-content and social media marketing, branding, advertising and PR, for starters—-you’ll find that the 4 P’s (+ more) Marketing Mix will guide you and your team to the most effective strategies and action plans every time. Here are the original four and four more that you may find useful.

Product: The solutions that a company sells—products or services, tangible or intangible, B2B or B2C.

Price: The value, in monetary terms, of what customers are willing to pay to obtain a company’s product or service. Company leaders are advised to fully account for the many factors involved in developing, manufacturing, or acquiring a product or service, in addition to the associated marketing, selling, distribution and overhead expenses when determining an appropriate Price. The prices of competitors will also influence your pricing.

Place: Where customers come into contact with and are able to buy the product or service—-in a bricks & mortar storefront, online, at a flea market, in a meeting after contract terms have been negotiated.

This component also refers to both which stores stock a product and the product’s location within a store. For example, certain breakfast cereals and other items targeted to children are found on shelves that are at a child’s eye level or in the children’s department.

Promotion: Strategies and tactics used by the company to persuade potential customers to buy its products or services.

Process: Where and how the customer receives the solution provided by the product or service and all that is entailed. Intangible services delivered by skilled practitioners are more obviously influenced by this component.

Will the solution be delivered in a classroom (education courses), a salon (hair styling or massage therapy), a health care facility (dentistry), or leak- proof cardboard containers (ice cream shop)? How the methods employed in the delivery or application of the solution significantly impacts both outcomes and the customer experience.

Position: The ranking or assessment that customers, prospects and sometimes even the public assigns to your product or service, as compared to similar offerings. To achieve the preferred Position for the product or service, a marketing team will through branding utilize distinctive messaging, packaging, advertising and product placement, sometimes through celebrity endorsement, to create and reinforce the desired image.

Packaging: Tangible products are more obviously influenced by this component. A product’s Price, Place, Promotion and Position are telegraphed in how a company “dresses” the product and presents it to target customers. Even the shopping bags and tissue wrapping paper (or their absence) support the story.

Intangibles are given a “verbal package” that will emphasize its most tangible advantages and benefits, which may include exclusivity (social media site Clubhouse) or rarity or other significant benefits.

People: One component of this factor refers to those who work in the business, in particular the customer-facing staff. Those who interact with customers usually have a profound impact on the all-important customer experience.

The second component in this category refers to the customers themselves, who have many opportunities to communicate to others both the perceived quality of the product or service that was purchased and the perceived quality of the customer experience. Online ranking and social media sites such as Trip Advisor, Yelp and Facebook empower people to either reward or punish a company.

Thanks for reading,

Kim

Image: © Harris Farm Markets Sydney, Australia

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Pricing B2B Services

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According to Dorie Clark (no relation), Adjunct Professor of Business Administration at Duke University’s Fuqua School of Business and author of Entrepreneurial You (2017), there are four pricing strategies that Freelance consultants might use, depending on the project at hand and the relationship you have, or would like to have, with the client. It is crucial to follow a pricing strategy that will support your objective to persuade the client that your prices are fair, your solution will be effective and you are the right person to hire.

Hourly billing. The most straightforward pricing strategy is to bill clients by the hour. When you are unsure of the number of hours it will take to complete a project, perhaps because your responsibilities will vary from week to week or month to month, then an hourly rate pricing strategy is reasonable. On the other hand, if you do have a good idea of the number of hours that should be necessary to complete the job, an hourly billing strategy is also reasonable, particularly for one-off assignments or sporadic work with the client.

You can then provide a reliable project estimate, based on your hourly rate for the work proposed and the anticipated number of hours, and that information will be reassuring to the client. But if you underestimate the time needed to complete the assignment the downside of this strategy will emerge, because your final price will overshoot your estimate and your client may not be thrilled.

Another potential downside to hourly billing is the level of scrutiny that it invites. Some clients may challenge the number of hours you record for the tasks involved and that is uncomfortable.

Set fee for services. This pricing strategy requires the Freelance consultant to develop a standard suite of services, where all related tasks are included and there is one price for the whole package. “Productized services” is the term pricing experts use for this strategy. If certain of your services are frequently requested, make life easier for yourself and your clients and create a standard rate sheet for services you perform most often.

For example, if you often conduct half or full-day workshops, billing a flat fee for all tasks involved is a more favorable strategy than billing separately and hourly for the associated tasks. Clients are comfortable accepting a flat fee because the project price is all-inclusive, predictable and transparent. Furthermore, the project specs describe your duties and discourage “scope creep,” those extra unpaid tasks that some clients like to sneak in. If the client would like an extra service or two, then you’ll price those separately and not be tricked or coerced into giving away free labor.

Value-based pricing. Evangelized by Alan Weiss, elite management consultant to multinational companies such as Merck Pharmaceuticals and author of dozens of books, including (Million Dollar Consulting [1992]), this strategy hinges on what Weiss calls “a value-based project fee structure.”

You begin by having a detailed conversation with the prospect so that you will understand the project requirements and the project’s relevance, urgency and impact on the organization. In other words, you and your prospect will achieve mutual agreement on the value of the project to the business. Weiss says that it’s useful to ask questions such as, “What would be the value to the company if this weren’t a problem?” or “What impact would it have if you could do XYZ better?”

Dorie Clark recommends the value-based pricing strategy for Freelancers who work with Fortune 500 companies, because value-based pricing is a way to help the prospect envision and appreciate the value of the right outcomes delivered at the right time. Clark feels it is appropriate to charge a higher project fee when working with big-budget clients because the stakes are so much higher.

Your work for a Fortune 500 company might, for example, create $10 million in new value, whereas even a dramatic improvement for a small not-for-profit organization may only enhance the bottom line by $10,000. Once the prospective client understands the full value that your work will bring to the organization, your fee — a tiny percentage of the overall gain — will in theory seem trivial in comparison.

Retainer agreements. These are an excellent arrangement because predictability is a wonderful thing for both you and the client. Once it is established that you’ll work a more-or-less fixed number of hours per week or month on a certain assignment or category of assignments and a comfortable relationship develops, by all means suggest that you create a monthly retainer agreement. Bring evidence of 6 – 12 invoices to bolster your case.

In the retainer pricing strategy, the client pays the Freelancer a flat fee every month for on-demand access to your services (and that could be anywhere from $500/month to a four or even five figure sum). This allows you to depend on a certain amount of money each month, no matter what. The downside is that unless you’re careful, your client may take advantage of the “all you can eat” pricing by monopolizing your time.

To prevent abuse, be very clear upfront about who can contact you and for which types of services. It is also advisable to specify the hours that you’ll be available ( 8:00 AM – 6:00 PM or longer?), the protocol for weekends and holidays and the methods of contact—email, phone and/or text. You’ll also want to specify whether they only have access to your advice, or if there are specific deliverables you may be asked to produce (for example, you might also agree to generate content for social media or the company newsletter). As you gain more experience and develop long-term relationships with clients, you will be able to propose retainer agreements and institute more control over your monthly income.

Freelancers who succeed are those who are appreciated for the value they bring to their clients’ organizations. An important building block that supports how you communicate your value to the client is your pricing strategy. Study the pricing options discussed above and choose the most advantageous for you and your client.

Thanks for reading,

Kim

Photograph: Courtesy of the Everett Collection. Dink (Margaret Nolan) gives James Bond (Sean Connery) a massage in Goldfinger (1964).

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Factors to Include When Planning to Launch a Business

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In a recent 7 day span, I was invited to judge two pitch contests for entrepreneurs who had successfully completed a 13-week business plan writing workshop presented by a woman-centric business incubator and business development center that has operated in New England for 25 years (and is also an SBA affiliate). The entrepreneurs were either in start-up or scaling (i.e., expansion) mode.

I was excited to be a judge and privileged to meet nearly two dozen forward-thinking, focused, resourceful and determined women who expect nothing less than success and are taking decisive steps to bring it about. Based on the business concept pitches I heard, I encourage those who are evaluating whether to launch a business venture to include the following information:

  • Name and describe your product or service and the problem(s) it will solve
  • Identify your best customer groups and explain why those customers will pay for your product or service
  • Identify your primary competitors, list the competitive advantages that your product/ service possesses and explain why customers will prefer your offerings
  • Create a business model that outlines how you’ll acquire customers, where and how the product/service will be delivered and how the business will make money
  • Explain why you are qualified to make the proposed business successful
  • Develop a business strategy and marketing plan that includes:
    • sales and distribution strategy
    • pricing strategy
    • product positioning strategy
    • branding strategy
    • content marketing strategy strategies
    • social media strategy
    • PR and advertising strategy
  • Detail the business pre-launch and launch (start-up) costs
  • If investors or borrowing will sought, present a (realistic) break-even analysis and 24 month revenue projections (P & L and cash-flow)
  • Detail the potential investor return and the loan payback schedule

 

Thanks for reading,

Kim

Photograph: Launch of the Hubble Space Telescope April 24, 1990

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Defending Your Prices 2.0

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There is a lot to like about the Freelance life, but recurring paycheck anxiety isn’t one of them.  If we’re not waiting to get paid by a client who should have mailed the check 10 days ago, then we’re fretting that the check is rather too small anyway for the amount and quality of work that was done.  But how can one be choosy when the possibility of being replaced is so real? No matter how you earn your living, by 1099 or W2, the employer is in the driver’s seat.

Nevertheless, we Freelance consultants do have some leverage.  While there are thousands of Freelancers willing to accept small hourly rates and project fees, hiring managers in the know realize that the quality of their work is often less than ideal.  As always, you get what you pay for and pay for what you get. Below is a list of selling points that in your next pricing negotiation can help you to justify and defend the premium price I know you are worth:

Expertise

Shopping for B2B services is not like shopping at the old (and sorely missed) Filene’s Basement, where frugal fashionistas could find premier designer label clothing for a fraction of the retail cost.  The caveat was, one had to expect certain shortcomings, like maybe a  missing button or two because one of the infamous button thieves got to the item first (there were apparently several such individuals over the decades).

Inexperienced or less skilled Freelancers may request lower prices for any number of reasons, including perhaps the inability or unwillingness to perform complex assignments.  Some people like to compete on price and there will always be those who respond for whatever reason and that sometimes includes an antipathy toward paying people.  Those who like the low-ball figure should be advised that they are vulnerable to receiving only the bare minimum of work because they’re only paying the bare minimum price.

Make it clear to your prospect that you produce the highest quality work. The prospect can totally hand the project over and trust that you and your team will successfully complete the job as specified, on time and within budget. There will be no need for the client to perform after-the-fact do-overs of your work.  Your base price may be higher, but in the end you save clients time, money and aggravation.  You make them look smart for hiring you.

Dependability

In sum, you will produce what has been asked of you and if there appears to be an obstacle to doing so, you will alert the client as soon as that is recognized and suggest collaborate on making adjustments or creating a Plan B, especially for time-sensitive projects.  You meet deadlines and respect budgets.

Follow-up

One of the biggest mistakes a Freelancer can make when negotiating project or hourly rate pricing is to limit the scope of what you offer solely to the project work as described in the specs.  Make it known to prospects that you are selling an entire service package that includes not only the project spec work, but also includes responsiveness and prompt follow-up; good communication and feedback; efficiency with logistics; and the willingness to ensure that deadlines will be met, even if that means working outside of the 9:00 AM – 5:00 PM, Monday to Friday paradigm.

Showcase your value-added services by ensuring that your project proposal answers all of the standard or required questions and is sent to the client on time.  Respond to client follow-up inquiries quickly, efficiently and cheerfully.

Testimonials

While any confidentiality requests must be respected, revealing selected names on your client list, newsletter or blog statistics, links to published articles and webinars hosted and publicity listings for your noteworthy speaking engagements will provide tangible proof of your reputation and expertise and in that way, justify your pricing.  Depending on your specialty, an online or hard copy portfolio of your work to show to prospective clients is yet another effective way to demonstrate the quality and sophistication of your work and help to explain why you do not price your services at the bargain basement level.

Don’t be shy! Prospective clients want to see what you can do, so that an informed decision can be made.  Build your case, present it well and show them what you are worth.

Thanks for reading,

Kim

Shoppers at Filene’s Basement  (1974)  Photograph courtesy of Nick DeWolf

 

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Building Your B2B Consulting Practice

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Regular visitors to this blog will notice that over the past few weeks, I’ve devoted special emphasis to tactics and strategies that will help Freelancers keep our consulting practices alive and well.  Competition in the field is intensifying and clients are aware that they can be very exacting in their hiring requirements, since there is no shortage of available talent, especially in mid-size and large cities.  According to Statista, the number of management consultants has grown every year since 2012 and as of 2016, there area 637,000 management consultants working (or trying to!) in the U.S.

As we all know, ever since the late 1980s, when the concept of “downsizing” gained popularity in corporate offices and the ways to separate citizens from full-time, long-term employment became numerous, many workers who either found ourselves highly skilled but nevertheless unemployable, or who eventually tired of endless cycles of  hirings and firings (a common occurrence in the IT industry), decided to strike out on our own and exert some measure of control over our professional and economic destiny. What did we have to lose? We were already in trouble.  Manage the risk before the risk manages you.

When you’ve worked in the Knowledge Economy and find yourself contemplating whether to launch your own venture, by design or default, a solo consultancy that offers B2B services that you already know seems a simple and obvious choice.

Start-up costs are minimal—there’s nothing much to invest in for the launch, except for business cards and a website.  There’s no need to rent an office and no need to hire employees.  You already own a smart phone and some sort of computer.  At most, you might invite a couple of your unemployed coworker buddies to come in with you.  In no time, you’ll be ready to see clients and charge a pretty penny for the advice that you give. Easy, right?

Well, not exactly.  Unless you’ve worked for a consulting company that provides you with a stable of clients that know you and value your expertise and there’s no non-compete hagreement that prevents you from, ahem, stealing a few clients from your former employer and bringing them to you roster—-a time-honored and usually successful practice, BTW—you may find yourself floundering when it comes to obtaining clients.  If you’ve got a well-placed pal or two who is able and willing to divert a contract to you, you could be twiddling your thumbs for quite some time, despite the furious networking that you do and your growing social media presence.  The truth of consulting is, no one gets a client unless that client knows you and the value of your work.

The “catch 22” is that you can’t get a client without experience and you can’t get experience until you get a client.  A business plan that is in reality an extended marketing plan that encourages you to think strategically, rationally and in detail about the following items should be written. Bear in mind that your services are valuable only insofar as there is client demand.  There may be no market at all for several of your strongest competencies, alas.

  • Services for which there is demand and you have the expertise and credibility to deliver those services and prospective clients who will pay you to do so
  • How to price your services
  • How to make clients perceive that you are worth your asking price
  • Your access to clients with the motive and money to hire you
  • The need for a partner (or two) and how that person can help launch and sustain the venture

Without a pre-existing reputation in the industry, you’ll find the early days of consulting to be quite difficult. Lining up part-time employment will help your cash-flow. Teaching at the college level is always a good option because it enhances your credibility and pays well for a part-time gig.  Whenever possible, find work that not only gives you money, but also demonstrates your expertise to potential clients.

If you can become at least an occasional contributing writer to a noteworthy publication, or get articles included in a local business publication, you will enhance the perception of your expertise, as will college-level teaching of a subject related to your B2B services.  Joining a not-for-profit board that brings you into contact with potential clients and referrers who can watch you take on committee work that demonstrates your bona fides will be helpful. Becoming a mentor at a respected new venture start-up center will likewise enhance your credibility.

If you can participate in a webinar, YouTube video, or podcast, where you can elaborate on the application of your expertise and the results that you deliver, you will be able to post the link on your website and social media accounts, so that prospective clients can see you in action and hear what you know.

Those who do not have a ready stable of potential clients must work very hard and very smart to make up for that deficit, but it will not impossible to build a consulting practice that will support you financially and of which you can be proud. There are many paths that lead to a profitable B2B consulting practice and with a dose of god luck, you will find your path, too.

Thanks for reading,

Kim

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Price Your Way To Profits

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Pricing your products and services is a critical element of a well-conceived marketing plan and appropriate pricing is integral to the development of a successful business venture.  The burgeoning field of behavioral economics reveals why certain pricing tactics work and how you can incorporate some of them into your pricing strategy.

Have an anchor baby

Your “anchor baby” can result in a positive outcome for sales and billable hours.  A cognitive bias called anchoring can cause us to perceive a lower-priced item as reasonable when it is viewed after we first see a higher-priced  version of a similar item. A $2000 item is perceived as a relative bargain after one has seen a similar version priced at $5000.  A prospect could be moved to envision him/herself purchasing that “bargain-priced” item.

Therefore, placing premium-priced products and services in proximity to the similar but lower-priced offerings that you hope to sell can potentially lead prospective clients to perceive the lower-priced items as providing real value, once they know that functionally similar items can be much more costly.

Zeros kill sales

In a previous post I discussed why, especially in retail sales, it is standard practice for merchants to list prices that end in .99 (or .98 and .95) and never .oo, because prices that end in zeros are often perceived by customers as being expensive, according to a study that appeared in the journal Quantitative Marketing and Economics in 2003  The Less Than Zero Pricing Tactic.  Yes, we really do think that $5.99 is cheaper than $6.00 and there’s still more downside to zeros— when pricing your services you should not only avoid listing, say, $3000.00, because you’re presenting too may off-putting digits, but you are also recommended to avoid listing your price on a proposal as $2995.00.  Prospective clients will feel better about your price when it’s expressed as $2995, according to the findings of a 2011 study conducted by the Society for Consumer Psychology.

Be a Lexus, more than a Toyota

A Vanderbilt University study demonstrated that customers are willing to pay more for a Budweiser beer in a fancy hotel bar than they would for that same Budweiser in a dive bar. Why? The economist Richard Thaler of the University of Chicago explains that the power of perceived prestige allows the luxury set to get away with charging higher prices. Freelance consultants (so much more classy and deserving than a mere Freelancer, no?) are advised to in various ways present cues that make the case for charging premium prices.

Let the value you bring be known to those who matter. Teaching at the college level and speaking at respected business associations showcases you as a thought leader and an authority.  Producing long-form content that appears in a respected print or online publication, monthly newsletters sent to your email marketing list, or weekly blog posts that draw your followers also adds to the perception of your expertise and as well brings your writing skills to the forefront. The design and content that appear on your website should present you and your entity in a way that communicates competence and good taste, as should your business card and client invoice template.

The organizations of which you are a member, the quality of your clothing, where you vacation, the books you read, how you socialize and the boards on which you serve (along with the related committee activity) also enhance your reputation and reflect on your brand.

How to raise your prices

Weber’s Law (1834) indicates that your clients will probably accept a 10% price increase of the products or services purchased from you and some may not even notice the change.  You already know that other factors can impact your ability to raise prices, including supply and demand, the urgency of the need for your product or service, the presence of competitors and the perception of the value of your brand.

Thanks for reading,

Kim

 

 

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Pricing Primer for Freelance Service Providers

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“The business world is driven by the desire to increase three elements: market shares, sales revenues and of course, profitability. Pricing is the key player in any strategy concerning the growth of these three goals.”   Mohammed Nosseir, Senior Marketing Adviser, Simon-Kucher & Partners, Middle East

Determining the pricing structure for intangible services provided is a real challenge for Freelance consultants. What is the value of our time and expertise in the open market? What if we promote our services, set the price and no one hires us? Should we lower our project fees? Can we ever raise prices?

Clients are motivated to spend as little as possible for the products and services that they require. However, they are known to pay premium prices when they “feel” that a particular product or service delivers exceptional value. That value can mean an expert solution to a business challenge; a long-lasting product that performs very well with little maintenance; the ability to meet a deadline; or other factors that have meaning to the decision-makers.

Often as not, different clients will have different priorities that define what is valued. It is the Freelancer’s job in the initial face-to-face client meeting to figure out what the client feels is important. That knowledge will achieve two objectives:

  • You will know the expectations that must be met (or preferably, exceeded) to justify a premium price.
  • You will know how to price, based on the time or other resources that will be devoted to meeting and exceeding client expectations and you will grasp the urgency of client needs, which impact your price.

Most likely, there are standard benchmarks and signifiers of high-value service in your industry and they should be incorporated into your marketing and operations, along with other value-addeds layered on as necessary. Knowledge of what competitors do would be most helpful as well, but it is very difficult to learn how competitors deliver their services or price them. Nevertheless, it is advisable to choose three or four to research. Visit websites to learn what services your competitors offer and how those services are described and packaged. Then, you can better identify potential competitive advantages for what you have and find a way to describe your goods.

It may sound like an obvious no-brainer, but part of your premium value-added that will be reflected in your pricing strategy should be your positive attitude and willingness to help prospective clients find the best solution to their business needs. Friendliness and the aim to genuinely want to offer good service go a long way in life and in business. Showing a good work ethic is likewise important.

For example when on an assignment, pay attention to emails. While I don’t recommend that one should be obligated to answer emails that a client dashes off at 3:00 AM (unless this is an urgent and high-revenue project), check emails through 10:00 PM and resume at 7:00 AM. If you can anticipate client needs, so much the better, They’ll think you’re a hero and will be happy to pay for the pleasure of doing business with you.

Step by step, client by client, focus on exceeding expectations on every project, building the trust and confidence that lead to a respected brand (reputation) as you do. You will receive referrals from satisfied clients (and you can also make referrals to your clients, enhancing your brand each time you do). Good brands create good word of mouth and that supports and justifies premium pricing.

As Mohammed Nosseir concludes, “Pricing has been, and will continue to be, the most complicated element in the marketing mix family…A proactive pricing structure will help companies…to maximize their profitability.”

Thanks for reading,

Kim