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Rainy Day Strategies to Cushion Financial Uncertainty

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There’s been lots of talk about the U.S. economy over the past year or two and bad news has dominated the narrative. Rounds of lay-offs continue at enterprise companies: Nike announced plans to shed 1,400 jobs in April; Dell cut 10% of its workforce in March (11,000 employees), for the third year in a row; on May 5, the cryptocurrency exchange platform Coinbase announced a planned lay-off of 14% of its staff, or about 700 employees. Even the popular building contractor rating platform Angie’s List announced in January that 350 jobs would be cut this year.

Your one-person Freelance empire may be holding up despite lay-offs and rising gasoline and grocery prices but even those of you who hold the working capital needed to maintain normal business operations, pay living expenses and continue to fund your retirement account may nevertheless have a gut feeling that warns you to spend cautiously and trim expenses to bolster your savings cushion. An analysis of your financial position is how you begin your resiliency campaign.

Assess business financial condition

The road to financial resilience begins with examining the business’ financial position by conducting a cash-flow analysis. The process will reconfirm the sources of your earnings and how much you pay to keep the business rolling. The cash-flow analysis will illustrate how and when revenue streams bring money into the business (receivables) and the timing and costs of operating and other expenses (payables) that take money out of the business. You’ll take the measure of how and from which sources business revenue is derived, as well as your spend for fixed and variable expenses. You’ll also confront the business top line earnings (gross sales) and bottom line (net) earnings. Your mission is to analyze cash-flow over 12 months, and making note of seasonal variations, so that you’ll obtain a big-picture understanding of your entity’s financial rhythms.

The cash-flow analysis invites your business to “tell” you where you’re making money and where you spend perhaps too much and should consider a less-costly alternative. Identifying areas where spending has you leaking cash is especially helpful if local or national economic conditions make clients inclined to limit the billable hours that feed your revenue. Fewer billable hours will magnify those pesky financial gaps and escalate the impact of a cash crunch crisis, should it occur. Ask your accountant or bookkeeper to run the numbers, or contact your local Small Business Association SCORE to make an appointment and obtain some (probably) free and trustworthy business finance management assistance.

Build a budget that reflects financial reality

Kick-off your fat-trimming budget project by reviewing variable and fixed expenses and verifying how each one contributes to maintaining operations, supporting business growth, supporting customer service and the customer experience, or enabling professional development that reinforces your standing as a thought leader and expert in your field. Whatever expenditures do not at least indirectly support the business or your professional position may need to either be funded at a more modest level or eliminated. Developing your revised budgetary focus does not, however, mean that you must slash as many expenses as possible. Your new budgeting approach should be strategic and guided by business goals and economic reality. Here are useful guide posts:

  • Cut expenses that do not support revenue generation, business operations, or the customer experience.
  • Protect spending on marketing and sales functions to encourage revenue, e.g. client acquisition and retention.
  • Build a cash reserve that can float three to six months of business operating expenses.

Use scenario planning to forecast a worse-case possibility and use that perspective to forecast the next 12 – 18 months of operations. What might your finances look like if revenue drops 10%? Next, consider a more disturbing future and forecast the financial challenges you would likely encounter if, heaven forbid, revenue drops by 25%? It doesn’t feel good, but the scenario planning component of your financial defense plan will force you to anticipate how you might manage and inspire you to think of how to cushion those harsh and stressful circumstances with some savvy advance planning. It’s always easier and more effective when difficult decisions are evaluated and potential remedies are devised when you are calm and not in a panic.

Before any storms arrive, remember that your best defense is a good offense. If at all possible, delay major capital purchases, but remind yourself to avoid severely slashing your marketing budget. You may decide to shrink it, but do not lose sight of the power of consistent marketing and its place as one of the three pillars of a healthy business. Companies that maintain their marketing presence during business downturns consistently outperform businesses that sharply limit marketing activities when the recovery arrives.

In fact, refocused marketing strategies and campaigns could surpass the effectiveness of your current, perhaps more costly, activities. Stepping back from certain paid advertisement and instead doubling down on publishing marketing content—which will cost time, that other valuable resource—could yield excellent results. To the best of your ability, and in accordance with what aligns with your business solutions and customer personae and preferences, consider one or more of the following:

  • Invite a client to participate in a written or video case study. It’s a highly persuasive tool that guides prospects to envision how your solution could resolve their challenge or help a mission-critical goal to be reached.
  • Look for opportunities to portray yourself as a thought leader; that could include moderating or appearing on a panel, speaking at a local business or industry conference or other meeting, teaching a credit or noncredit course in a subject that is aligned with the solutions your company provides, or obtaining an invitation to speak in a webinar or podcast.
  • Look for public relations opportunities that will enhance your visibility and strengthen your brand image. If you are teaching or speaking at a venue that’s open to the public, send a press release to a community newspaper or event listing sites. Also, post your speaking or teaching engagement on your website and social media platforms.

Diversify revenue streams

If your Freelance entity offers just one product or service, you are potentially quite vulnerable to the winds of economic instability. A shift in the competitive landscape, or a new tech product, for instance, can threaten your ability to make a living. Especially in a solo earner household, if revenue earning opportunities become scarce, the outcome could be difficult.

You might not see a quick fix for your problem, but you could create one by asking a question. That is, it could be worth your while to ask clients with whom you are currently engaged if they might be interested in expanding the work you do for them? Frame your proposal in a way that illustrates a desirable and tangible competitive advantage that the client’s company would obtain when your expanded work is implemented. Your clients may help you make lemonade of the lemons and provide you with a new income stream that you hadn’t considered. A complementary service that can be delivered as an add-on or upgrade might also inspire a client to envision how you might bring more value to his/her organization. Similarly, tiered pricing that offers a lower cost basic option as well as a higher-priced premium alternative that provides more extensive service, could bring a new revenue source to your organization.

Then again, it may be more feasible to develop an external revenue stream and explore the possibility of a side hustle. You may have noticed that most mentions of side hustles involve an entrepreneurial angle but that does not have to be the case. Traditionally, a side hustle was an under the radar job that wasn’t discussed with your colleagues. Just 10 years ago, a side hustle could have found you plowing snow in winter, clearing out dead leaves in autumn and performing basic yardwork such as weeding, mowing lawns and pruning forsythia and rose bushes in spring and summer.

BTW, independently or traditionally employed workers who take on a side hustle are for the most part not in financial distress. In fact, those who earn $150K annually are more likely to have a side hustle than those who earn $25K – $50K per year. But regardless of your financial circumstances, a side hustle is a way to future proof your financial position and build a cushion against financial uncertainty.

Leverage external financial resources

Grants, SBA loans and alternative lending programs are created to support business leaders as they plan to scale or aim to increase working capital that’s intended to protect viability during difficult business conditions. If rumors of possible economic uncertainty reach your ears, envisioning what a survival plan for your entity might look like is smart thinking. Sooner rather than later, make it a point to research your options, so that you are apprised of eligibility requirements and timelines that will allow you to prepare and survive.

If your business is carrying significant debt, understanding the landscape of small business debt relief options, including what’s available through programs like those outlined by the Consumer Financial Protection Bureau, can be the difference between survival and losing your beloved business. Also, revisit external financing strategies that match your repayment timeline to your cash-flow cycle.

In closing, be aware that economic instability that periodically occurs in your marketplace is not unusual. Every independently employed professional, traditional business owner and even employees will experience financial challenges at least once. Business leaders who consider financial resilience a given for which they consistently prepare, instead of an emergency response that’s cobbled together in a panic not only survive financial fluctuations, but often emerge stronger once “normal” business conditions return.

Thanks for reading,

Kim

Image: © New England Coin Exchange Cranston, RI

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The Value of Networking

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Relationships are the beating heart of humanity and a factor that, for better or worse, impact your fortunes in life. In the professional sector, the process of networking presents opportunities to meet business colleagues with whom you might cultivate (mutually) productive relationships. Your willingness to meet and greet colleagues you encounter in various settings can open the door to relationships that bring tangible benefits to your business or career. Wherever conversations and handshakes can take place, even the sidewalk in front of the Apple store where a crowd of hopefuls waits to buy the next cool device, can be a networking opportunity.

Whether by intention or by chance, you never know how or when you’ll meet someone who will bring a positive impact to your life or business. Networking, wherever it occurs, is a low-risk gamble that can deliver a sizeable pay-off—information or insights that sharpen your business acumen, an introduction to a prospective client—or maybe finding a great tennis partner. Whatever happens during your adventures in networking, the benefits you receive will be better if you prepare in advance for the experience.

Develop objectives

As noted, networking has the potential to have a powerful influence on your business and for this reason, a well-planned marketing strategy will not overlook this resource. Smart Freelancers take networking seriously; you get the ball rolling by first strategically evaluating the potential value of the networking events you might attend. In other words, it’s important to understand why you think it’s a good idea to attend certain events? “To network” is an incomplete answer. What do you want to happen?

Well—maybe you recognize the name of the speaker and you like the topic? You could pick up some useful information and hope to reconnect with an acquaintance or two whom you haven’t seen since the pandemic. You’ll be off to a good start with those two objectives. Now, consider if there is some information or insights your colleagues, if they show up, might share with you? Could it be that you’re thinking of offering a new service, or you’ve been investigating the potential of a niche market and one of your buddies could give you some feedback? Or maybe the program speaker can address your questions with you privately, after the talk? Now you’re on your way!

Networking requires a certain amount of time and money and you owe it to yourself to create a rational business case for your networking “why” by developing objectives that can be tied to tangible business outcomes or support one or more objectives. Networking needs an agenda, like touching base with a colleague or two because your recollection of their experience and relationships makes you suspect that either or both could give you some actionable input.

Be sure to check out the RSVP list, which the event organizer may have posted on the website, and confirm that your buddies—or someone else you’d like to meet—plans to attend. Whether or not you see familiar names on the guest list, there are basic questions that can serve as your networking agenda and almost guarantee a successful outcome, however modest. 1.) Meet a client. 2.) Get a referral. 3.) Get information. More potential agenda items are listed below.

  • Customer acquisition: Are you looking for new clients? Learn how clearly and concisely describe the profile of your ideal customer to colleagues you meet and connect with.
  • Strategic collaborations: Do you need a business partner or investor? Or maybe you’d like to find a Freelance videographer to join you on a project every now and again?
  • Investor: If your company is thriving and scaling in the form of growth or expansion is on your mind, you may be on the lookout for a knowledgeable and trustworthy investor who is willing to help you fund the plans for your enterprise.
  • Research & feedback: Is there a new product or service you’d like to test the waters with? Obtaining direct, first-person feedback from potential customers or industry peers provides useful, actionable, insights.

Attend the right networking events

Not all B2B networking events will be appropriate for your industry or business objectives. The “best” events depend entirely on what you’d like to make happen. You wouldn’t wear a tuxedo to a casual coffee meetup and similarly, you shouldn’t attend an emerging technology summit when you’d like to meet HVAC (heating, ventilation, air conditioning) specialists.

When investigating your networking possibilities, consider the event’s audience and how connecting with those who attend will be beneficial for you and therefore worth the time and money you’ll invest. Start with your objectives, then match them to the right event and develop a reasonable agenda that puts you on a path to a worthwhile networking outcome. Don’t forget to check the Small Business Expo’s Event Calendar for upcoming networking opportunities designed for for small business owners in your area.

Pre-meeting prep

Once you’ve chosen your event, devise your onsite strategy, from the initial meeting with colleagues to conversations that can segue into “What brings you here and what do you do?” questions to graciously inviting follow-up, if a post-event conversation appears to be mutually agreeable. If one or more colleagues are on the RSVP list, consider how your target contacts might be able to share info, give feedback, make a referral, or make an introduction on your behalf. You can rehearse how you might adroitly make the ask.

  • Research attendees: Most nationally known professional associations, industry expos and skills-building conferences post attendee lists on the program website; meeting organizers recognize the selling power of knowing who is on the RSVP list.
  • Upgrade elevator pitch: Meeting colleagues while networking is similar to an interview with a prospective client. In both instances, you must concisely and powerfully articulate your value proposition; as you describe your solution will help your a prospect to resolve a pain point or achieve an important goal. Distill your pitch until you can effectively deliver it in 20-30 seconds.
  • Note-taking app: Immediately after a conversation with a colleague, make it fast and easy to document key details of the conversation and future actions. A note-taking app will allow you to efficiently capture and organize your thoughts expressed as notes, drawings, images, or URL links and store it in the cloud for you to access on your devices. Expedite personalized follow-up by recording names, company, industry or expertise, discussion topic and agreed-upon future actions. Adding details (e.g., “mentioned s/he swims regularly”) will enable you to personalize follow-up communication and enhance the quality of your CRM data.

Positive first impression

The goal while meeting and greeting colleagues and facilitating potential relationship-building opportunities that might lead to a business collaboration or partnership of some kind is authenticity, so be your personal best self. Extend your hand and greet others with friendly eye contact, a warm smile and a firm handshake. On the no-fly list are: Card spamming—avoid the promiscuous distribution of your business cards, which is very annoying. Instead, exchange cards after a meaningful conversation. Monologues—networking and all conversations are a two-way street. Ask questions and listen more than you talk to obtain useful info and insights. Hard sell—no one wants to be sold to immediately. Focus instead on building rapport and understanding needs first, so you’ll learn where, how, or if your solution can address the contact’s goal or pain point. See below for behaviors that will enhance and optimize your networking fortunes.

  • Active listening: This is your superpower. Ask thoughtful questions and truly listen to the answers. People remember how you make them feel, not just what you say. This helps you gather “insights” into their needs.
  • The “Give before you get” principle: Offer value upfront. Can you share a relevant industry insight? Make an introduction? Recommend a helpful resource? These actions build trust and reciprocity and promote strong relationships.
  • Quality over quantity: Focus on having a few meaningful conversations that may lead to business opportunities or actionable insights, rather than dozens of superficial gab fests.
  • Open body language: Smile, maintain eye contact and avoid crossed arms. Approachability is paramount.
  • Graceful exits: When a conversation reaches a natural end, have a polite way to disengage. “It was a pleasure speaking with you, I see someone I need to catch before s/he leaves,” or “I’d love to follow-up on this topic later. Enjoy the rest of the event!”

After the handshake: nurturing business relationships

The business cards handed to you won’t bring a client or generate revenue on their own. The post-event phase is critical for moving new contacts from casual acquaintances to valuable allies who may be willing and able to directly impact your client list and annual revenue.

Nurturing your valuable relationships, whether new or long-standing, is a continuous process. Step up and offer info, insights, an introduction, or other help you can give to those with whom you are already acquainted, from an event speaker to others whom you meet during your networking adventure. You may be able to help in the moment but if necessary, consider inviting follow-up that will carry relationship-building into the future. When you hand your card to someone, make it clear that your style of networking is a two-way street.

  • CRM for contact management: Do not neglect to add new contacts to your database, with detailed notes that memorialize in your customer relations management tool the conversations you were so lucky to have. Now you’ll be able to smoothly pick up the thread when conversations continue. Schedule reminders to invite follow-up.
  • Social media engagement: Don’t just connect on LinkedIn; engage with their content. Comment thoughtfully on their posts, share relevant articles and diplomatically keep yourself at top-of-mind.
  • Share valuable content: If you discover an article, report, or event that you suspect would interest a contact, share it with them. Be selective with what you share as you position yourself as a helpful resource.
  • Make strategic introductions: If you know two people who could benefit from connecting, offer to introduce them. A good introduction is a powerful way to add value to your network.

The 48-hour follow-up formula

The real work begins after the networking event. The clock starts ticking as you leave the room.. The business cards handed to you won’t bring any clients nor will they generate any revenue until you get busy and keep the momentum going. The post-event phase is critical for moving contacts from casual acquaintances to valuable allies who may be positioned to directly impact your client list and annual revenue. Speed and a welcoming, personalized follow-up approach are your action items.

Your post-networking activity is to continue the conversation; furthermore, you must avoid stumbling into a sales pitch and also kill any signs of desperation. Your follow-up contact will be most effective when your tone is friendly and relaxed, but also purposeful—you have an objective and moving things forward is imperative. If it is you who will help a colleague further his/her objective, follow-through with whatever you committed to in a timely fashion. You can reach out by telephone, but a videoconference will be more effective and, if geography and schedules allow, a face2face meeting is better still.

  1. Personalized message: You’ll demonstrate your appreciation and authenticity to those colleagues you’ve agreed to follow-up with when you reference specific details from the conversation. A good way to personalize your outreach is to say something along the lines of “It was great discussing (the topic) with you at (event name) yesterday. Your insights on (the worthwhile wisdom) were particularly interesting.”
  2. Provide immediate value: If you referenced an article that your new contact found interesting, attach it to your follow-up message. If you made a strategic introduction on behalf of your new contact, mention that you were delighted to connect the two of them. If you gave feedback on an initiative or some other business question that your contact has been exploring, reference the interaction and invite him/her to reach out if there is another question or clarification that would be helpful. Providing value reinforces “give before you get” relationship-building behavior that builds trust and increases the likelihood that your favor will be appreciated and returned.
  3. Propose next steps: So you have an objective or two in mind and an action plan is needed to move things forward? In your message, suggest an in-person coffee meeting if geography allows or a follow-up videoconference call. “I’d love to continue our conversation about (proposed follow-up topic). Would you be open to a 30-minute face2face or video call next week?”
  4. Multi-channel outreach: Your first outreach method should be either email or text, whichever seems most appropriate for your new colleague. Next, since it usually doesn’t seem too pushy to invite new contacts to connect on LinkedIn send a request. Keep personalization going by composing a short invitation note that references where you met, as opposed to merely clicking on the prefab LinkedIn invite. Moreover, if your new colleague posts interesting content on the platform become a follower and, when you have something relevant to add, respond with a comment and not just a like, to demonstrate that you’re paying attention and understand the new contact’s value as well.

Thanks for reading,

Kim

Image: © NurnbergMesse Group

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Solution for A Freelancer Pain Point—On-Time Payment

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The often unspoken, always frustrating and sometimes embarrassing conundrum that all but the best-connected Freelance professionals are almost certain to encounter at some point is the dilemma of late invoice payments. Talk about a pain point! Waiting for money to arrive can keep you awake at night. A pile-up of late payments can do a lot of damage to a Freelance business and your credit score, too. I routinely include on invoices the preferred payment timeline, which was originally 30 days, but several years ago was shortened to “payment is requested upon receipt of this invoice.” It’s important to set expectations regarding timely payment for services rendered.

It’s been documented that cash-flow difficulties are among the leading cause of shutting down an independent entity. I don’t think former Secretary of State (1973-1977) Henry Kissinger had to worry about erratic receivables when he returned to civilian life and pursued independent work. The powerful always get paid. Readers of this post, I surmise, ought to devise a pro-active invoicing and collections strategy to defend yourself against 45+ days invoice payments that can undermine your intention to manage your own business accounts payable, along with your personal expenses. Slow payments leave one vulnerable to exorbitant late fees.

Your value transcends billable hours

The moral of the story is, avoid hourly-paid work assignments whenever possible. Clients who outsource hourly project work often have a nickel and dime perspective and they are inclined to under-value you and your solution. The axe they’ll use to chip away at your billable hours, no matter how modest, is always within reach, so that a few more dollars can be made available to fund a project that decision-makers feel outranks your work. The billable hours mind-set labels hourly workers (you!) as a commodity. That your skill-set qualifies you to become a collaborator who is capable of delivering sustainable positive outcomes to the client’s organization is unrecognized by the penny-wise, pound-foolish billable hours types. Those individuals are unable, or unwilling, to recognize strategies and actions that you are positioned to recommend might help the client’s company break out of a stagnant status quo and move forward.

Your first order of business is to transcend the hunger for revenue, which may cloud the confidently rational thinking needed to envision a more sustainable business model for your entity. The goal is to upgrade how prospects and clients see you, the caliber of the solution and the contributions you can make to the client’s organization. For guidance, lean into the fractional model of independent working.

Much will depend on your deliverable and industry, but you may find it useful to reframe the perception of your B2B service and interpret the expertise and insights that are the core of your work and promote it as a systemized package, a process improvement system, that once instituted enables your client’s organization to optimize the realization of the mission and goals. Yet, the billable hours model limits the expression of your value and reduces your deliverable to as a band-aid fix. Reframe how you articulate your deliverable and demonstrate that what you offer is not a commodity.

When you’re invited to manage a large, one-off project, you can set the timing of invoice payments by stipulating that the client make an initial payment of 10% – 15% before you begin work. One or more interim payments can be triggered when you achieve project milestones that you and your client will identify together. Your goal in this instance is to limit the final payment to no more than 25% of the total project fee. Include the payment agreement in your proposal and reconfirm it in your contract. Clients are more likely to take retainer fees and major project agreements more seriously than hourly work and they are therefore more likely to pay your invoices on time.

Find a financial system that you will follow

In the final chapter of this story, you’ll acknowledge that Freelance professionals need a financial management system to document your monthly revenue generated, track where your money goes and how much you spend and guides you to separate your business and personal transactions. Good financial management will help you stay organized for quarterly and annual tax seasons and will also support your business (and personal) decision-making by confirming what you can afford to spend and when.

You may find financial management unpleasant, but no adult can escape, whether one is an independently employed Freelance professional or a W-2 employee. In particular, those who are often faced with irregular payments must buckle down and conduct a money minding session every month. You’ll need a tool for financial record-keeping and your choice will depend on your personality type. You may like a digital platform that offers a good option to single-person business entities, as does Quicken; or you may gravitate toward the Microsoft Excel spreadsheet. If your budget allows, you can outsource this role to a Freelance bookkeeper.

Your financial picture is foundational to nearly all business planning, to ensure that you’ll be able to carry out your actions. A system that works is one that gives you a clear view of your available funds, money that’s available to support business operations (working capital) bill payments you must make (accounts payable) and outstanding client invoices (accounts receivable). Establishing and following a financial management ritual provides an accurate picture of your financial capacity In Real Time and lets you know when you have the green-light to move forward without second-guessing every transaction. Just do it.

Thanks for reading,

Kim

Image:  Edward Pevos for MLive

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Sales Expectations Crashing? How To Solve It.

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Let’s get serious. Are your products and services bringing in the revenue you expected, based on your pre-launch market and customer research? Or do too many sales calls crumble and bring you rejection instead of revenue? It is true that most B2B sales conversations result in No instead of Yes—but is a flashing red light signaling that you’re losing an unacceptable number of sales?

Failed sales is a common scenario in businesses and sadly, those who face this problem for an extended period must close their doors. There are a few usual suspects known to hasten the demise, such as insufficient working capital/cash-flow (29%) and an improper product-market fit (34%). A walk through your neighborhood is bound to reveal empty storefronts where once a happy and hopeful B2C entrepreneur expected to find sustainable success and become a familiar face in the community. The Bureau of Labor Statistics reports that of the 34.8M active small businesses in the US in 2025 (82% solopreneurs), 20.4% failed in the first year and 45% failed within five years of operating.

If your sales expectations are crashing, you must take action in short order. Reconfirm who comprises your best customer groups and their motivations for buying your category of services or products by doing some market research. If you detect a shift in customer behavior regarding the need for your offering, extend your research to explore the possibility of providing another service, an offering that has a more extensive pool of customers that will welcome your new offering and will be accessible to you. Your adjusted offering—which might be aimed at another customer group— will become the launchpad for executing a sustainable pivot. While you research and strategize to correct your product-market problem, consider trying to get hired into a side-hustle job, so you can get paid and build up your paltry cash-flow.

There could be another, less obvious, obstacle to your sales problem. Think carefully; how do you describe the Unique Selling Proposition of your service or product and “paint a picture” that helps your prospect envision the value delivered by your offering? Your difficulty with closing deals and making sales might be the result of what you say, or do not say— a failure to communicate. Outside of a viable product-market fit, how you explain and position your service or product for the prospect is the most important part of your sales strategy. If you expect to make sales, it is necessary to help prospects connect the dots between their needs, goals, or pain points and the logic of your solution. Your failure to have successful sales calls might boil down to a handful of common misunderstandings that are fixable:

  • Prospective clients do not understand the When, Where, or Why of your offering.
  • Prospective clients are not convinced that your solution can solve their problem, or the benefit, as the prospect understands it, seems insufficient when compared to the time and money required to implement.
  • You are trying to sell to the wrong prospect (product-market disconnect).

Know why customers buy your offering

Whether you’re wearing your sales hat or marketing hat, you must learn to communicate unambiguously the most important aspect of your brand story—why your solution is the best fit for the prospect’s need, goal, or pain point. Open your favorite note-taking app—or use the back of an envelope—-and list the core capabilities and benefits that your product or service brings to customers and articulate clearly what it all could mean to them. You must deliver a credible use case explanation that spells out how and why your offering produces the desired outcomes. Create a script that conveys a message that connects the dots and resonates with the prospect’s agenda. Your mission is to help the prospect understand how and why your offering will yield the best return on investment.

When re-assessing and re-booting your USP, remember that what may seem clear to you might confuse or overwhelm your listener—the prospect. Bear in mind that constructive feedback is your friend and can help you to more effectively articulate the message. The most effective way to obtain reliable feedback is to ask those who know your offerings:

  • Ask customers. Those who have successfully used your product or service understand how, where and when to use it and they know how your offering performs in real time. You may be surprised by what a boots-on-the-ground perspective reveals about your product or service. Customer feedback can give you powerful insights into what matters to customers.
  • Ask colleagues who know your market. Professional colleagues who are in an adjacent business to your own, or who have some familiarity with your customers or marketplace, may be able to give you a couple of pearls of wisdom regarding what your prospects may value about your solution.
  • Investigate social media comment sections and industry publications. Information included in published research or case studies found in industry magazines and newsletters may give you the heads-up, or a deeper understanding, of any number of issues in your marketplace. The user-generated content found in the comments section of social media platforms are another trove of grassroots insights and wisdom that flows from users of your category of service or product. The commenters are not your customers, but you can still learn what is important to those who use a similar offering.

Are speaking to the decision-maker?

You know, identifying the decision-maker for your sale is not always easy. I’ve been gaslighted several times by someone who has a job title that makes it easy to masquerade as a decision-maker when that is not the case. I’ve also been told by certain prospects that s/he is the sole decision maker, when that also is not the case. Heads-up—unless you’re talking to a fellow Freelance professional, there is rarely just one decision-maker for major projects. Obtaining access to an official member of the decision committee for your sale is not always easy. Moreover, speaking with the committee member who has the most clout might be impossible. Sometimes the heavy hitter prefers to hide in the background. Unless you have a friend inside the organization, all you can do is ask and hope that you get an honest answer.

The goal here is to avoid wasting time trying to sell to someone who is unable to green-light the sale. One of the most frustrating experiences in sales is devoting time and energy on a so-called prospect who doesn’t have the authority to make purchasing decisions. Serious prospects have the authority to buy. Masquerading prospects tend to be evasive or vague about the decision-making process. If the prospect repeatedly tells you s/he must consult with someone else and, especially, if the sales never seems to move forward, it’s likely that you have been hoodwinked by an imposter and you are wasting your time. Sharing key details with the other members of the decision committee is to be expected. Being unclear about internal steps, such as the preferred delivery timeline or the purchase budget could be a red flag.

Early in your sales conversations, it’s essential to ask about the prospect’s decision-making process. In your first meeting, ask questions like, “Who else will be involved in the decision?” or “What steps will we go through for the final approval?” to help confirm whether or not you’re speaking with the right person. Note that genuine prospects will ask you specific performance, delivery and pricing questions, or will want to know how your offering compares to a competitor.

 Product-market disconnect/wrong prospect

Not everyone is your prospect, even if it appears that certain potential customer groups should be interested in your solution. It’s disappointing, but even an excellent product or service cannot be of use to everyone. If you approach would-be prospects, who politely decline, use it as a learning opportunity; you might receive information about your target customers that can help you strengthen your USP pitch. But whatever—if you put into motion the remedies discussed above, you’ll likely have more than enough sales calls to make you forget about the one that got away.

Thanks for reading,

Kim

Image: © Dreamstime 2023

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2025 Year-End Business Report Card

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Reflecting on the waning year is the best way to give yourself an honest and very helpful big picture understanding of what occurred in your business. You will come face2face with planned initiatives, unexpected opportunities and risks that paid off, or at least broke even, and those that, unfortunately, failed to fulfill your hopes. , and what you might adjust to reach your 2026 goals. A year-end review suggests which strategies will likely build on successes, gives insight into what you should eliminate, as least for now, and what might come through for you in the new year, perhaps with some adjustment. A year-end review encourages productivity that brings good results by helping you move forward and build momentum—and ensuring that you avoid reinventing the wheel or repeatedly start from ground zero, which is sure to slow your progress. 

Review the year in business

When reviewing the past 12 months of your business, there are a few questions and metrics that will give you a good baseline of what you would be wise to pursue, adjust, or eliminate during the upcoming year.  After answering these questions, you can more effectively map out your goals for next year. Set attainable, data-driven targets that challenge, but are also within reach. This is also a great time to identify if you might want to outsource certain functions in the next year to help you reach your 2026 goals.

  • How many projects did I work on?
  • What was my total sales revenue?
  • What were the sources for these deals? (e.g., referrals, networking, social media, website marketing funnel)
  • On a scale of 1-10, how would I rate my new client prospecting efforts?
  • How consistent was I with marketing—blogs, newsletters, webinar appearances, social media? Did I create and follow outreach strategies or was it intermittent?
  • What could I have done better in terms of marketing?
  • What did I do exceptionally well that contributed to my success?
  • What area did I struggle with the most? (Hint: this may be an area to either get help with or improve in 2025).

Evaluate performance of lead generation strategies

  • Inbound marketing continues to be an absolute requirement for B2B growth. Creating a consistent stream of leads is very important if you want to build a business that is sustainable and that you can scale and grow. The goal is to invite a steady flow of leads from different sources. Inbound marketing is considered the most practical and method for keeping your pipeline filled with prospects who are curious about your services or products. Inbound marketing is also efficient, with numerous marketing studies confirming that inbound marketing campaigns and activities generate about 54% more leads than outbound marketing. Furthermore, inbound marketing costs up to 62% less per lead than traditional outbound marketing. In 2026, inbound marketing appeals are predicted to remain the primary source of how B2B buyers themselves expect to discover, evaluate and shortlist vendors, as 80 % of all B2B sales interactions will take place across a spectrum of digital channels, from company websites to social media platforms. Think of inbound marketing content and activities as a magnet that pulls in already-curious prospective buyers. The purpose of inbound marketing is to educate, build trust and generate qualified leads by providing valuable, problem-solving, content. Be advised that most of the buyer’s journey unfolds long before a prospect reaches out to a select group of potential vendors to obtain deal-sealing (or deal breaking) information. Those on a serious buyer’s journey already have a list of key questions to ask, to discuss and learn about the particulars of a service, or would like to see a product demonstration. Note that inbound marketing leadgen results in the prospect initiating contact with companies that look promising as they define it. The content you create (or fail to create)—stories, education, testimonials, case studies, conversations—determine whether you’ll be chosen to make the prospective buyer’s vendor shortlist. Review and assess your inbound marketing activity and confirm which campaigns were the most successful and which may benefit from a reworking. Your inbound marketing activity most likely includes some of the following activities.
    • Thought leadership (producing relevant and valuable information—e-book, case study, webinar or podcast appearance, blog, newsletter)
    • Sales/marketing funnel (company website)
    • Social media posts (text or audio/visual formats)
    • Referrals
    • SEO search (company website)

  • Outbound marketing content and activities enable you to broadcast your pitch to everyone in your chosen target demographics. The style is push: you/your brand initiates the contact with prospects whether or not they’re hyper-local in-market as you disseminate your message (“This is who we are and why you want to know us”). Outbound marketing methods are typically promotional—attention-grabbers, such as cold emails and direct mailings (recipients are often taken from membership or other lists), conference or event sponsorships, paid display advertisements/ paid social media ads.
    • Public speaking (guest speaking, teaching, panel/moderator) 
    • Face2face networking events (business groups or social gatherings)
    • Email updates
    • Participating in community charity events 
    • Paid online leadgen (pay-per-click)

Create a content calendar and map out marketing campaigns

Planning and scheduling your content is one of the best things you can do for your business—and your time and creativity. There are a few ways you can look at the year and decide the message of your content. Readers who have been with me for a couple of years or more will, for example, recognize that in late June – early July, I publish an annual Summer Reading List, which consists of 10 business and leadership-themed books that should appeal to those who are independently employed, whether as Freelance consultants or small business owners. Certain books might also appeal to traditionally employed executives in either the for-profit or not-for-profit sectors. In late November, I publish a December holiday client gift suggestions list.

Which events that occur in your industry might serve as focal points for your content? Could it be “back to school,” which could prompt you to present related content in August, or the arrival of a season—wintertime skiing and ice skating, an early spring marathon, an annual national conference that is regularly attended by members of your core target market, or Small Business Saturday in November?

When you develop a plan now, you can expect to emerge with a draft that you can finalize as you get closer to scheduled target dates for your content. Your content calendar draft will support and encourage you to publish relevant marketing content that’s timed to maximize its impact. Planning is so much better than flying by the seat of your pants!

Budgeting

In sum, the year-end review of your business entity can be a catalyst for growth and success. It encourages continuous learning and improvement and inspires you to think and act proactively. Your year-end review is among the most effective processes you have to evaluate the overall performance of your venture and by so doing, give yourself an opportunity to learn from successes and failures, make informed decisions and set challenging, yet realistic, strategic goals for the new year. In your review, you can analyze your 2025 actual spend against your budgeted expenses. You’ll be able to identify spending variances and learn why budget targets were exceeded. Insights from your 2025 budget review will assist in building realistic budget forecasts for 2026.

Keep in mind that forecasting is about anticipating the funding you’ll need to implement marketing campaigns, as well as paying for business operating expenses, from bookkeeping expenses to business association member dues to purchasing customer relations software to enhance your marketing functions. One hand washes the other when your leadgen marketing funnel brings in the revenue that enables you to operate at peak performance (as you define it)!

So—how did your budget and business expenses line up in 2025? Consult your financial statements— Balance Sheet, Profit & Loss (Income) Statement and Cash Flow Statement and conduct a financial health assessment of your entity. These documents provide a snapshot of your company’s assets, liabilities, equity, revenues, expenses and profits throughout the year. It would be a great idea to discuss company financials with your business accountant, to get his/her perspective on how to enhance your company’s sustainability and financial possibilities. Why not send an email now and get a meeting on your January calendar?

Happy New Year and thanks for reading! I look forward to greeting you in 2026.

Kim

Image: © Freepik

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B2B Sales Best Practices

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In our last post we examined a few B2B marketing best practices, basic strategies and activities that have earned a reputation for dependably producing successful outcomes; marketing strategies and activities augmented by AI-powered technology have proven to be especially effective. Marketing best practices are routinely followed by those who are considered leading marketers—a savvy and practical lot who avoid the miscalculations of strategies that are, unfortunately, associated with marketing laggards. Marketing leaders know that strategies and activities grounded in best practices are capable of not only producing your organization’s personal best year-end revenue and profit, but also generate business momentum that can propel you into a very happy 2026.

Now that we’ve taken a dive into marketing and learned what’s likely to inspire prospects to ask that you schedule a sales conversation, we can next examine what can be said to represent B2B sales best practices, in particular as they apply to Freelance professionals and small business owners. As always, the goal is to produce healthy revenue and profit results and avoid being seduced by strategies that make sense for, perhaps, an enterprise national or multinational corporation but are probably unattainable for smaller entities. In our continually evolving B2B marketplace, it’s necessary to recognize when to follow traditional B2B basic business practices and when (and which) of the dizzying array of new technologies are capable of facilitating your revenue and other business goals.

Navigating the complexity of B2B purchase decision-making 

B2B sales cycles are typically much longer than their B2C counterparts. The purchasing approval process often requires input from influential stakeholders and it is standard for multiple decision-makers to be involved. Complicated negotiations may be needed to reach agreement on pricing, payment terms and logistics before a sale can be approved. As a result, it is common to meet not just with the project team leader, but with a decision committee when you are invited into a sales conversation.

So—let’s figure out how to survive the lion’s den and earn a chance to rack up as much sales revenue as possible before the 2025 finish line. As usual, the best sales techniques follow a “work smart and keep it simple” philosophy. An effective sales process focuses on more than a financial transaction—the necessity of relationship building, the customer experience and also repeat business and referrals that grow the client list remind you that your sales strategies and skills are building blocks of long-term business growth and are integral to future-proofing your organization. The five steps detailed below are sure to help you improve your sales performance:

  1. Whenever possible, schedule face2face sales meetings to facilitate relationship building opportunities. Teleconferences are useful and very convenient but when possible, especially for the first meeting, find a time and place that will enable all participants to attend in person. Furthermore, it will also benefit you to schedule a face2face meeting at what you anticipate will be the meeting during which you expect to clinch the sale. Facilitating good communication and encouraging transparency and collaboration are easier to achieve in face2face interactions and make it easier to both encourage the sale and plant the seeds of a good client relationship.
  2. In-person meetings provide a forum for you and the decision team to get to get comfortable enough to share relevant information and build trust. The intimacy of in-person interactions are the fastest way to learn what really motivated the prospect’s team to seek out and evaluate your company’s solution. It’s much easier to bring this type of info to the surface when all players are in a room together. Face2face meetings encourage the development of communication and trust whose depth will surpass a merely transactional agenda. Like marketing leaders, sales leaders want to add to their roster clients who are willing to bring repeat business and make referrals to your company. BTW, you can also make referrals for your clients, an action that is certain to strengthen your business relationships.
  3. Sales meetings are typically the setting in which you receive previously undisclosed info that reveals why your prospect is willing to resolve a certain pain point by seeking a solution (that you hope to provide). The prospect’s team might divulge false starts, frustrations and failures that were the outcomes of other solutions. You can move the discovery forward by developing a list of open-ended questions that may encourage decision team members to talk, so that you can actively listen and take notes. Obtaining a clear understanding of client motives, goals, past experiences and concerns will allow you to personalize a solution that addresses what matters to the prospect.
  4. Prospective clients in most cases are concerned with maximizing value for the spend. Therefore, you are advised to focus on the dependable benefits of your solution’s outcomes and results, rather than reciting a list of features that are associated with the service or product.
  5. It is often said that half of life is about showing up; the other half is about the right kind of follow-up. If you’re waiting anxiously for an answer that concerns the proceedings of a recent sales conversation, by all means reach out and make contact. Your job is to add value to the communication and not bring pressure. Good meeting notes will help you to diplomatically present information that addresses client needs and priorities and moves the sale toward a successful conclusion. Maybe you can send a case study that was not previously discussed, or there is an add-on or upgrade that is not costly in terms of time and/or money for you to provide, but will bring value to the client and make your solution more attractive?

Sales skills are critical for B2B sector Freelancers and SMB owners. Those who sell are the revenue engine, making periodic professional sales skills training a must-do. If you’re the company’s one-person sales team, you’ll be much more successful when you sharpen your ability to persuasively and clearly articulate your product or service value proposition/unique sales proposition, refine your responses to prospect questions and objections so that you instill confidence—and close deals in a way that builds client relationships. Keep in mind that utilizing sales best practices tactics alone will not ensure success in the hypercompetitive B2B sector. Producing sales revenue and profit that achieves your targets will also require that you stay abreast of the evolving expectations of your clients and prospects and updated on industry developments and trends.

  1. Instituting an efficient sales system is essential for B2B sector Freelancers and SMBs. A CRM (customer relationship management) system that helps you to monitor leads, sales offers being considered and prospective client interactions should be a part of your sales system. You should establish an inbound sales pipeline that helps you visualize your sales process and identify areas where you can improve. Refer to your marketing buyer persona and use that profile as a snapshot of the client(s) you’re selling to, so that you can tailor and personalize your sales process to fit their needs and expectations. 
  2. Freelance consultants and SMBs operating in the B2B sector must develop a sales strategy.  Your sales strategy will guide you to identify reasonable and attainable sales revenue goals and identify potentially useful sales distribution strategies. Might facilitating website online ordering of certain of your products or services be attractive to your clients and persuade them to do more business with you? Your sales strategy will also guide you to identify principle competitors and learn how to persuasively articulate your unique sales proposition.
  3. Make your sales pitch simple and easy for the client to envision how your solution can be incorporated into the workflow and operate in the real world. Provide information about how your solution can meet the prospect’s specific needs—that is, benefits and outcomes— rather than the ins and outs of service or product features.
  4. Recognize and introduce opportunities to up-sell to premium level service or cross-sell add-on services or accessories. If your service or product line does not currently feature options to “trade-up” or ‘add-on,” consider how you can include such options. For example, designing an “economy” level service may attract interested prospects who are on a budget but are motivated to become buyers. On the other hand, those who have more expansive needs and a budget to match may be ideal candidates for up-selling to premium service/product options, or add-ons.
  5. In 2025-2026, the payment options you offer to prospects can be presented as a competitive advantage. As fintech expands what’s possible, know that buyer expectations are shifting toward flexible, personalized payment terms. Furthermore, cybersecurity and other risk-mitigating considerations are at top of mind. Confirm that your current payment options meet buyer expectations of payment transaction security and give yourself another pathway to encouraging sales and developing good business relationships.

Thanks for reading,

Kim

Image: © Rido/Dreamstime

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A Strong Financial Foundation Is the Launchpad for Growth

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Here’s the scenario: business is good, and growing—sales revenue is up as compared to last year, clients are happy and their number is growing. So what’s the problem? For some reason, business is not making a profit. What’s wrong?

This puzzling and frustrating problem is more common than you think. It could be that expenses or debt payments are eating you alive, but there might be a less obvious problem—your financial management leaves something to be desired, so you’re unable to find and fix the money leaks. Let’s take a look at the usual suspects.

Do you invoice clients in a timely fashion, say, within 14 business days after completing a project? Are invoices paid within 30 days of receipt—or is 60 days the more likely payment timetable? Do you keep up with accounting/bookkeeping functions and complete the business financial statements—Income Statement, Cash-flow Statement and Balance Sheet—within 14 business days of the next month? Most of all, do you review the financial statements and analyze the info so that you are aware of the story your business financial data is telling you? Do you act on that information by making adjustments in how you operate—trimming expenses, adjusting prices, invoicing on time, for example? Beyond that, do you have a business budget and do you operate within it?

The moral of this story is that businesses do not always fail because of a product-market mismatch or an aggressive competitor who gobbles up market share. Sometimes a business can be a victim of its own success and grow faster than its financial foundation can support. The weak points are often either cash-flow deficiencies caused by late client payments, which may be a result of slow invoicing, unwieldy debt and expense payments, poor pricing strategy, or inadequate working capital. Fear not, my friend—with a bit of disciple, you can control most of these issues.

Money is the lifeblood of the business and along with sales revenue, you want to focus on building up enough working capital: that is, the amount of money that remains after business liabilities are subtracted from business assets (see your Balance Sheet). Working capital is liquid, meaning it’s available to float you now. You also want to promote good cash-flow, so that you can stay on top of accounts payable and, if applicable, payroll (whether for 1099NEC or W2 employees)—ideally, without dipping into the working capital fund. Your intentions to grow, expand and/or make capital improvements or upgrades to your business depend on the amount of available working capital, which is supported by revenue and cash-flow. If necessary, working capital can be used to pay operating costs while you’re waiting for the accounts receivable to be paid. That said, keep in mind that business growth plans cannot be viable unless adequate working capital is available to put things in motion. In other words, getting your financial house in order, step by step, is integral to facilitating the business growth that you envision. To that end, below are financial management practices that you may find effective.

Accounting–Staying on top of accounting/bookkeeping functions will keep you fully apprised of your company’s financial condition. You know that it’s not possible to effectively plan or manage the company without accurate financial records that provide information that you can review, analyze and use as decision-making guideposts. If your monthly revenue exceeds $2000, you might have the wherewithal to hire a bookkeeper or business accountant to prepare the monthly financial statements and the quarterly and annual tax filings. Personal referral is probably the best talent search method, but social media or NextDoor can also be helpful sources. However, don’t be afraid to do your own bookkeeping! Taking on the financial management of your company, even if only for a year or two, will give you numerous valuable insights that you would otherwise never obtain. You might investigate Quicken Simplifi to start the process.

  • Ensure that all transactions are recorded—every business lunch, every office equipment expense, each fee paid to attend a business networking meeting or professional development session, all client invoices. Document every spend, every month.
  • Ensure that transactions are correctly categorized.
  • Can every payment you receive be cross-referenced to an entry in the books?
  • Are monthly Profit & Loss and Cash-flow Statements and the Balance Sheet completed and closed out within 14 business days of the next month?

Accounts Receivable–A joint study conducted by SCORE, the Small Business Association mentoring program and the financial services company U.S. Bank revealed that as many as 82 percent of startups and small businesses fail due to poor cash-flow management. Sending an invoice is a wonderful feeling, but you hold your breath until payment is received. You need to get paid within 30 days in order to control and predict cash-flow. Business plans cannot be made until you can confirm the amount of available funds. Help yourself by invoicing in a timely fashion and also by discussing the invoicing schedule with every client and following it.

  • Is anticipated revenue (i.e., accounts receivable) linked to agreed-upon project milestone payments or, if you sell a product or service via subscription, are subscription renewals linked to accounts receivable? Are invoices promptly, perhaps automatically, sent according to contracted agreements?
  • Is the status of receivables updated once they are collected? Is there timely follow-up on unpaid invoices (e.g., reminders are sent on day 45)? Automated reminders will be a helpful method to implement a formal accounts receivable follow-up process.
  • If you have the type of business where extending credit to customers is the norm, have you developed a standard set of credit terms and customer credit limits?

Forecasting and budgeting–Planning, budgeting and forecasting are central to financing the company’s operations and short- and long-term goals. When forecasting and budgeting, you will be greatly assisted by software such as QuickBooks, Quicken, or other financial software solutions.

Forecasting is the process of making informed predictions about future business outcomes. The process can involve projections for specific business metrics, such as sales growth, or for industry changes, or recommending how you will be best positioned to navigate the economic landscape in which your company operates. Forecasting uses your company’s historical data and analyzes current market conditions to make predictions as to how much revenue your organization can expect to earn over the next few months or years. Companies use forecasting to support the development of business strategies. Historical company data is analyzed so that patterns can be recognized and used to predict future outcomes. While forecasting consists of estimates of future conditions and possible outcomes, the process can encourage you to consider a range of potential scenarios and in that way position the company to capitalize on potential outcomes that appear most likely to occur or prepare the company to adapt to potentially challenging conditions if they arise. Forecasts are usually updated as new information becomes available, to promote accuracy and relevance.

Budgeting details how the financial plan will be carried out each month and addresses items such as revenue, expenses, debts and anticipated cash-flow. A budget is a forecast of revenue and expenses over a specified future period, typically one year, and details how the financial plan will be implemented each month. The budgeting process can be challenging, particularly if clients don’t pay on time and undermine cash-flow, or if sales revenue is intermittent or your sales cycle is long. It is acceptable to adjust your budget to reflect the actual amount of revenue received or compare actual financial statements to determine how close they are to meeting or exceeding the budgeted revenue and expenses. Once the budget period has ended, it is essential that you compare the forecasts to the actual numbers. It is at this stage that you’ll discover whether the budget aligned with the expected expenses and revenue.

  • Operating Budget: The operating budget includes the expenses and revenue generated from the day-to-day business operations of the company. The operating budget also represents the overhead and administrative costs directly tied to producing the company products and services.
  • Cash-flow budget: A cash-flow budget helps determine the amount of cash generated by the company during a specific period. The company’s inflow and outflow of cash is critical because timely payment of expenses is dependent on cash that is both generated and available. Monitoring and encouraging the collection of accounts receivables helps you forecast the income that is due in a particular period.
  • Strategic Forecast: A spark of inspiration may strike like lightening and you might be amazed by your own creativity. If you’re serious about bringing your brilliant idea into reality, you’ll test its potential viability with strategic forecasting; the goals you pursue be both realistic and most likely attainable. Strategic forecasting is integral to making that determination. In Step I, you’ll determine whether your goal should be a primary or secondary target and whether it is short-term (e.g., one year) or long-term (e.g., three years) initiative and address the question of what the business aspires to achieve by pursuing this goal. Next, you’ll define the market conditions that the company operates in, to further evaluate the capabilities and resources needed to take on the goal. In Step 2, you may find it helpful to categorize the strategies you’ll use to pursue your goal into functional strategies and operational strategies. Functional strategies refer to the action plans and tactics you’ll use to implement the strategies; operational strategies focus on resource allocation used to achieve the goal. If your goal passes muster in Step 3, you can then develop your strategy roadmap. A successful strategy will anticipate challenges that are endemic in today’s fast-moving economic environment and will integrate risk management and an agile approach that bakes in the ability to adjust your strategies as new trends, opportunities and—to be realistic—obstacles appear.

Pricing–how you price your products or services is based on factors such as market demand, customer behavior, competitors and market position. Identifying a pricing strategy capable of driving revenue and maximizing profit without alienating customers is critical; identifying the pricing sweet spot your service or product can be challenging. Begin your pricing strategy by determining your pricing objectives, e.g., maximizing profit, increasing market share, or stimulating client acquisition. 

Remember that pricing influences your ability to pursue, and achieve, business goals because it determines the sales revenue and is, in most cases the primary, if not sole, contributor to working capital and profit—the engine that keeps your entity solvent and sustainable. When evaluating potential business goals, examine and, when necessary, adjust your pricing to enable the company to generate sales revenue that’s capable of providing the financial foundation that will facilitate your ability to achieve the growth, scale or expansion goals that you envision.

Give yourself reliable data and insights that enable informed pricing decisions, rather than relying on intuition or outdated market info when determining prices. Avoid methods inclined to produce ineffective pricing strategies that are unlikely to access the full revenue generation possibilities of your services and products.

Finally, be aware that clients may be willing to pay a premium for services or products that possess what they feel is a desirable differentiating characteristic. A unique characteristic may be perceived as a competitive advantage that sets your service or product apart from what is offered by other vendors—sustainability, for instance. Furthermore, clients are not infrequently willing to pay a premium to do business with a brand they consider trustworthy or prestigious. Below are pricing strategies and factors to keep in mind.

  • Cost-plus pricing is based on the cost and value of the time and effort (talent) required to develop your B2B solutions, or source/manufacture B2B or B2C products. From there, a profit margin that target clients will presumably accept is added, to create the selling price.
  • Value-based pricing is particularly attractive in that it reflects the maximum amount clients are willing to pay, and minimizes the focus on service or product production or acquisition coat, which might be difficult to calculate when developing B2B solutions.
  • Tiered pricing targets different customer segments and may produce additional revenue from those willing to pay a premium for upgrades and add-on features, or offer volume discounts to attract clients who have higher consumption rates.

Thanks for reading,

Kim

Image: Quentin Metsys (Flemish, 1465/1466-1530) The Money Changer and his Wife (1514) courtesy of the Louvre Museum in Paris, France.

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What Can You Do to Cultivate Customer Loyalty?

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Recruiting a new customer is a victory, the goal of every business owner and Freelance professional—but you can’t exhale yet. When it comes to making money it’s not only what you make, it’s what you keep, and that folk wisdom applies not only to sales revenue, but also to customers. The real genius of being in business is learning how to retain customers.

Building a thriving community of customers is foundational to sustaining a business entity; strategies dedicated to nurturing customer loyalty by persuading them to continually do business with you is an important part of a comprehensive marketing plan. Loyal customers are repeat customers; they also refer new customers and that makes it imperative to develop strategies that generate and encourage customer loyalty. Neglecting this function can easily result in customers you worked so hard to attract eventually moving on, perhaps to do business with a competitor.

Unfortunately, many businesses struggle to retain customers, a consequence that can diminish sales revenue and weaken the ability to survive. It has long been known that implementing strategies designed to retain customers is fundamental; customer acquisition cost has increased by nearly 50% since 2013, making it so much more expensive to acquire a new customer, as compared to the cost associated with retaining an existing one, further proving the value of repeat customers and promoting the loyalty that stimulates repeat business.

Customer loyalty is the happy result of the relationship between satisfied customers and the businesses they know and trust. Building a loyal customer base for your entity brings benefits in at least two ways—it discourages customer churn and therefore limits the marketing dollars you’d need to spend trying to retain them and second, loyalty helps you grow and preserve your current group of customers. Not only that, promoting loyalty can also convince customers to become cheerleading advocates for your brand.

In other words, encouraging customer loyalty can do wonders for your business, like enhancing sales revenue, strengthening customer relationships and brand building. You just need to work at it consistently! Below is a list of customer loyalty strategies, one or more that’s sure to be useful for you.

Exceed expectations

Customer expectations are feelings, actions and outcomes that customers anticipate will result from their experience with your brand, from first impressions to final purchase and on to using the service or product that was purchased. You’ve probably heard the oft-repeated advice that urges businesses should “under promise and over deliver”—you do that by exceeding customer expectations. So, if you promise a customer that you’ll follow-up to answer a question or resolve a problem within 24 hours and you contact the customer within six hours, you’ve exceeded customer expectations and planted the seeds of loyalty. Common customer expectations include:

  • Quality product. Product quality is at the top of most customer checklists. They want a product that meets their needs and delivers on the promises of its description, photos and reviews. 
  • Great customer service. Customers expect businesses to provide friendly and knowledgeable customer service before, during and after they make their purchases.
  • Value for price. Value is represented by the satisfaction customers feel when the price of the product or service seems appropriate (or like a good deal). Perceived value for money spent is subjective, but customers want a price they believe is justified.
  • Personalized interactions. Customers want to feel like the company values them by providing an efficient, pleasant and personalized buyer’s experience.  

Exceptional customer experience

Promoting customer loyalty involves more than offering products and services that satisfy the needs, goals, or problems of customers. To truly win over a customer and create loyalty, you must persuade them to become your cheerleaders. An exceptional customer experience is the true foundation of customer loyalty. Superior service is integral to encouraging customer loyalty and promoting positive word-of-mouth that differentiates you from competitors.

Customers who are pleased with the experience your brand provides, and also trust the reliability and quality of your products and services, are positioned to become loyal customers. They’ll usually be happy to share their favorable experiences with friends, family and colleagues and give your brand enthusiastic endorsements that commonly result in referrals of new customers and repeat business. These demonstrations of customer loyalty are a powerful, and inexpensive, way to reach new customers and build your customer base, sales revenue and brand.

  • Surprise and delight. To create a positive, memorable experience for your customers, remember that it’s the small and unexpected things that keep them coming back.

Expertise

Because your goal is to attract and retain customers, generate referrals and recruit brand cheerleaders, know that you’ll promote those aims by demonstrating that you are a reputable and trustworthy expert in your field. You’ll build credibility and customer loyalty by sharing your professional know-how with customers and prospects.

  • Educate customers. Content marketing is all about educating customers and it is now the marketing strategy that most customers prefer. The purpose of marketing is to persuade prospects to do business with you. For example, if you are a Freelance gardening and landscape specialist, you would do well to create videos, and/or publish a monthly newsletter or blog that focuses on helping plants survive winter and how to prepare a garden for spring plantings. Throughout the seasons, new posts will address how your readers can create a beautiful garden. Distribute your customer/ follower education info to your email list and encourage list members to subscribe to regularly receive the info.

Reliable

Conscientiously build a reputation for being consistent and dependable to further support customer loyalty for your brand. For example, if you promise that a product will be delivered within 48 hours after purchase, take steps to ensure delivery occurs within that time frame. Or if the graphics for the marketing campaign brochure you’re creating for a client must be ready for a 10:00 AM meeting that your client has scheduled with his client, be prepared to work as long as it takes to produce a perfectly designed and edited deliverable at the agreed-upon time and place, to make both your client and yourself look good.

Flexible

While it’s important to have policy and procedure guidelines in place, it is smart to remember that customers have circumstances and problems they grapple with. So, if you’ve established a 14-day return policy, but a customer wasn’t able to return the product within that window, perhaps because of a business or family emergency, graciously accepting the return and offering either the usual refund or store credit may be the best course of action. It’s likely that you’ll gain much more than you’ll lose and it will be an effective way to encourage customer loyalty.

Communicate

One of the easiest ways to keep in touch with customers is through email. Ask for customer email contact info after completing purchases, or while they explore your sales/marketing funnel during the buyer’s journey, so you can send information that a prospect would like to see, or keep existing customers updated on new products, or perhaps follow-up with them after a sale to inquire about their perception of their customer experience. This information can be used to improve customer satisfaction.

Studies have proven that personalized emails have a transaction rate 6 times higher than impersonal emails. Addressing recipients of your marketing emails by name, sending birthday or holiday greetings to existing customers, or thanking a customer for a recent purchase are the types of outreach that customers appreciate. Personalized messages can help create an emotional bond between your brand and your customers that promotes customer loyalty.

Social media platforms will help to bring your customers into a community. Communities are an effective way to start conversations with your customers and also encourage user-generated content. You might start by inviting customers to share pictures of themselves using your product for posting on Facebook, Instagram, or Pinterest, for example.

Feedback

Whenever a customer makes a purchase, request their feedback with an email questionnaire or online survey link sent to their email (you can also place that link on your company website). It’s important that you know what customers like or dislike about your products and/or services and how they feel about your customer service and experience. If you aren’t aware of this information, you will be unable to make changes that will make your customers happy. Always be ready to listen to customers and address their concerns a timely manner. Make it easy for them to get in touch with your company by clearly displaying the email address, phone number and social media links on your website and in emails.

  • Make it easy to communicate with a real person. While technology has made it easy for customers to find information regarding your product or service, it’s a mistake for business owners to hide behind a wall of tech. There’s going to be an event that causes a customer to feel the need to speak with a real-life person. Make sure that your contact information is easily located on your website and in your emails and follow-up on inquiries in a timely fashion.
  • Spend time with customers. Speaking with customers is good business—they’ll immediately recognize that you care about them as individuals and want to provide a pleasing customer experience for them. It’s Relationship Building 101. Furthermore, you can learn a few things, such as what motivates them become, and remain, your customers. What you learn in conversations with customers is invaluable—the intel can be used to generate more specifically useful content and support the development of more effective marketing campaigns. Moreover, you might even be able to recruit customers who are especially happy with your brand to share their experiences in testimonials or case studies.

Transparency and integrity

There will be days when things fall apart. Rather than retreating into excuses and denial, put your big boy/big girl pants on and be honest with customers about the bad news. Mistakes happen; customers know this and when you face up to the problem, customers will respect and appreciate your honesty. Don’t get defensive or over-sensitive if you get called out on something that was your fault. Instead, use emails and social platforms to take responsibility and resolve the issue.

Train employees

Employees are part of your team and they are capable of generating customer loyalty—or destroying it. Employees who buy into your brand promise and culture are more likely to themselves feel loyal toward your company and inclined to share their enthusiasm with friends, family and the customers they assist. Make sure your employees have the proper training and tools to enhance the customer experience and keep them updated about company developments that will support their work. Always treat employees with respect and listen to insights and suggestions they have to streamline procedures, sharpen your marketing campaigns and pay special attention to any rumblings of customer discontent.

Incentives

You want to give customers reasons to keep coming back and that’s when incentives can be helpful. Your give-away could be as simple as a 10% discount on their next purchase that is at least $50 or giving them a free (relatively inexpensive) branded item after their tenth purchase. Instituting a loyalty program might include the following.

  • Points System – Customers earn points which can be used for a reward.
  • Tier system – Provide a small reward and increase the reward over time.
  • Support programs around your customer’s values – Customers aren’t just concerned with monetary rewards, show your support for programs that they support.
  • Coalition programs – Team up with a related company for deals outside of your company

Happy New Year!

Kim

Image: © The Next Crossing. Marrakesh, Morocco 2017

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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

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Thoughts on B2B Pricing

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The prices assigned to a company’s products and services are an important element of the company’s marketing strategy. Pricing strategy plays a key role in determining a company’s revenue and overall financial picture and cannot be treated as an afterthought. Those of you operating in the B2B sector especially will note the codependent relationship between product and service pricing and the ability to attract and retain customers. B2B purchases are complex, involving multiple stakeholders, an extended sales cycle and high-value contracts. According to Marketing Chart, 63% of B2B buying committees consist of at least three decision-makers.

Identifying the optimal price range is critical business intel. If prices are too low, it becomes difficult to attain the sales revenue goal; there will be extra work and worry caused by the need to fill the sales pipeline with evermore prospects and hope to convert enough of them into paying customers. Price at a level that prospects find excessive may alienate them and possibly drive them instead to do business with a lower priced competitor. So your mission here is to find a sweet spot price range that prospects will tolerate and become your loyal paying customers.

Evaluate your industry and competition

As you contemplate pricing you will benefit by first identifying benchmarks by investigating pricing norms, in particular, standard mark-ups and the typical profit margin range in your industry. Next, check out the prices of a few competitors. Evaluating these numbers will also reveal whether or not your product and/or service production or acquisition costs are reasonable relative to the typical selling price range found in your industry and used by competitors.

Be advised that while knowledge of competitive pricing will help you determine an acceptable price range for your products and services, it would be ill-advised to merely apply a competitors’ prices for similar items to your line. Let factors that are unique to your situation guide your finalized pricing strategy.

Determine your pricing potential

It’s critical to identify a price range for your products and/or services that aligns with your brand and market position and is also accepted by your target customers. Knowing where on the value spectrum customers classify your products and services is essential information for every business and that knowledge is particularly important for pricing. You’ll confirm pricing potential when you understand customer perceptions of your company value and brand position. You may decide against pricing at either the upper or lower extremes of customer price tolerance but by considering key factors, including acquisition or production costs, competitive pricing intel and knowing the price tolerance of target customers, you can determine which end of the pricing spectrum will be most advantageous for your line.

Remember also that Freelancers and business owners in nearly every industry continue to grapple with the unfortunate effects of depressed wages, which for many have not kept pace with inflated prices that were declared “over” in 2022 but that we can’t seem to outrun. Customers remain cautious with their spending and most companies realize that pricing competitively to attract and retain customers is a must. Here are some common B2B pricing strategies that may help you find your sweet spot.

Cost-plus pricing

This strategy employs an uncomplicated mark-up formula. The business owner calculates the acquisition or production costs of the product or service, adds a certain sum for overhead expenses such as rent, payroll and utilities and arrives, tacks on the desired profit margin and arrives at a price that will cover all costs and deliver the margin. Also called mark-up pricing, this strategy focuses on internal factors like production or acquisition costs rather than external factors like brand reputation and competitive prices. 

Premium pricing

A premium pricing strategy aims for the maximum amount a customer is willing to pay for a product or service, rather than focusing on production/acquisition costs, competitive pricing, or other factors. Selling your product or service at a premium can mean deliberately pricing higher than competitors, as a way of demonstrating to your target market that your product or service is of a higher quality and more desirable than what’s sold by competitors and is therefore worth the additional cost. If marketing and branding activities convey high-end status and particularly when customers and influencers provide good word of mouth, a premium pricing strategy will be a brand-building asset and fulfill customer expectations.

Loss leader pricing

AKA penetration pricing, this strategy is enacted when a business assigns an irresistibly low price to a high-volume product or service with the intent of enticing customers to abandon competitors who sell a similar product or service at a noticeably higher price. The hope is that customers drawn to the loss leader will be motivated by the availability of other desirable items, and already happy with their bargain-priced item, will purchase those products or services that bring in a higher profit margin and make up for the low, or nonexistent, profit margin of the loss leader. Some B2B companies use a “freemium” version of loss leader pricing and allow new users to access a limited version of a product or service at no cost in the hope they’ll convert to paying customers. The strategy can also be effective for lead generation.

Trader Joe’s customers will be familiar with the chain’s quite successful use of loss leader pricing. For 20+ years, bananas at Trader Joe’s were priced at 19 cents each (increased in March 2024 to 23 cents each, as a result of rising transportation and farming expenses). The price of an organic banana was returned to 29 cents each, after being priced at 25 cents each for a few years. Trader Joe’s Markets is a privately held company and does not publicly report income, but it is believed that annual earnings are about 13 billion annually—so loss leader pricing appears to work for them.

Competitive pricing

Monitoring competitive pricing is time-honored business strategy. When the pricing strategy is influenced by a close competitor, prices are set relative to rivals and follow the going market rate for similar products and services. Prices may be set slightly lower or higher depending on factors such as product quality, target market and the marketing strategy. Proprietors of relatively new B2B companies often benefit from using this strategy because existing brands have already determined what customers will pay for similar products and services.

Tiered pricing

Most businesses serve a wide range of customers who have different business needs and operate under different financial conditions. Tiered pricing addresses the diversity of customers by offering price points for products and services that reflect the addition of features included at each level. Lowest cost versions include only basic features and highest price versions offer the most, and most desirable, features. Tiered pricing can increase revenue by enabling the business to sell to a wider range of customers.

Tiered pricing can also support the pricing strategy known as price anchoring. By offering three or more pricing tiers, the business can position its premium option as a psychological reference point as the best value for the money and use this story to encourage customers to accept up-sells.

Subscription pricing

With a product or service that requires repeated sales, e.g., access to software as a service (SaaS) or attending a monthly networking meeting, Freelancers and other business owners will turn to the subscription pricing model. Subscription pricing is usually a win-win for both customer and business owner because monthly costs are locked in with (typically) an annual contract. Both parties know the amount of money that will be paid or received each month or quarter. Subscription pricing delivers the advantage of expense (the customer) and revenue (the business) predictability that will encompass a predetermined length of time that also supports business planning for both the customer and the Freelancer or business owner.

Thanks for reading,

Kim

Image: ©TK Kurikawa for Shutterstock 1457812421