Posts Tagged ‘selling’
In the penultimate entry in my Freelancing and Small Business Blog, I would like to return to the subject of quotations (or proposals). Having spent the last week sending out a dozen or so quotations, I have been reviewing my quotation template to make sure it is up to speed.
Quotation or proposal templates are great; they provide a base format for providing your prospects with estimates for your work, whilst reducing the amount of effort needed to put them together, and at the same time ensuring that no important element is forgotten (easily done when churning out multiple quotations).
My own template is in the form of two word documents – one called “Quotation Template – Basic” and “Quotation Template – Full Proposal”. The two versions carry almost the same elements, it’s just that the Basic version wording is cut down to a minimum whilst the full proposal has more details, more examples and provides more information.
As an example of the differences between the two versions, the “basic” version has a section called “How we work” which says (in a nutshell), “here is the quote, you order, we confirm order and delivery, we do work, we deliver, you pay”. The proposal has multiple paragraphs about all of this, but includes breaking the project into stages, use of my on-line project management system, staged payments, etc. In both formats, the text is pretty set, and very rarely do I need to amend these sorts of text blocks for a new quotation.
Which brings me to the subject of todays (almost last) post….
10 Things that your quotations may be missing
So as part of my review of my templates, I checked that my quotation templates covered in some way these important but often forgotten pieces of information that a client may need before raising an order:
- Currency – Let’s start with an obvious one, the currency of the quotation. It doesn’t matter if you use a £, $ or € symbol in the prices or state explicitly “All prices are in British Pounds”. A lot of companies are multinational, so prices can get confused as they move around.
- When can you start the work – Rather than putting in a specific date (and so making the quote invalid once the date is reached), it’s better to put something generic like “Generally work can be started within 4 weeks of an order/payment being received. But the exact date will be specified upon order confirmation”
- When the job should be complete – This will vary from quotation to quotation (unless you provide the exact same service each and every time), so you just need to check you have a heading or note for this area – and cover it when you put the quotation together in the format “…and will take approximately 7 weeks to complete”
- How long is the quote valid for – Your prices will change (I hope) from time to time so it’s no good your prospects trying to order a 4 year old quote expecting the same prices. My own templates state that “This quotation is valid up to the first day of September following the quotation date at which time we perform an annual price review. After the 1st September, the prices in the quotation may need review before an order can be accepted”
- Does it affect any support arrangements including cost – I have some customers who pay me a support and maintenance payment each year. For these customers, I have a clause (which I remove for non S&M customers) which says if/how it effects this years or next year’s support.
- Does it need any up front actions by the client- payment, hardware, specs, etc – Be clear as part of the quotation what is needed in addition to the order for work to start.
- Who owns the changes, code, designs – It saves the customer having to ask or make assumptions – if making designs, have template text which says who owns the changes, designs, code, files both before and after payment.
- When will you expect payment – In my quotation templates, I include a summary of my terms and conditions, which includes my payment terms, ownership, late payment penalties and other information. Don’t wait till the time of invoice to tell them what your payment terms will be.
- You have the right to reject the order – This may sound odd, but I have a sentence which states in a fluffy way, that I have the right to reject the order. Just because I quote and they raise an order, does not mean I always want to do the work. I may have fallen out with the customer (lots of bad payments), have more important work to do, or am no longer capable of doing the work (2 broken arms?!?).
- What you need to start work – The final thing worth adding to the very last part of your quotation template is the call to action – or what is the next action that you need in order for work to start. Be explicit, even if you have said it earlier in the quotation. Such as “Thank you for the opportunity to bid for this work. In order for me to get started, please send me a bundle of cash as soon as possible” (or whatever your next action is).
I recently had a dinner with my business mentor.
I have great respect for my mentor. He has been in business for over fifty years, and worked his way up from a 1 man band business, to his current position of owning and running three major IT companies with a joint turnover of over £50million a year. When he gives advice and thoughts, I listen.
During the course of the meal, we started talking about social networks media. After all, every other blog post, tweet and conversation seems to be about one form of social media or other.
His thoughts on social media were as follows:
It’s great – for what it is, but think of it this way….
In Africa, wildebeest, zebras and antelopes travel in packs. During the big migrations, these packs can number several million animals. The reason they travel in packs is protection. By traveling in a pack of so many animals, all the same, all in the same direction, the chance of being picked off by a lion or hyena is a lot slimmer. The lesson for such African ‘cattle’ is- do what others do to blend in.
BUT, in business, you don’t want to blend in. Being another zebra amongst the other 10,000 zebras is bad. How are customers supposed to tell one zebra from another? And shouting how different you are, when there are 9,999 voices raised in the same pack, all shouting there own message – well, your message just gets lost in the noise.
And social networking is just like zebras in a pack – yes it’s useful for some situations and it serves a purpose (and should not be ignored), but you will never stand out from the crowd if you are doing the exact same thing as everybody else
So whilst all the social media advice is to create blogs, create twitter streams, facebook pages and the like, maybe the best way of gaining attention is standing away from the crowd.
Again using my business mentors words, when everybody else Zigs, its time for you to Zag. In other words, time to revisit those ‘old school’ marketing techniques that everybody else is now ignoring.
When negotiating with prospects, you will sometimes come across the ‘Day Rate Apprehensive’ customer.
Generally, such customers will demand to know your day rate (even if you intend to quote a fixed price project), and will make all kinds of ‘ohhhhh’ or ‘hmmmmm’ noises, and will try to get you to drop your day rate down.
How should a freelancer, contractor or small business owner deal with those demanding a reduction in your day rate?
I have found the best way to keep the rate the same whilst still winning the business is to make them realise that negation on day rate has absolutely nothing to do with the price they will end up paying.
My two suggestions are:
Option 1 – The Duration Equation. In this discussion, yes, the day rate is indeed one side of the equation. BUT, so is the duration – how long the project will take to complete. Talking about a day rate without considering the effect on duration is a zero-net equation. As the day rate drops, so the duration will increase to balance out the work cost (even if you actually spend the same real time doing the work, and the slack time working on other projects).
Option 2 – The Quality Equation. In this discussion, you may be asked to talk about the day rate but also talk about the duration – in which case the final part of the equation is the quality. This is like haggling over the cost of apples; you may get the same quantity of apples for 4p each rather than the premium 20p apples, but they will be bruised or rotten. If just getting a cheaper apple is the ONLY goal, then a cheaper cost per item is a quick win for the customer – but will either of you be happy in the end? No!!! This is the negotiation to be having with your prospect – a cheaper day rate for the same duration may involve a less skilled (outsourced to a lower skill level) freelancer or overseas development house, which in the end may mean a lower quality delivery, which will then cost more with fixes and problems.
Remember, when you offer a service, you can offer it delivered quickly, cheaply and for the delivery to work – but your prospect can only pick two out of the three.
When your prospect demands all three (and a low day rate), they are really asking for a sub-standard delivery which will cost somebody (either you, or your prospect) more in the longer term. Unless you are really desperate for work, it could end up being you who pays the additional cost, so this is a prospect you should be walking away from.
I’m a freelancer, and this is crazy, but here’s my number, so buy from me maybe.
~ Altered version of Carly Rae Jepsen – Call Me Maybe
I have wanted to write about this subject for a while – and could not work out the way to phrase it. Then, whilst on holiday, I watched a poor lad propose to a girl in front of everybody in a bar, and she said a massive big fat NO!!!
He was devastated. But at least it gave me my hook into this subject.
Entering marriage is very much like the relationship between a freelancer and their prospective customer. It’s true that some customers may just want to grab an item, pay for it and be done with the transaction (such as when using Amazon), but for most time, customers want to be romanced.
Freelancers are brought into companies to carry out important work. But before they will raise an order for the work, the prospect needs to feel special, they need to feel a bond is there, they need to feel important, and they need to feel respected. Above all, they need to feel they can trust you.
Responding to an initial enquiry with a proposal and price is like walking up to a girl in the street and saying “Hi, we have only just met, but will you marry me??”. Good luck with that approach.
Seasoned salesmen always sales say that people don’t buy products, they buy people and relationships.
Also, they need to feel like they are the ones making the decision. Yes, you can persuade them, talk them round, and generally ‘sell’ to them, but if you put them into a corner to force their decision, more likely than not their answer will be NO. That girl in the bar may have said yes if he had asked her on a beach, with just the two of them (its how I asked my wife with no pressure of other people watching.
And just like getting a partner to say yes to marriage, there has to be a demand and desire; a sense of ‘everybody else wants it’. If the poor chap in the bar had proposed marriage when no other woman had shown interest in years, there may be a feeling of desperation – such as “he is asking me because nobody else will have him” – which is never a strong sales position.
But, if other girls were always hitting on him (and of course he was politely turning them down), then he would be in demand which raises interest and he may have had more luck. Put it another way, nobody wants to commit to rejections or the out of date products on the shelf.
It’s why we have panic buying at Christmas time for the latest children’s toy. Everybody wants it because… everybody wants it. Even if they are not sure why.
Of course, being a small freelancer or small business, it’s almost impossible to create this demand (where everybody wants you and everybody knows it). But it is possible to create a cloud of pseudo demand by:
- Not being too demanding or pestering for the work (but that does not mean don’t chase, just do it in a casual way)
- Never say you can start immediately (or at least say you will have to reorganise other projects if the customer prospect demands a quick start)
- You can even use reverse demand by saying “of course, we are selective on the companies we work with, so just need to make sure you meet that criteria” (which puts them into a pseudo exclusive club)
So when you bring it all together, don’t be the chap in the bar. Get to know your prospect, take your time, make the setting right, and then create the demand so that when you propose doing business, they will be happy to say yes.
Over the past few months I have experienced many examples of people running scared (or being too busy).
I received an invoice for services (which I considered were delivered very badly), which I rejected (with an explanation letter), and never heard another thing again. I have been sent various quotations for various bits of work – and not one of the companies or individuals has followed up the quotation with a phone call or email. A company I was working with made a small mistake, and actually sent me an email saying they assumed (with no communication from me) that I would no longer want to work with them and that they would not be invoicing me for the work done thus far.
I am seeing the same similar situations with some of the companies I am working for. I was asked to consult about recruiting and interviewing technical staff for a company. A lot of interviews were arranged, but so few people actually bothered to turn up for the interviews. No phone calls, no explanations, and no reasons – they just didn’t bother to turn up.
And the same is true for demos from companies bidding for a rather large Business Intelligence software sale to one of my customers – four companies booked for demonstrations; two didn’t bother to turn up.
The point of this is – for whatever reason, it should be getting easier out there to find customers, win business and make money.
After all, all you need to turn is turn up, make contact, and follow up.
No body else seems to be bothering to do this.
This scene appears in a wide range of movies (pick from Brazil, the Fifth Element, Hudsucker Proxy, Secret of My Success or a dozen more).
The scene it shows is of alpha-boss type character walking down a (normally grey and dim) corridor. Running behind them, trying to keep up are 3 to 12 YES MEN – all waving pieces of paper. Whatever the boss wants, whatever the question, whatever the need – the answer is YES. (The photo shown as an illustration is Rudy Rhods ‘yes men’ waiting for Korban Dallas to give an answer from the movie, the Fifth Element).
So what’s the point of this movie scene, and how does it relate to freelancing?
Permies are Afraid to Give Bad News
When you are a permanent employee, the perception is that the boss is asking for confirmation. They are asking for you to confirm their decision, agree with their strategies, underline their thinking. In a nutshell, they are asking you to say Yes. After all, the boss is the person who can grant you pay rises or can turn your working day into a living hell.
But as a Freelancer or Contractor, we are brought in to give expert advice. Sometimes, this means saying No. Sometimes it means giving bad news.
The Art of Giving Bad News
But, there is an art to giving bad news. Even when somebody is paying you to review a system or help make an executive decision, bad news and No is not an answer that they will want to hear. At least, not only bad news.
I have years of experience of delivering bad news to customers and senior managers. For whatever reason, the last 2 or 3 months for me has seen a major increase of review projects, where the news was not going to make the manager a happy person.
So I present my suggested steps for delivering bad news to anyone who is paying you to deliver good news:
- Nobody likes surprises. Before delivering the No or bad news, hint in a side chat that the news may not be so good (but you need some more time to review). Allow them some time to adjust to the idea.
- Be specific on your reasons. Don’t just deliver the bad news – say why you have come to your decision – but don’t go overboard either. One or two strong reasons will be sufficient
- Don’t deliver a problem – nobody likes the bearer of bad news. Give the bad news, but follow up immediately with suggestions to change the situation (“I have reviewed your processes and they don’t work. BUT, we can turn this around by…..”)
- When you make suggestions – give 2 or 3 options, and make a recommendation on which you would select. Don’t go overboard on the number of suggestions, this will just add confusion.
- If possible, deliver the bad news in person, but have a supporting document with the recommendations to leave behind for them to think about.
- Don’t be afraid to charge to make the suggested improvements. If you were being paid for a review, it’s just the review and suggestions you are being paid to deliver. Give them ways out with a price tag.
- Don’t go overboard on the selling of the turn-around options – otherwise it could appear as you are delivering bad news just to up-sell. Sometimes, it is prudent to deliver possible solutions on the basis that “Anybody could make these improvements – but if you would like, I would be happy to quote for them, or you could make the changes yourself”
- If it’s down to an individual in the company, don’t name names or point fingers (unless explicitly asked to do so). Normally, just highlighting the problem allows managers to see the department or person responsible.
- Keep to the facts, and don’t turn into a doom sayer. Using big disaster type words (catastrophe, calamity, cataclysm, disaster, worthless, etc) will just make people throw up defences.
- If it’s your fault (something you have done in the past), admit it. Don’t try to hide the fact or blame others. Offer to make the suggested corrections or improvements at your own cost.
Let me kick off this brief discussion about the KISS system with one basic fact….
The more Complex Something is, the more likely it is that it will fail
Now let me expand on this with an example….
Let’s assume you have been tasked to design a prison. This prison will hold just one inmate – for life. So let’s start with the most basic of prison ideas.
You build a prison made up of four walls – the walls are 20 feet tall and 3 foot thick, with no windows or doors. Into this walled box, you put the prisoner. With no tools available – the chances of escape are very slim (other than somebody landing a helicopter in the prison or throwing a rope over the wall). Its simple – it works – it’s almost escape proof.
But, you need to feed the prisoner, and give them a view – so you build a door and a couple of windows. Now, they have a means of escape – the doors and windows become ‘weak points’.
So to compensate, you make it even more complex – now you have to place guards at the doors and windows, and complex locks. But by making it more complex, so it becomes easier to escape – there are more options. Locks can be picked, guards can be bribed.
So the cycle of making things more complex grows, until you have a system so complex that you have introduced 100 ways to escape, and another 100 ways to protect the 100 soft points.
The KISS principle in Business
Software for instance grows to be so complex with so many wiz-bang features that a program can end up with millions of lines of code, and millions of possible bugs. Whenever a change is required, all of the actions of the software have to be considered to see what any changes will break – and things can easily be forgotten. Which is why there are never ending patches in Windows and Microsoft Office Products.
Sometimes it’s too easy to get wrapped up with having the most features, buttons, menus, options, configurations, colours, languages, and choices. But this means more time and cost for design, development and maintenance – and more problems for you and your customers.
So maybe, keeping things simple (at least to start with) is a design and sales tactic worth considering in your next project.
One of the things that has been playing on my mind for the last couple of years has been newsletters. I have read many books, read many blogs and heard many presenters talk about how a newsletter can keep you in a customers/prospects mind. Yes, it all sounds great, but why would anybody want to read a newsletter about my small insignificant company? I mean, ‘breaking news – we have a new pot plant’ just seemed so ridiculous. Yet people go on and on about having a newsletter.
Last week I had a breakthrough, thanks to a fellow freelancer who I met at a technical seminar. Over lunch we got chatting about freelancing, about the time drain that is ‘social media’ and then about newsletters. He said that newsletters had generated a lot of business for him – so I asked what he did.
Newsletters – Are not about News
The advice I received was that newsletters are not in fact about news. He agreed that nobody really cares about you, or your company or your products, or your services, or the new office pot plant. None of this does anything for them. In a word, it’s not useful.
What he did was to turn it into something which delivered value – but didn’t try to sell. Having your name. company name and company logo in front of people on a regular basis is enough to keep you in their mind. He let the constant contact keep his name in everybody’s in tray, but added value to make sure the emails were opened.
So what was his technique?
Share your knowledge on what you do
Its as simple as that. Don’t have a newsletter full of your latest projects – just have a newsletter full of your latest tips. Create from what you know and do.
If you create databases, have regular updates on new functions you have created, clever SQL scripts for doing calculations, or methods of moving databases. If you are a coder or web designer, have a newsletter with CSS examples, or useful subroutines or functions. Provide value to make sure your newsletter is opened every time – and maybe even shared with other people.
It’s a small piece of the Puzzle
Now it may seem that by having a newsletter with a subroutine or function or other bit of code may be giving stuff away for free – and your right, it is just that – free work. But, the bit you give away is a tiny, insignificant, but useful single part of the whole puzzle. That routine may be useful to an old customer or future prospect, but because it’s so small, they cannot complete the whole jigsaw with just that one piece – they still need somebody to create the whole thing and put it together.
A useful technique is to make sure that when you do send out useful stuff in your newsletters, you include comment lines in any example functions and procedures to show what it does, how it works, and make sure to include your name, company and contact details (web URL, email and phone number). That way, if it does add value, your details are always on hand should they look to expand their project and need your assistance (or your details are in the code at their office if they just cut and paste the code you send out).
After all, the whole point of a newsletter is to keep your name and contact details in front of your old contacts and future prospects.
How to get Four times the value
The other technique that I learned (from a 2nd freelancer who joined in our conversation) was to get multiple value from each entry – by reuse.
I have written in the past about my technique of storing useful new techniques and functions I create in Evernote so I can use them in future projects – well this reuse idea just expands for the newsletter.
When I am working on a customer project and I develop a new useful function (say a SQL function to turn a date into a financial month and/or year), I copy that to Evernote for future use. But now what I do is I also turn this into a quick newsletter for my contact list – it doesn’t have to be a long letter (in fact the shorter, the better) – I just explain what it is, how it works, and include the function. Another free newsletter is created.
Then what I do, is I take the exact same newsletter text, and post it on my company blog web site – so it adds value and search ability to my web site.
One bit of created script or function (for a customer project that I am already being paid for) is then used 4 times – on the project, into Evernote for future projects, into my newsletter, and then on my company blog. Maximum value for minimum effort. Perfect.
Next time, I am going to talk about how I get names on my newsletter list, and what software I use.
In my house, we have a wooden plaque with our coat of arms – a merged coat of arms created from my wife’s family crest and my own (with a few whimsical touches thrown in for good measure to make it “us”). On this plaque there are two phrases included which are our family mottos (me and my wife – not our historical family’s).
Every so often, my 10 year old daughter looks at the plaque, runs her fingers over the crest and words, and repeats the phrases to herself – fascinated by their meaning (which we explained when she was very little).
These phrases are not only our family mottos, not only the way we do business, but also the way we ‘do life’.
The phrases are:
“Te Dormio Te Amittere” – which is below our family crest. It’s Latin, and when translated to English, it means “you snooze, you lose” (in other words.. DO IT NOW)
And the other phrase is….
Ask for Nothing and you shall receive it in abundance – not sure where this quotation came from, but it’s very powerful (for us).
Both of these quotes are about the same thing – getting what you want by asking for what you want – and asking now!!!
The Power of Asking
Which leads me on to asking – or more importantly, the way you ask. This can make a huge difference is business and life.
When I was at university studying psychology, I remember this professor giving a series of lectures on the method of asking – and it has stuck with me today. He taught my class that a few choice words can be the difference between getting what you need/want, and not getting anything at all.
Let me give you an example….
Suppose tonight, you have a craving for a steak for your dinner – oh yes, a nice big fat juicy steak – with chips (or fries for my American friends) and all the works – now doesn’t that sound good?
Well you could go home and say “What’s for Dinner?” and hope that in a very unusual alignment of the stars, your partner just happens to want the exact same thing – its not going to happen.
Better would be to say “I fancy steak tonight. Can we have steak tonight?”- which says what you want. But hold on, this still gives lots of other options. You could get a response of “sure thing” (great), but you might also get “no”, or “were having fish” or a host of other replies. So the question is good, but not great.
So what about something more demanding, that says what is going to happen such as “I am going to have steak tonight – want to join me in a steak?” – which says that you are definitely getting your meal of choice – but what about your partner? Well they still have a multiple choice of options including “yes”, “no”, “I have fish here – were having fish” etc. So better, but still not there – you still may be feasting on Mr Fish tonight.
The best way to get what you want is to ask with the assumption already made. “I’m in the mood for steak – yeah, steak is what I am going to have tonight. Now, what time shall we eat our steaks? You hungry now?”. It says your having steak – and it assumes your partner is going to have steak – but it still gives them control about what time to eat – so everybody feels that they have a say. Of course they can still go down the “I don’t want steak” or “Looks, here’s fish” option – but it’s a better conversation to have than the “What’s for dinner?” question.
You have set your position – the rest is down to negotiation.
All of this applies to business questions and more importantly, to selling. You just need to check your customer for feedback to make sure you haven’t crossed the line (in which case, pass it off as humour and take a selling step backwards). But isn’t a conversation which starts with something like “Well here’s the quote – now that we have gone through it, when would you like to schedule the project setup meeting and order the hardware?” a good conversation to be having?
Last month, I went on holiday to China. It was a good holiday. It was a great holiday. But I was puzzled about the flights to and from China.
I flew with British Airways both ways, and noticed that the plane was 25% empty. Economy was packed – not a free seat to be had, but premium, business and first class were practically empty. Not surprising I guess, seeing we are teetering on the brink of another recession and people are cutting back.
But what surprised me was this – why were BA not upgrading passengers? By moving people up one or two grades, they could get more people in the plane and therefore could make more money from the flight.
What is the cost of the Upgrade?
Ok, so maybe I am being optimistic. After all, upgrading somebody from economy to business is just throwing money away. Isn’t it?
But hang on – what is the real cost. The fuel used is the same. The cost of handling the passenger and their bags are the same. They still have to have the same number of stewards. The plane is going there anyway. So what are we really talking in terms of cost to BA? A better meal?
And what about the advantages? They can fit more people on the plane, the flight is greener (more people equals better fuel ratio per flight/person), the stewards in upper class are not so bored.
But the real advantage is that people who only ever travel economy may find what they are missing from travelling premium or business. They may like it so much that they may decide to travel in that class in the future. In a nutshell, it’s a great sale at minimum cost.
Can you give a free upgrade?
So with things being as hard as they are, is it worth thinking about whether you can give a free upgrade to your own customers? If things are fine and you are over busy, then that’s all well and good. But if you have spare time on your hands, is there something else you could offer as a free upgrade?
What about the rights to the source code, or designs, or web content? What about the test data you produced, or access to the specifications, or some after sales support?
Of course, the customer has to know they are being upgraded for it to be worthwhile and seen as good value. Just handing it over is not enough. But saying, “here is the agreed delivery, and as a special treat for your business in these difficult times and as a way of saying thank you, please accept (whatever you are giving them)”.
Point out this is provided as an upgraded for this time only, and that you normally provide this service/feature/benefit as part of your premium service.
You never know, your customers may like it up there in the expensive seats and decided to fly your premium service from now on.