Tag Archives: prospect

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Avoiding Exploitation: How Much Free Advice?

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You’ve seen this movie before.  You are excited by an invitation to visit the office of a promising prospect.  There is a great discussion about the business and where your services would fit.  Serious questions are asked and,  anxious to demonstrate your understanding of the your  (almost)  clients’ needs,   you supply straightforward and practical answers.  The prospect seems impressed with your business acumen;  the energy in the room feels good;  you can visualize your first day on the job.  At the meeting’s end,  there is talk of bringing you in to specify the details of a working relationship.

A week slips by and then two.  Your email or phone call is either unanswered,  or the answer you receive is that your prospect is unable to move forward at this time.  Can you call back next month? Ten days into the new month you call and realize,  with much regret,  that the trail has gone cold.  Who you thought would become a new client was just an imposter,  who robbed the stagecoach of your expertise and disappeared.

That scenario is repeated more than one would think at for-profit and not-for-profit institutions alike.  The fact is,  unless a consulting professional works at Bain,  McKinsey,  or some other big consulting group,   rip-off artists may conspire to defraud you of actionable business information without paying you a dime.  I’ve been invited to two or three interviews where in hindsight I came to realize that the  “prospect”  was merely fishing for free ideas that would resolve a dilemma that would be handled in-house.

Certain salaried predators find it very clever to pretend that there is a nice project available,  call in a few Freelance consultants and pepper us with questions that we answer because we neither eat nor pay the rent or mortgage unless we obtain clients.   The schemers take copious notes and laugh as we walk out of the door,  filled with false hope and visions of paid-off credit cards.

The business press occasionally takes this subject on and presents an article that provides strategies that Freelancers might use to protect ourselves,  but I have little faith in the proposed remedies.  Reading them,  I’ve seen almost nothing that I would expect to work in real-time.  The prospective client asks questions about a project.  How do you avoid providing answers and demonstrating your ability to do the job? Giving a wonderful sales presentation only means there will be better quality information to steal from you.  Recommendations to find out who will be in the meeting and searching for common ground that will allow you to connect on a personal level with at least one person on the team  (oh, you grow roses, too?)  means nothing to someone whose agenda is to exploit.  Knowing when to try to close the deal means nothing because there is nothing to close,  except the door in your face.

There are few effective solutions for this troubling occurrence.  To date,  the best I’ve read was contributed by Grant Cardone,  sales guru and best-selling author of Sell to Survive  (2008)  and Sell or Be Sold  (2012): “I would like to work with you on this issue and I have a few ideas on how we might proceed,  but at this time I don’t know your company well enough to give you answers that either of us could trust to be correct”.

The beauty of this response is that it’s true and it can most likely stop the ” client ” from continuing to press for free consulting advice.  Brazen types may threaten to snatch the  “opportunity”  away from you but if that does occur,  take it as a clear sign that there never was an intention to hire you or anyone else.  Graciously and immediately end the meeting.  If by some miracle the client is real,  your statement will be respected and taken as a sign of integrity.  Your candor might even win you the contract.

Good luck and Happy Easter,

Kim

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The 5 Minute Sales Call

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I am writing on Valentine’s Day and I confess that I believe in love at first sight.  It does not always happen but sometimes,  one or both members of the couple  “know”  that the other is someone special and that the relationship is probably destined to be significant.   Some claim that they knew almost immediately that they would marry a particular person and that in fact the marriage took place  (I know three such couples).

Business relationships can follow the same pattern.  One or both parties may sense very early in preliminary discussions that there is great potential in the relationship or conversely,  that it is likely there will be no future.  Create some good luck for yourself by making a good first impression and making the most of your first five minutes with a prospective client.  Success lies at the intersection of good fortune and preparation.

Minute 1   Grab attention

Create  “verbal packaging”  that portrays your product or service as relevant to prospective clients.  Communicating the relevance of what you sell comes from knowing what clients value about your offerings and deftly articulating those benefits for prospects as you describe why,  where,  when and how to use your product or service.   If you’ve had time to prepare,  then do your homework to get a good sense of that individual’s business and construct a personalized pitch.  Your product/service must solve a problem or create a competitive advantage.

Minute 2   Talk details

If your prospect either admits that what you sell is needed,  or at least continues to listen with interest,  then ask a few questions to find out where you stand.  Is there a specific and immediate problem or goal?  What is the time-table? Float solutions that your product/service will provide.  This stage allows the prospect to visualize the process and outcomes of doing business with you.

Minute 3   Propose solutions

Explain further the solutions that your product/service will provide and persuade the prospect to define the goal or problem if that has not been done so already.

Minute 4   Establish timeline

Lay out a road map for implementing your solution and completing the sale.  Define the operational processes that will be followed to put your product/service in motion.  Now the client will know that he/she must agree,  or decline,  to proceed.

Minute 5   Close sale

Tell the prospect what has to happen to enable the sale.  Confirm that you have a sale   (“Are you ready to move forward with this and when would you like to start? You would like the project to be completed by what date?”).  Offer to send a contract or confirmation email to lay out the steps,  the timeline and project milestones.  Confirm the project budget and negotiate/agree on the project fee  (or hourly rate),  the amount of money that must be paid to you before you begin working and when future payments will become due.   Confirm payment options.   Say thank you and shake hands with your new client!

Thanks for reading,

Kim

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Plan Now to Make More Money

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At last,  Summer is officially here.  Bright sunshine and abundant flowers do wonders for my mood,  yet the season does my wallet no favors.  Clients wrap up projects by June 30 and teaching opportunities grow scarce.  When it comes to paying bills, well…..But rather than grind my teeth,  I’ve learned that it is far more productive to make use of the down time.  Two activities headline my Summer to-do list:

1.  Professional development:  Sign up for a course or webinar,  attend a symposium,  read a business book or two

2.  Position myself to make more money:  Examine my client list,  marketing strategies and pricing structure and figure out which of those factors needs tweaking.  Meet with a prospect I’ve had my eye on over the past few months.

If you’ve been trying to meet up with a certain prospect,  Summer is usually the time to try to get to him/her,  because so many of us are less busy at this time of year.  Do what you can to make contact with that person.  If you have identified this person as a good prospect but you haven’t met,  you may know or surmise where he/she goes for business networking.  Get on the list and get your body in the door.  If possible,  recruit someone who commands respect to make an introduction,  so you will have a good endorsement and look more trustworthy.  If you’ve already made contact,  ring up your prospect and schedule lunch or coffee.  People are often more relaxed in Summer,  so you’re likely to have your best opportunity to build a relationship that leads to doing business.

While you’re thinking about prospective clients,  revisit your marketing strategy and confirm that you are reaching those who have both motive and money to hire you.  The essence of your marketing strategy is to know how to portray yourself favorably to the clients on your wish list.  That sounds so obvious it’s ridiculous,  but many Freelancers do not know who has the greatest potential to become their best clients or how to make themselves known to those in that group.  According to the 2012 Freelance Industry Report,  only 28%  of Freelancers who spend less than 2 hours/week on marketing bill at $70.00 + per hour,  while 41%  of Freelancers who spend 20+ hours/week on marketing bill at $70.00 + per hour.

Considering that a 2010 survey by the Freelancers Union revealed that 29%  of Freelance consultants earned less than $25,000.00 a year and 58%  earned less than $50.000.00 a year,  one can assume that not many are billing at $70.00 + per hour and if they are,  they’re receiving rather few hours.  Therefore,  consistently spending even two hours/week on marketing can reap tangible benefits,  since it has been demonstrated to have a direct correlation to your billable hourly rate,  if not the number of hours one is able to bill out.  (I wonder who has 20 hours/week to spend on marketing? )

Furthermore the busier you become,  the less attractive it is to keep low-paying and/or difficult clients on your roster,  because you will be unable to afford to keep them there.  Scarce time will also make you feel confident enough to ask current clients for a price increase as well.  Make time to do more marketing by dropping any difficult or low-rent clients and use that space to perfect and execute your marketing strategy.

To give yourself some inspiration check out free webinars,  if you’re unable to afford a course or a conference.  Those of you with teaching or speaking experience might even be invited to become a presenter.  I presented the webinar  “A Business Plan for Your Nonprofit”  on April 24 through Nonprofit Webinars  http://nonprofitwebinars.com/past_webinars/a-business-plan-for-your-nonprofit  .  Marketing strategies will be different for every category of service,  but robust marketing must be on the calendar of every Freelancer if we expect to connect with clients who are willing to pay us what we are worth.

Thanks for reading.  Have a happy 4th of July holiday.

Kim

 

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Why You Don’t Get the Sale

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Two or three years ago,  I read that a Freelancer’s main competition is not another Freelance consultant who does what you do.  Our real competitor is the client.  As the less than stellar economy grinds on,  enriching primarily the top 1%  of the population plus a few lucky folks in the  (shrinking)  middle class,  that statement gains more credence every day.  Prospective clients have got a boat load of excuses to slide away from a contract,  or cutting down what was originally promised.  Do you ever wonder what could possibly be on the minds of clients and prospects who promise you the moon and then either disappear or offer up a very paltry version of the original proposal?

According to Steve W. Martin,  professor of Sales Strategy at the University of Southern California Marshall School of Business and author of  “Heavy Hitter Sales Linguistics: 101 Advanced Sales Call Strategies for Senior Salespeople” (2011),  stress caused by peer pressure and insecurity is the culprit and its impact on decision-making is detrimental  (no surprise there).  Freelancers and sales people must do everything possible to communicate our value-added but in the end,  the decision to give the green light is an internal matter and those outside have only so much influence.  Here are examples of what worries our prospective clients:

Budget availability

There are two main criteria for deciding whether or not to give someone the contract or sale:  1). What is the ROI that will accrue from the sale? and 2). How does that ROI compare to what might be derived from other projects being considered?  Projects that are considered strategic by the senior execs have priority,  so if your project has that status,  it’s only a question of how many hours you can get.  Whatever your project,  product or service,   you must first receive the initial approval.  You may believe that because you have confirmed that you are talking to a decision-maker and s/he says the go-ahead is imminent,  that is not the whole story.  There is the all-important step two and that happens when  the team of heavy-hitters examines and ranks all pending projects and major sales and decides which items receive funding and at what amount.  In other words,  that decision-maker that you’ve been speaking with will confer with other decision-makers to compare which projects will go forward,  because projects are continually re-prioritized in response to shifting conditions.

Strategic imperatives

Your project must align with the organization’s goals as perceived by the higher-ups.  If you notice,  projects that are championed by lower-ranking employees often do not get funded because higher-ranking execs do understand or appreciate the value-added,  do not view the proposal as strategically significant.  Moreover,  your project must demonstrate that the sponsoring higher-up understands and is actively advancing strategically relevant projects,  products and services.

Ego and image

This is related to the above.  Your project must make its chief sponsor look good to the person s/he answers to,  as well as look good to colleagues and subordinates. When an outside consultant is hired or a major purchase is authorized,  the project champion absolutely must look like a genius for doing the deal.  Under no circumstances must s/he be perceived as having made the wrong move.  Peer pressure is real and the project champion worries about making the right decision,  especially if this is something that has not been done before.  This is why the Freelance consultant must at all times deliver exceptional service,  must exceed expectations,  because the reputation and career advancement of your project sponsor is riding on it.

I’ll talk more about your nervous prospect next week.

Thanks for reading,

Kim

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Content Marketing Is the New Ad Copy

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Several times this year,   you will be presented with opportunities to advertise your Freelance consulting services in a print or online publication.  You probably belong to at least one professional networking organization,  whether it’s one that caters to peers in your field,  or a local business association.  The organization will have a newsletter and a directory and you will be asked to make the decision about buying an ad.  What should you do?

The answer is to confirm your budget after checking out the rate card and jump on it if you’re able.  Consider the advertising opportunity as an extension of whatever content marketing you produce.  If you don’t write a blog or newsletter,  then ads are  your content marketing and you must make the most of them.

Consider who will see the ad.  If potential clients are members of the organization,  then you definitely want to advertise in newsletter and directory.  Additionally,  there is  a second audience for your advertisement,  the organization big shots.

Placing ads with the newsletter and/or directory of the right organization will cause the big shots to look upon you more favorably.  They will likely reward you with valuable opportunities for exposure.  In exchange for your ad,   you can expect to be invited to moderate or speak on a panel or receive some other showcasing opportunity.  You may even be nominated to become an organization big shot yourself.  It’s a political thing and if you can scrape together the budget,  you are advised to join in.

Frame your approach to the ad in terms of content marketing,  that ubiquitous new term for advertising copy.   Content marketer and ex- advertising executive  Barry Feldman says that first,  determine what potential clients need to know about where and how your services fit into their business needs and then decide what action you want them to take on the road to hiring you to solve those needs.  Those pillars shape your ad copy,  i.e. the content marketing message.

Your content must be compelling,  communicating the story and providing  information that matters to prospective clients,  even if the audience consists of your peers and not prospects.   Peer organization big shots may be good referral sources,  so take the time to produce persuasive content.  Because life has become a barrage of marketing messages emanating from various media,  create content that makes your ad pop.  Spotlight three or four primary services maximum,  so potential clients and referrers will not become confused about what you do.  Hire a graphic artist to design a sleek and eye-catching ad.

Be authoritative,  never arrogant,  and perhaps be  a bit provocative as you concisely describe the challenges that cause clients to hire you and the unfailingly excellent results that you deliver.  Weave in terminology that clients use,  so that content will resonate.  Remember the call to action,  to inspire prospects to call you when in need of your kind of services.   After they’ve read your ad and decided they might want more info,  what do they do? You must tell them.

Maybe they send you an email or give you a call,  which gets a conversation going.   Maybe they go to your website and fill out a short questionnaire to get the ball rolling.  Generating prospective client follow-up,  also known as in-bound marketing,  entices prospects to commit to evaluating the fit between your services and their needs.  Most ad viewers won’t take the plunge,  but if even one does you will be on the road to good ROI for ad dollars spent.  If you get invited to a meeting with your prospect,  you will be 85%  of the way to a contract.

As I’ve said before,  social media gets all the headlines,  but tried and true forms of advertising are still able to deliver results.  Advertisers must approach ad copy as content marketing now and aim to teach as much as sell.   From the Mad Men era to the new millennium,  if you tell the story in a way that grabs prospective clients,  you will get the sale.

Thanks for reading,

Kim

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How They Want to Be Sold

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When we figure out what makes a client want to become a client,  we can then make that person a client.  Does that sound too obvious?  It is and it’s true.  Before the meeting,  we must first realize that each prospect is an unique individual and so a cookie-cutter sales spiel will not work and second,  when we do get a chance to sit down with him/her,   we must learn what his/her priorities are and then sell to those priorities.  What will give a prospective client the confidence to offer you a contract?

Learning that involves listening skills and that means it’s wise to let the prospective client do most of the talking during your meeting.  All we have to do is listen and respond in kind.  George W. Dudley,  Chairman of the Behavioral Sciences Research Press in Dallas, TX,  recommends that to seal the deal,  it’s imperative to structure your sales pitch to cater to the trigger that will give you the green light.  Here are three common agendas that clients will have in mind as they evaluate whether or not they’d like to do business with you:

I.      Just the facts

If your prospect is detail oriented,  then tightly focus on what your product or service will do for him/her.  Think features and benefits plus credible third party support.  This type does not enjoy small talk or being asked a series of questions,  unless they serve to refine the needs and objectives of the project.  He/she has a very good grasp of the project scope and the expertise required for successful execution.  He/she has a high regard for quantifiable data and has probably researched not only you,  but also your competitors.  This person doesn’t want to be your buddy,  he/she just wants to get the job done by whomever can demonstrate a solid track record of results.

II.    Be an adviser

At the opposite end of the spectrum,  there are those prospects who don’t quite know what they’re looking for.  In that case,  you have the opportunity to educate.  Ask lots of questions about the scope of the project and show the client how you can apply your expertise to ensure that objectives are achieved.  As you help this prospect to make a decision, you may be able to up-sell.

III.  Make it personal

Some clients prefer to establish a relationship with their Freelancers.  Here is where you lay the groundwork for repeat business,  which is a beautiful thing.  Solid interpersonal skills are required and it may take some time to build trust and get your foot in the door.  It will be necessary to demonstrate that you care about the organization and that you’re willing to spend time on customer service,  answering questions,  training staff,  etc.  You must be attentive and not just in it for a quick sale.

More next week and thanks for reading,

Kim

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Get Your First Impression Right the First Time

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Congratulate yourself.  You were lucky enough to get a good referral from one of your clients and you’ve been invited to meet with your newest prospect.  Because you’re smart enough to know that first impressions set the stage for success in any relationship,  you want to get this right. 

Allegedly,  there is research that shows a prospect will decide whether he/she might be willing to work with a Freelance consultant within five seconds of their initial encounter.   To get the most of those precious few seconds,  why not do some preparation to make sure that your first impressions do the job for you—and not on you!

Keep fit

Good health gives you a glow that makes you appear more attractive and competent.   It’s not necessary to emulate a runway model or ironman triathlete.   Just follow some sort of fitness regimen that suits you,  whether it’s 3-4 hours/week at the gym,  biking or walking to work,  or maybe playing in a softball or volleyball league.  Regular exercise brings many benefits,  including more restful sleep,  decreased levels of stress and higher self-esteem.  

A diet that includes plenty of fresh fruits and vegetables and modest amounts of protein and carbohydrates,  about 60-100 ounces of water each day and limited alcoholic beverages  is the other half of a good fitness regimen and will make you look alert and capable.  Top it off by getting seven to nine hours of sleep each night and abstaining from nicotine.

Visual signals

Like it or not,  everyone makes snap judgments based factors such as looks,  weight,  hair,  jewelry,  make-up,  facial expression and more.   Be sure your visual signals  communicate that you are the type of person your prospect will want to do business with.  Always look sleek and professional,  neither too casual nor overly formal.  If possible,  find out what the company dress code norms are before  your meeting.  However,  even if the company dress code is jeans and polo shirt,  you must do a little better  (think business casual in that instance).

Good greeting

Your greeting consists of your smile,  your words and your handshake  (or bow, as appropriate).   A smile conveys that you are pleasant and approachable.   The words you choose for your greeting should be appropriately formal and never too informal.   Your handshake should be firm and neither limp nor crushing.   Lastly,  make sure that you use the appropriate honorific:  Mr.,  Ms.,  Admiral,  Captain, etc.,   to demonstrate that you’ve done your homework and know how to address your prospect.

Smart agenda

A huge part of  first impressions hinge on whether you seem confident in yourself and what you have to offer.  Your prospect will sense whether you are prepared for the meeting,  or if you’re just winging it.   Therefore,  it’s important to know what you’d like to accomplish in the meeting.   A few days before the appointment,  start jotting down possibilities and come up with three or four reasonable meeting objectives.   Preparation radiates a poise that communicates credibility and competence.

Rehearse entrance

Now that you have all the components for creating a winning first impression,  give yourself the benefit of a dress rehearsal.   Practice how you’ll enter the room  (or if the prospect comes to you,   how you will stand and greet him/her),  how you will express your greeting and how you will shake hands or bow.   Rehearse it until you are comfortable with all aspects,  including the goals of your meeting agenda.  If possible,  videotape it and critique.  Good luck!

Thanks for reading,

Kim

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Smart Sales Call Questions

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Management guru Peter Drucker famously noted that in order to get the right answers,  it is first necessary to ask the right questions.  Whether the subject is love or money,  many of us do not ask direct clarifying questions because we are afraid of the answer.  It takes courage,  sometimes,  to hear the truth.  But in the end,  only the truth is useful. 

I recently found this list of sales call questions and they are a little scary because they cut right to the heart of a prospect’s motive and let you know what is real and what is not.   I vow to pose these questions in my next sales call because it is far better to know  what I’m dealing with.  Time is much too valuable to waste trying to wrestle an assignment out of a prospect who does not have the means or real motive to hire me.  Write these down and post them at eye level:

1.  In terms of time,  money and/or risk,  what business problem will working with me solve for your organization?

You’ll learn the reason the project is out for hire and assess your ability to do the job.  You’ll  learn whether or not there really is a project,  or if the prospect is merely checking out available talent.  Maybe the prospect only wants to compare the Freelancer they usually use to who else is out there?  If there is not a genuine problem to resolve with a timeline and budget attached,  then your prospect is only window-shopping and there is no contract here.

2.  How will you measure success 60 days after we begin working together?

The answer clarifies the goals and objectives you must meet if you win the assignment and also identifies the metrics that will be used to measure your progress as you work.  You’ll confirm that milestones and metrics have been set for the project and that it is real.  The prospect’s  seriousness and sincerity  (or lack thereof)  will be demonstrated in the response.  You will understand how you will approach the project and reconfirm whether you can meet expectations.

3.  How much better does my  “better”  have to be for you to bring me in on this project?

The prospect’s answer will reveal if he/she knows what they’re looking for in terms of whom to hire as a Freelancer.  Are the expectations reasonable in your opinion and do you have the wherewithal to meet them? Might you have to call in a subcontractor to meet a special demand or timeline?  You can assess the level of interest in your services and determine if you are a contender or merely filling out a list that must contain a certain number of names.

4.  How soon do you need to see progress or improvement for you to know that you’ve made the right decision in hiring me for the project?

Once again,  the prospect will show that he/she has thought things through,  has established clear and reasonable goals,  objectives,  timeline and metrics and recognizes success.  You’ll have another means to confirm that the project is real and there is something for you to pursue.

5.  What process will you follow in bringing me on as a provider of this service?

Process questions reveal how far ahead your prospect is thinking.  This question will demand that the prospect envision hiring you and think through what must be done to bring you on.  What budget is available and who else must sign off on your hire? If your prospect has only a fuzzy answer to this question,  then he/she may not have the authority to hire you.

Thanks for reading,

Kim

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Your Sales Pitch and What the Client Thinks About It

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Selling is a huge part of a Freelancer’s job,  because we don’t survive if we don’t sell someone on the idea of hiring us.   In other words,  a Freelance consultant is a salesperson first and foremost,  regardless of the services we provide.   We must keep our selling skills razor-sharp and be forever mindful of what a prospective client needs and wants.

Before you waste time making some grandiose presentation in your next prospective client meeting,   put yourself into the shoes of the person or team you’re trying to sell.   Because you’re in business too,  you know that every day  (or so it seems)  someone is trying to sell you something that you probably don’t need.

Take this reality test first.   Whenever you buy or sell anything,  ask yourself  these three questions,  which will be approached from your personal point of view when buying and from your prospect’s point of view when selling:

1.   What do I need this for?

2.   Why do I need yours?

3.   Why do I need it now?

These are simple and uncomplicated questions,  but they’re not always easy to answer.   When you can convincingly address these questions from the client’s perspective,   I guarantee that you’ll be able to sell them  (assuming that they have the budget).   This exercise forces us to a deeper,  less self-absorbed way of thinking about what we sell and how we sell it and will  result in a more effective sales presentation.

The first question,  “Why do I need this?”  forces the seller to expertly define the value proposition.   In the pre-sales meeting discussion,  ask questions that will help you understand why you’re being invited to meet with this prospect,  what the pressing needs and hot buttons are and what the client may be worried about.

Understand the objectives and how whatever it is you do fits into the big picture.   Begin to understand how what you offer can successfully achieve those objectives and ensure realization of the big picture goal.   Then,  figure out how to express the value of what you bring in language the client will understand.

The second question,   “Why do I need yours?”  is when the seller describes the unique differentiators,  the competitive advantages.  What would make the prospect pay you to supply this product or service?   Here is where we describe that which sets us apart,  why we’re better than the rest,  why it makes sense to go with us.  Answers to this question are formed in bullet points.   They are crisp and clear,  easy to express and remember.

The last question,   “Why do I need it now?”  is the most important of the three.   Here is where the seller states the most compelling  drivers—the need,  pain,  opportunity,  event,  etc.,  that will cause the prospect to make the decision to use your product or service and commence the buying process immediately and not at some yet-to-be-determined point in the future.

This question makes us think seriously about prime motivators and how to eloquently and succinctly express them to the prospect and make him/her want to do the deal right now.   Is the need for your product or service an immediate priority?

If you’ve taken the initiative to approach the client rather that the other way around,  you may find that you’re ahead of the curve,  that you’re presenting a course of action that the prospect isn’t prepared to take,  that he/she hasn’t yet bought into.  If that is the case,  you will have a long market education cycle ahead of you and may well end up empty-handed.   Conversely,  you may learn that you’re too late and the need for your solution has passed.

Nevertheless,   however you mange to get yourself in front of a prospect,   answering these three questions first will serve you well every time.

Thanks for reading,

Kim

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Probability Prospects

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You’ve just been introduced to a person who was not only happy to meet you because you have the chops to take on a hot project that’s on his/her radar screen,  but also has the authority to green-light your hire.  Oh, happy day!  You’re thrilled to do the card exchange as your newest prospect asks you to make contact so that the two of you can talk specifics.  You can almost taste the billable hours,  but how excited should you be?  Statistical probability can help you put a dollar value on your happiness quotient.

I found this intriguing formula that uses sales outcomes historical data and probability that allows you to calculate the expected value of your next prospect.  As has been noted in numerous posts and no doubt reflected in your own experience,  there is a randomness to networking and Freelance consulting.  In our effort to bring much-desired predictability and financial security to our lives,  the Freelancer’s  (and all salesperson’s)  objective is to control variables,  positively impact outcomes and therefore win more projects and generate more revenue.

Let’s say you’re talking to a prospective client about a project that you estimate should be worth $10,000.00.  The operative word is should.  $10K is the potential value and not the real value until and unless one is awarded the project.  If you don’t win the project,  then it’s worth zero.

Your project’s worth is impacted by the probability of successful close.  The following formula allows you to calculate the potential value of the prospect and the project throughout the various stages of the sales process.  Both the steps in the sales process and the values assigned at each step in the process are based on historical data provided by a large corporate sales force.  To refine the accuracy,  identify the steps in your usual sales process and record your sales success rates at each stage of your sales process.

I.     Identify the steps in your sales process

  •      Invitation to meet and discuss the project
  •      Initial appointment / discussion of of needs and benefits
  •      Verbal proposal / assessment of needs and benefits
  •      Invitation to submit written proposal

II.    Determine the probability of a successful outcome at each step

  •       Invitation to discuss project                                                      2%  success probability
  •       Initial appointment / discussion of of needs                       8%  success probability
  •       Verbal proposal/ assessment of needs and benefits      25%  success probability
  •       Invitation to submit written proposal                                 65%  success probability

III.   Calculate the dollar value at each point of the sale for a proposed $10K  project

  •        Invitation to discuss project                                                     $   200.00
  •        Initial appointment / discussion of needs                           $   800.00
  •        Verbal proposal / assessment of needs and benefits      $2,500.00
  •        Invitation to submit written proposal                                  $6,500.00

The key to customizing the outcomes probability formula for your business is keeping detailed records of  sales presentations from which to compile your statistics.   In other words,  here is yet another reason to document your business transactions so that reliable data will be there to guide business planning.

Thanks for reading,

Kim