Selling to Small Businesses

While billion dollar revenue enterprise companies, along with disruptive technology focused start-ups and their Millennial Generation hoodie-wearing founders receive overwhelming attention in the business press, let’s remember that America is a nation of primarily small and medium-sized business ventures.

As documented in a 2018 report published by the U.S. Small Business Administration, there are 27.9 million privately run businesses in the U.S. and 23 million are owned and operated by Solopreneurs.  SMBs employ 47.9 % of the private workforce (non-governmental, for-profit organizations), 58.9 million people. Twenty million SMBs have fewer than 20 employees; the median income of self-employed owners of incorporated businesses in 2016 was $50,347 and the median income of self-employed owners of sole proprietorships was $23,060.

The majority of SMBs have limited budgets for what some owners perceive as non-essential services—marketing, advertising, or IT, for example. Yet, SMB owners will from time to time of necessity feel the need to purchase such services. Timing most likely plays a big factor in your ability to make a sale but should the opportunity land in your lap, you must handle it skillfully. Selling to the SMB owner is a delicate business.  Here are a few things to keep in mind:

Demonstrate excellent value

Nevertheless, there is money to be made in the SMB market. The social media marketing company HubSpot and Google have made untold millions in profits by targeting SMBs. In your sales pitch, detail the story of a client who shared a similar goal or faced a similar challenge, so that the SMB owner can get a clear picture of how your product or service can help him/her achieve goals.

If you can provide a link to a case study that’s on your website or social media, so much the better. SMB owners are usually worried about how they can cover expenses and simultaneously make their desired profit and they are cautious about spending money.  Show your SMB prospect that your product or service will solve the problem or see to it that the goal is achieved.

Describe how your product or service can help grow the business

Profit, growth and financial stability are the big goals of SMB owners. If you want the sale, identify preferably tangible benefits that will enhance one or more of those metrics. New customer acquisition and customer retention are also important benefits to emphasize.

Deliver results in the near term

Whatever your product or service, the faster that some portion of the ROI can be documented, the better. Too many SMB owners are concerned about cash-flow and they need to see that their investment in your product or service delivers the expected results ASAP.  When considering whether to pursue the SMB market, evaluate whether your product or service can deliver benefits quickly, at least in part.

Follow up and follow through

When selling to the SMB owner, you would be wise to under-promise and over-deliver. Your enthusiastic sales presentation must carry forward into enthusiastic customer service as well. If there is difficulty with the implementation of the product or service you sold them, meaning that the ROI cannot materialize within the expected time frame, your SMB client may very well discontinue the service and cancel future orders if you do not quickly rectify the problem.

But if you are knowledgeable, transparent and dependable, you will be positioned to  receive repeat business from your client and referrals to colleagues in his/her network.  SMB owners are often part of a community of trusted fellow business owners and most will be happy to spread the word about your good work.

Thanks for reading,

Kim

 

Photograph: The Arthur Anderson Barber Shop in Mattoon, IL circa 1920. Mr. Anderson is standing at right, and employee Sidney Williams stands at left.                                 Courtesy of Eastern Illinois University

Advertisements

What’s Your Problem?

Whether your customers are B2B, B2C, or B2G, no matter if you sell products or services, tangible or intangible, you will, through trial and error, lost sales and big paydays, develop good stories that convince customers and make sales. Over the years you will trot these warhorses out again and again because they take you to the bank.

Your selling stories can take any number of approaches depending on what and to whom you sell, but one tried-and-true selling story category is the Problem Story. In a Problem Story you demonstrate that you can relate to the prospect’s pain points, you understand what is driving the prospect’s situation and you’re prepared to work with him/her to come up with an effective and reasonably priced solution (that just so happens to reside in your product or service line).

The best Problem Stories have a basic format that you can then adapt and apply to any prospect. Learn to personalize your Problem Story with a visit to your prospect’s website, an internet search to read what’s appeared in the press and if you met the prospect at a business association meeting or similar event, a call to the membership chairperson to get additional info about the prospect and his/her business. Get the back story and begin to comprehend the big picture of your prospect’s goals and understand what really matters. Now you can put together and customize a winning Problem Story.

For example, I provide event planning and PR services for a couple of large annual art events that are sponsored by an artist’s organization. The project specs describe the event planning responsibilities and event promotion public relations campaign that I’m hired to manage, but the unspoken purpose of my job is to persuade art lovers, art dealers, museum curators and the curious public to attend the event and buy art. My service enables the meeting of the relevant parties, so that business can be done.

When I write for the women entrepreneurs magazine where I am a staff writer, my unspoken purpose is to provide compelling content that persuades readers to click on my articles. Those clicks are tallied and they measure both my value to the magazine and the magazine’s value to advertisers, whose budgets sustain the publication.

Problem Stories communicate your understanding of what the prospect is facing and why s/he needs your help. Problem Stories communicate your authenticity because they entail sharing and not just telling. You “get it” and you care. A Problem Story is the opposite of a canned, impersonal sales pitch.

BTW, problem Stories can have a life beyond your conversations with prospects. With client permission if you’d like to reveal names, your Problem Stories make excellent case studies that you can upload to your website, Facebook page and LinkedIn profile, or share with the listening audience when you are a pod cast guest. Make use of your Problem Story wherever and whenever you’d like to demonstrate expertise, build trust and grow your customer base.

Thanks for reading,
Kim

Photograph: Academy-Award winning actor (“Network,” Best Actor 1977) Peter Finch (1916 – 1977) as Howard Beale in “Network” (1976). Directed by Sidney Lumet.

Speeding Up Your Sales Pipeline

How wonderful would it be if your prospective clients would just hurry up and make a decision about if and when they’ll give you a sale? Even if 80% decline, as predicted in Pareto’s 80/20 rule, think of the time and aggravation that you’d be spared.  There’d be no more chasing so-called prospects who either can’t or won’t green-light a sale for you.  Your numbers would probably increase, if for no other reason than you’d stop wasting time on lost causes and look for better possibilities.

Getting a commitment to either fish or cut bait in maybe a week or two is a fantasy, but learning how to get better at qualifying prospects is within reach and here are four tips to help you do just that.  Implement these tactics and you’ll move prospects through your sales pipeline faster than ever before.

1. Sell to the decision-maker

Is the person who you think is the prospect really the prospect? Does this person have the authority to make the decision and approve the budget? If not, there will be no sale until and unless you get in front of the real decision-maker.

Especially in B2B sales, a gatekeeper or other lower-level employee could be enlisted to find out the details and then report back to the actual decision-maker.  Alternatively, the decision could be made by a committee of senior staff members, one of whom may be speaking with you, but s/he alone cannot give the green-light without getting agreement from other committee members.

In either case, you’ll need to get around the stand-in, learn the identity of who has the most influence and focus your attention on addressing that person’s hot buttons, so that the sale can move forward at a faster pace.

Step One in ferreting out the identity of the real decision-maker is noticing the job title of the person with whom you’re speaking.  If s/he ranks lower than Director or Vice President, most likely there’s someone in the background pulling the strings.  Unless you’re selling office supplies, ask the stand-in if s/he is able to directly approve the budget and if there are others who might like to directly ask you questions about your product, service, or project.  Be respectful of feelings, but do encourage the participation in the sales process of the one who can sign the check.

2. Discover what worries your prospect

Get a big-picture understanding of your prospect’s most urgent and top-of-mind challenges and near-term objectives, as they apply to what you can bring to the table in terms of a product or service.  What does your prospect think will happen if the product doesn’t get purchased or the project doesn’t get done?  How will company leaders feel when the problem is resolved and objectives are achieved?

Learn as much as possible about what your prospect wants and how committed s/he is to achieving goals and resolving issues.  Ask “what” and “how” questions to discover these key insights.

3. Confirm that your solution is a fit 

Ultimately, all salespeople want to close deals. But ironically, it’s sometimes better to walk away from a potential sale if the product or service isn’t a good fit for either you or the prospect.  Pushing for a sale that won’t bring about the best outcomes never ends well and it should be avoided, even when you’re desperate to do business.

In these situations, your objective is about getting to “no” faster.  Then you can move on and pursue other prospects who may be better positioned to buy from you.  It’s  preferable to speed inappropriate prospects through the pipeline and devote the time saved to identifying and meeting with qualified prospects who might say “yes.”

To ensure that your product or service can solve the problem or help the prospect meet a goal, ask pointed questions and listen well to determine whether your solution will produce the best results and be cost-effective in the long run.

4. Learn the prospect’s timetable

Is there an urgent need or deadline that compels your prospect to take action and implement a solution quickly? If you know that to be true, you can most likely expedite the sale (and get the price you want, as well).  Ask questions to help yourself evaluate whether the prospect could be ready to do the deal in a week or two, or in months.

One important line of questioning should concern available funding for the proposed sale or project.  In some cases, the prospect would sincerely like to move forward, but there is insufficient political support in the organization for his/her agenda.

The information will allow you to adjust your expectations for the sale and decide if you should continue to pursue, pick up the thread in a few months, or close the book on a pipe dream.

Thanks for reading,

Kim

Image: Portrait of Evdokiya Nickolayevna Chesmenskaya (1780) by Jean-Louis Voille (1744 – 1806) courtesy of the State Tretyakov Gallery, Moscow

The Art of the Sale: How Marketing, Branding and Advertising Help Revenues

Today, I respectfully offer you a tutorial. Our inquiry will focus on the essence of doing business: selling. The purpose of starting a business is to generate sales, produce revenues and earn a profit.  If a business cannot generate a certain threshold of sales, business expenses cannot be paid and the owner’s investment will be negatively impacted. To curtail mounting debts, the business must close.

Over the past 10 years or so I’ve noticed, sometimes with amusement and other times with dismay,  that the word selling seems to make people feel uncomfortable.  I noticed that frequently, aspiring business owners and Freelance solopreneurs, who must find customers and earn money that is derived from the exchange of money for the products or services that their ventures would produce and provide, avoided the word sell. Instead, the word market was substituted.

Many self-employed professionals are uncomfortable with the process of selling, so they’ve decided to banish the very word. It’s as if selling is now perceived as crass or pushy. That is a shame.  The sales profession is one of the oldest on earth and honorable. Selling is one of the foundations of civilization and selling skills are among the most useful anyone can have; it is the ultimate transferable skill.  Selling makes the world go round, because we wouldn’t have much of a world without it. The ability to sell is far more valuable than the ability to code (yes, really!).

So we can agree that the success of a business is dependent upon sales?  Now, let’s go back to the process of marketing.  The American Marketing Association defines marketing as:

The activities and processes for creating, communicating and delivering information about products and services that have value for customers. Marketing is a set of processes that are interconnected and interdependent with other business functions aimed at achieving the interest of (prospective) customers.

Marketing consists of using information, in words or pictures, to promote products and services and persuade potential customers to make purchases.  Customers have an array of motives that drive their purchases.  Marketing campaigns are designed to appeal to the motives of selected customer groups (e.g., parents, young professionals, adolescent males) that research has shown are potential customers for the product or service in question.  The purpose of marketing is to communicate with and appeal to targeted customer groups and persuade them that (your) products and services will satisfy one or more of their needs or desires.

So we can agree that generating sales is dependent upon marketing campaign promotion that is directed at the most promising customers for your products and services? I hope we can also agree that marketing and sales, while on the same continuum, are not one and the same.  Let’s move forward on the path and consider branding.

Branding campaigns are designed to enhance and expand marketing messages by differentiating and distinguishing the reputation of products and services available in the marketplace.  Products, services and individuals can, through an effective branding campaign, acquire a powerful reputation, recognition and loyalty among customers, fans and the general public.  That reputation is known as the brand.

A company logo is usually associated with products that have acquired sufficient popularity and sales to be considered a brand. That logo is instantly recognized and conveys the essence of the brand to its loyal fans, as well as those who may not use the product.  The product name itself will come to symbolize a powerful brand, as does Coca-Cola.

Now let’s take your marketing and branding messages to the public and that brings us to the next stop along the marketing continuum, advertising.  There are more ways to advertise than ever before, thanks to the digital age,  but do not underestimate the value of traditional methods.  The century-old medium that is radio remains a highly effective advertising tool, as do billboards.  Taxi cabs and city buses (and bus stops) announce local events, such as the circus coming to town.  Newspapers and magazines continue to be packed with eye-catching ads.

Content marketing, which many call the new advertising, continues to grow in influence.  It’s approach is indirect and it is presented as relevant information.  Content marketing is stealth advertising that uses primarily written information conveyed in blogs and newsletters to provide information about topics that would be of interest to prospective users of the products or services sold by the company.  The purpose of content marketing is to build an audience of regular readers who trust the source (you) and would feel confident enough to do business with you.

Then there are the social media platforms that are now in the mix. Regardless of the name social media marketing, when used for business purposes it is advertising: the Instagram photos of your wedding venue, the video clip of you accepting an award at the Rotary Club, the webinar posted to your website and LinkedIn profile.

If your marketing strategy and campaigns have been effective and enabled the development of a trustworthy brand and memorable advertising campaigns, your business will attract paying customers. Your business venture will generate sales and you can declare yourself a winner.  Let’s sum up our tutorial:

MARKETING:  How you envision and describe your company. The verbal, voice and visual messages used to promote your products or services. The business owner identifies the market positioning strategy for the company, based on populations predicted to  become customers: mid-market, luxury, or bargain, hipsters, seniors, adventure travelers.  Product positioning impacts all marketing campaigns and messages, the branding strategy and advertising choices.

BRAND:  The company reputation, what it is known for. How others perceive your company.

ADVERTISING:  How and where you portray and describe your company to the public: in print or digital, visual or audio formats placed in Popular Mechanics, Harper’s Bazaar, subway stations, flyers tucked onto car windshields, or Twitter.  Advertising usually costs money.

SALE:  The ultimate goal and final step of the marketing process.  The exchange of money (or another valuable item or service) for the purchase of a product or service.

Thanks for reading,

Kim

Photograph of Cher by Richard Avedon (1986)                                                                 Courtesy of the Ogden Museum of Southern Art in New Orleans, LA

Save the Sale You Might Lose

 

  1. No urgency to get the deal done

SYMPTOM:  The prospect will not engage in a serious discussion about buying your product or moving forward with the alleged project you hope to work on. Probing questions about the product, or about the solutions your service would provide, are deflected.

TACTIC:  Look for a way to take an advisory role.  Surely you’ve been given some information about the client’s reason for speaking with you? Build on it.

If the prospect has no questions, then you propose them.  Start by asking if the project/ need, or something similar, was previously addressed in-house or by another vendor?  Find out what was done in that instance and the outcome—could that solution be implemented in this circumstance ? Are there certain refinements and customization of product specifications or services that the prospect  would find potentially useful this time around? Point out how you can fulfill those expectations.

Your goal is to spark some interest and get the prospect’s wheels turning to envision how you can deliver what is needed and concluding that you should be awarded the sale.

2.   No firm project deadline

Early in conversation with a prospect, it is advisable to inquire about the timeline.  It’s often safe to assume that conversation is taking place because the need is immediately urgent, but that is not always the case.

SYMPTOM: Sometimes, clients will contact a Freelancer merely to learn what types of services are available from an outside expert and how much these services cost.  Next year’s budget may be on the drawing board and the client is in no rush to fund a sale at this time.

TACTIC: Find out as much about the project specs as possible and offer the client a discount that is good for 8 – 12 weeks.  Give a 25% discount (or make it appear that you have done so!) for a project that is started within three months.

But if it becomes obvious that the prospect is not going to kick things off anytime soon, leave your card and walk away.  Stop wasting time.

3.   You’re not speaking with the decision-maker

SYMPTOM: You know or suspect that the person with whom you are speaking may not have the authority to green-light the project or sale.  It’s not uncommon to have an early conversation or two with a lieutenant in the company, but important deals are basically never negotiated by anyone but the C-Suite, Directors or VPs.

TACTIC: Show respect for the person you’re speaking with and ask if s/he is the decision-maker (you may be able to guess by the job title).  If the decision-maker is your contact’s boss, ask when the boss will join your meetings.  Suggest bringing the boss in by Skype or conference call, so s/he can directly ask questions of you and you can sell the person who  needs to be sold.  The boss will also be able to confirm the budget and any deadlines.

4.   Your price is too high

SYMPTOM: The prospect feels that your price is too high.  This complaint is often a smokescreen, or a bullying tactic.  Some clients make a sport of squeezing a small vendor on price because they enjoy exploiting others.  Other times, the client really does have a limited budget and can only afford to pay so much.  If the company is small, you can perhaps assume the latter and if your prospect is with a large organization, it’s probably safe to assume the former.

TACTIC: Ask what the budget is, then ask what the must-haves are re: the product or service that you would provide and then customize according to what you can afford to provide as regards your service or the product features.  Under no circumstances should you lower your price and offer the same level of service or the same product features.  Other options are to throw in value-addeds to sweeten the deal, or to offer an extended payment plan.

Thanks for reading,

Kim

Photograph: Street vendor, courtesy of Sofia Cristina Cordova Valladares (Mexico) on Pixabay

e-Commerce Insights

Plus ca change, plus c’est la meme chose.  Just because everything is different, doesn’t mean that anything has changed.  Way back in the middle of the 20th century, business owners and advertising/marketing specialists learned through experience that the response rate to advertising campaigns, known today in the internet age as the conversion rate, is about 3%.  When you distribute a marketing flier in a chosen geography to announce a new business, for example, either by door to door leafleting or through a mailing, you can expect that 3% or so of the recipients will show up and buy at some point.

In the internet age, Facebook, Instagram, Twitter and YouTube will announce the grand opening.  The business owner will spend several thousand dollars to launch a website that’s e-commerce ready, with a user-friendly and secure payment system and reliable shipping.  Social media accounts are created, text and photos begin the digital marketing campaign.  According to Statista, U.S. retail B2C e-commerce sales in 2017 were approximately $409,208,000 and 2018 retail B2C e-commerce sales have been projected to reach or exceed $461,582,000.

That’s all to the good, but recent research indicates that the internet age has only barely advanced the original direct marketing response rate.  E-commerce sales conversion rates are about 4%, meaning that 96% of your website visitors do not buy.  Your website may be able to attract customers from all over the world, but no matter.  Whether your customers are down the street or in Amsterdam, aided by technology or looking at a flier that was left in the entrance of their apartment building, only a handful will respond to your advertising outreach.

The offline (i.e., in person) sales conversion rate is much more favorable, estimated at 30%. Why such a big gap between online and offline purchasing? Consumer behavior researchers note that trust is integral to making a purchase online or offline, but I’ve not seen research on why trust develops at a much greater rate in offline shopping. I suppose it can be attributed to seeing is believing?

There is another factor as well, one that seems to be overlooked when the discrepancy between online and offline sales conversion rates are compared and that is, the in-store sales help.  The good ones can lead a customer down the garden path with a nice smile, a warm greeting, knowledge of the merchandise and the ability to answer questions and reassure.  Good sales help are integral to generating revenue for the store.

Derrick Neufeld, Associate Professor of Information Systems at Western University’s Ivey Business School in Ontario, Canada and Mahdi Roghanizad, Assistant Professor at Huron University College also at Western University in Ontario, Canada, designed an experiment to study motivating factors in 245 research subjects and learn what might influence online purchases, from facts about secure online payments to the website’s font sizes and colors.  The research subjects were asked to visit the website of a bookstore in Australia that had been in business for 17 years and with whom none of them had previously known or patronized and to then make some buying decisions.

Neufeld and Roghanizad found, surprisingly, that objective information about privacy and secure payment systems have less influence on purchasing than do subjective factors in website design that signal trust.  Online purchases from an unknown entity, in particular, involve risk and potential customers rely more on subjective clues that communicate trust, such as “professionalism” and aesthetics, to make themselves feel comfortable enough to put their money down.

So how might you use this information to support online purchases from your company website? It sounds as if you’d be advised to work with a very talented web designer who understands both the aesthetic and technical aspects of the craft.  The e-commerce focused website must have attractive page layouts and fonts, expert product photography (and maybe a video, too), colors that psychologists have determined will appeal to customers who are known to buy your B2C product and a good overall flow to the website pages.  I recommend that even if it’s a second-tier priority, include a line that verifies the security and privacy of customer financial information.

Think of your e-commerce store in the way that proprietors of bricks and mortar locations do and create an experience that communicates the best that your brand has to offer.  Make your website an attractive, welcoming environment that offers quality merchandise, intuitive navigation and excellent customer service.  Make shopping a satisfying experience, as it is meant to be.

Thanks for reading,

Kim

Photograph: Custom tailoring at Lagu Hong Kong Tailor in Hong Kong, China (2012)

Client Retention: Surpass the Minimum

In 1990, the consulting group Bain & Company and Earl Sasser of the Harvard Business School analyzed the costs and revenues derived from serving clients over their entire purchasing life cycle and found that regardless of the industry, the high cost of acquiring clients will render many business relationships unprofitable during their early years.

Acquiring a new client can cost up to five times more than it does to retain a current client.  It is only over time, when the cost of serving a long-term client falls as the volume of their purchases rises, that these relationships generate big returns.

The Bain-HBS review found that when the client retention rate increases by 5%, profits increase by 25% – 95%.  Also, long-term clients are more likely to refer new clients to the business and increase sales revenues and profits accordingly.

That said, an ongoing client retention strategy is a must-do for all Freelance consultants and business owners.  Read on and discover how your organization can embed client retention practices in nearly every step of your client interactions.

Context and expectations

When you propose a solution designed to help your client resolve a problem or achieve an objective, include in the conversation your rationale for presenting that particular path rather than another.  Make it possible for the client to better appreciate your decision-making process and divulge how you carefully considered his/her priorities, values, budget, staffing, or other factors that impacted your recommended solution.

We may infrequently discuss the behind-the-scenes thinking that guides the possibilities we envision for a client and his/her organization.  Revealing your big picture thinking demonstrates the depth of the value you attach to the client and his/her unique circumstances and that builds loyalty, trust and a good relationship.

Become an adviser

Don’t shy away from asking questions that will surface your client’s sometimes unexpressed expectations or concerns.  You may discover a solution that is ideally tailored to the clients’ needs when you employ the consultative approach to selling.  You and your client can collaborate on the development of the solution if s/he is comfortable with that process.  Buy-in is a given when the client is a co-author of the process.

Along the way, let your client know what to expect as the solution is implemented; it will also be helpful to review what success looks like.  Communicate often, so that the client understands where you are with the project, especially as regards milestones, Key Performance Indicators, the deadline and other agreed-upon metrics.

Moreover, depending on your product or service line, recommend services to your clients, based on their previous purchases.  According to a 2015 survey of marketers, this personalized touch generates a high ROI.  It shows that you’ve paid attention to client preferences and it is a compliment.

Finally, we are nearing Holiday time.  Make sure that you send cards to clients you’ve interacted with over the past five years.  Who among us does not appreciate a card at this time of year, when we reach out to those who matter?

Thanks for reading,

Kim

Photograph: Corine Vermuelen (2013)  Alicia and John George, owners of Motor City Java House in Detroit’s Brightmoor neighborhood

 

 

The Confidence Game

More than a dozen years ago, after being laid off from a Fortune 100 company and learning that hiring managers were not interested in our skills, or they were not interested in those skills when attached to someone over age 40, a work colleague and I each launched ourselves into the self-employed life, specializing in different aspects of business strategy and marketing services.

We each suffered through lean financial times, but eventually I broke through to regularly generate a comfortable, although by no means extravagant, level of business earnings.  Unfortunately,  my friend and colleague has continued to struggle, if not starve.

I was recently inspired to estimate the value that the projects I’m hired to manage bring to my clients’ organizations (an important factor when calculating the project fee, BTW) and concluded that the impact of my work is worth a five-figure sum to the client.  My clients’ confidence in me extends to an unspoken but consistent (monetary) value.  I am trusted to manage the five-figure tier of responsibility for the small and medium size for-profit and not-for-profit organizations on my client roster.

I imagine the limitation is at least partly related to the fact that I work alone (although I have colleagues to enlist if a project exceeds my ability to fulfill the scope).  My projects are mostly ongoing and modestly paying contracts, interspersed with short-term, more lucrative, assignments.  When invited to meet with a prospective client, I usually get hired.

My friend, who also works as a Freelance consultant, is infrequently called to speak with prospective clients about her marketing services and when she is invited to discuss a project, she is seldom hired.  The projects that she aspires to manage can be confidently estimated to have a seven-figure value to her prospects’ organizations.

My theory is that my friend is so seldom hired because even her most solid prospects remain uncomfortable about the capability of a one-person shop to successfully get the job done and help them achieve very important, high price-tag goals.  Her prospective clients apparently do not trust her to successfully manage and impact that tier of responsibility and so she is not hired

At a cocktail party last weekend, I had the unexpected opportunity to meet a lady who does precisely what my friend would like to do.  But this lady does not work alone.  She is part of a three or four person team that offers clients a comprehensive package of services that my friend could never deliver.  I doubt that she could ever persuade those with the necessary expertise and experience to work with her because she lacks the professional stature that would give them the confidence to do so.  My friend and colleague is out of her league and refuses to acknowledge it.

Another acquaintance recently closed her business, rather than sell it (I wonder if she preferred not to disclose financial statements that would reveal to potential buyers that she’d been using her own money to float the organization for five years or more). About three years ago, she invited me to her office to discuss how the two of us might do some business.  We were together for about half the day and we were joined by her second-in-command. Her goal was very straightforward—-win back former clients and acquire new ones.

I suggested the creation of a monthly newsletter, a form of content marketing that has been shown to be an effective client outreach tool if properly chosen topics are featured.  I would be happy to produce the newsletter and take on as much of its production as was mutually agreeable.

That time, I was not hired.  No one was hired and there was no content marketing campaign.  It became obvious that this very elegant lady, who over 50+ years built a business with an enviable client list that was now quite diminished, did not warm up to the current marketing methods, including an e-newsletter.  She did not trust the process.

So what can we learn from these three tales?  First, we can acknowledge that trust and confidence play a foundational role in all relationships, business and personal.  Second, those who elect to go into business or self-employment are advised to offer products or services in which you have the deep knowledge and experience that gives prospective clients and potential referral sources the confidence to hire or recommend you.  Do that and you will succeed in business.

In closing, let’s heed the advice of entrepreneur and selling skills trainer Grant Cardone, author of Sell or Be Sold  (2012), who says that getting sales is often not about money (pricing), but about the buyer having confidence in three things:

  1. Confidence in the product or service
  2. Confidence in the salesperson
  3. Confidence in the company

 

Thanks for reading,

Kim

Image: Luncheon of the Boating Party (1880-81), Pierre-Auguste Renoir

When Negotiating A Project Fee

There are ways to strong-arm a highly competent Freelance professional who is ready to give a client his/her best work into accepting less than that Freelancer’s proposed project fee.  So many desperadoes are willing to work for pennies and that can make it difficult for those whose work quite simply is more valuable because s/he brings expertise and work ethic that ensure the project work will be flawless and client expectations will be met.  Those qualities should justify almost any project fee.  But sometimes, clients like to low-ball.

What do you do when s/he who would be your client tells you that you charge rather more than others for the same work? Remember that the best defense is a good offense and start justifying your pricing strategy from your initial contact with the prospect. Continuously model professionalism and expertise that separate you from the hoi polloi.

Remember also that Rule Number One in the consultant’s bible is to never cut your price. Not-for-profit organizations can receive a 10%- 25% discounted rate, but under no circumstances do you lower your hourly or project fee for any client.

Instead, add in a modest service upgrade at no charge, to make the price more palatable.  You can also scale back the work and that would be associated with a fee reduction, but one does not do the originally requested work for less money.  If the client becomes adamant about receiving the original project specs at less than your proposed fee, then find the courage to walk away.

I know that billable hours may not be falling out of trees, but you cannot participate in a race to the bottom.  Do not get sucked into competing with online Freelance service mills.  Read on and learn to create your rebuttal.

Exhibit your expertise

Clients get what they pay for and pay for what they get! Let prospective clients know that when you are hired, a task can be completely handed over to you and you will own it. Furthermore, you are willing to use your expertise to make suggestions that might improve the quality of the project deliverables.  You are a first-rate service provider who is dependable, responsive, talented and trustworthy.  Your work is done correctly the first time and there will be no need for either micromanaging or do-overs.  The client’s role in completing the project will be much lighter and that adds up to value.  These practices and competencies are reflected in your project fee and hourly rate.

Reveal your responsiveness

Especially when an important deadline looms, reassure your prospect that you are prepared to work hard and ensure that project milestones and the deadline are met.  You understand that sometimes, late nights, weekends and holidays must be at least partly devoted to work.  Your admirable work ethic is reflected in your project fee and clients who are in a hurry find your fee structure reasonable.  Your project fee includes timely communications, responding to feedback, generating ideas and more.

Demonstrate your dependability

Clients can be confident and relax when you are on the job because they know and trust your work, attention to detail and diligence.  You make life easier and allow the client to attend to other duties while you manage the project.  Project work is reliably completed as requested and within budget.  Your clients look good to their superiors, peers and direct reports.  No one winds up with egg on their face when they hire you.

Trot out your testimonials

In addition to your LinkedIn recommendations and endorsements, you no doubt will be able to supply client testimonials from one or two satisfied customers who will speak on the record with a prospective client.  If you have one or two client success stories on your web site so muh the better, as these are case studies that detail the client journey and spell out the wonderful work you can do.

Thanks for reading,

Kim

Photograph: Mike Tyson (left) by Milo threeoneseven for ESPN (date unknown)

 

 

Defending Your Prices 2.0

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

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

Expertise

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

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

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

Dependability

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

Follow-up

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

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

Testimonials

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

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

Thanks for reading,

Kim

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