- Know the Context
- Identify the Decision
- See the Possibilities
- Validate Options
- Make a Plan
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These questions don’t stay static. They deserve regular review, no matter what your business. When we started consulting, we would have said the most valuable service was in-depth medical interviews, in situ in specialists’ offices. And the customer who bought those was usually a pharmaceutical company with a very specialized product, like a cancer treatment. Now, the highest value services are consulting with companies who are entering new markets, on market selection, or facilitating strategic decision-making. And the clients are varied, but always scientific, technical, medical, or industrial B2B companies.
Once you have a good picture of the key product or service, and who buys it, it’s time to think about how to get it to them. Are the clients remote, or local? Do they need to see you to receive the service? Can it be shipped? Must it be? Figuring that out can be a challenge, and it takes a lot of legwork to determine the most efficient and effective way. More than one channel may be needed. Determining it is a necessity, as it will be a critical part of your cost structure, as well as your value proposition. Are you the fastest? The most thorough? The newest? Each of these directly impacts your channel choice. Moreover, communicating to your customer which channel your using, may be relevant. You might think that those strategy facilitations are always in person for us, for example, but we have tools that let our clients gather together a team from around the globe, and make decisions as effectively as if they were in the same room. So keep an open mind, and find the channel that’s just right for you and your MVC.
Like every facet of your strategy, pricing decisions are ultimately on you. With a physical product, you can look at the costs associated with producing or acquiring the product, storing it, selling it, and shipping it to the customer. It’s worth looking at “product you” the same way. One big mistake we see with new consultants or service providers, is that they charge an hourly rate that sounds high enough…if they’re working 40 hours a week, for 40+ weeks a year. If you’re a solopreneur, this simply isn’t realistic. You need time to run your business, doing bookkeeping, accounting, and paperwork, or meeting or conversing with partners who do those things for you. You need time to sell to your customers (or you need to make enough on your service to pay a sales person to help). You get the picture. So how do you know the appropriate rate to charge? What if the client schedule has slippage or they delay the start of a project, so the dates when you thought you would be making the income are “missed”?
First, think about your costs – whatever overhead you have, whether it’s rent, your cellphone bill, professional associations, networking meetings…the list could be endless, if you let it. Then consider how much you want to make every year, net of fees or taxes. Add it up. How much vacation will you take? How much selling time will you need? (A good rule of thumb is that you, or someone, will probably need to spend at least five hours selling for every hour you deliver, especially with new clients). Divide this by the number of hours you realistically expect to spend delivering the work. That’s your charge-out rate.
What about cost overruns? You can have a series of up-charges for clients who have scope creep every time they come with a project. Truth be told, though, in most cases you want to avoid this, because the aforementioned newcomers to the market will bend over backwards for very little money, in an attempt to build their client base. Your client may come back to you after they’ve been stung by these inexperienced competitors, but they’ll have spent their budget, and you can’t get that project back. Instead, build in some wiggle room that you can live with. In our own case, we let new clients know that we have standard pricing that we apply to projects, and we estimate the scope according to their brief. When we have more experience working together, and they become a repeat customer, we will consider more favourable pricing, but we never discount out of the gate. We also explain at the start that the pricing we charge is adjusted for their second project – if they turn out to have an issue with scope-creep, we’ll raise the rate we charge them in future. This means we can stand firm on the charge-out rate, and make it up on the honour system, later. Of course if there are costs that have been incurred, like space rentals, that had to be paid twice, we expect them to cover those costs.
Explaining why a price has gone up for project two isn’t always easy. When you need to do this, consider using the airline seats discussion. Although they may get their weekly or monthly paycheque no matter what, as a service provider, you get paid when you work. If you have blocked time and turned down other clients for that time period, you can’t “sell that seat” to someone else. The risk is that they will go elsewhere, to someone who is willing to under-charge for the work involved, but wouldn’t you rather have that, and search for a client who’s willing to pay what you’re worth?
If you’re finding it hard to make time to think about strategic questions like these, because you’re so busy working in the business, that you can’t work on your business, let’s take a look at your strategy. There’s definitely a better way. I’m Megann Willson, and I’m one of the partners here at PANOPTIKA. Let’s get you the money you deserve.
When you’re planning your business, ask yourself what the space signifies to the customer, and whether you can achieve that signal in another way that’s less costly, and that ties up less of your resources. We’ve spent so much time making remote work possible for employees of large organizations, there’s no reason you can’t build this into your own business, as well.
I’m Megann Willson, and I’m one of the Partners in PANOPTIKA. We work with our clients to help you see everything you need to know to make better business and career decisions. Want more insights to help you grow? Follow us on Twitter, Facebook, or LinkedIn. Then sign up before Friday to receive the next issue of our News You Can Use.
Although we’d all like to believe that our service, gizmo, or gadget is the only choice our customer will ever need or want, the truth is, there are very few cases where that’s true. More often, we have to compete with something, or someone. This is the tricky bit. When it comes to describing why that service, gizmo, or gadget is better, our mindset can be a real barrier. This goes double if wat we’re selling is our own talents and capabilities. Where is the line between confidence, and over-confidence? How do you know the difference between “my way of doing this is better”, or “my product/shop/invention is better”, and “I’m better”? Reconciling the tension between innovator and impostor is often what will make or break the sale.
How can you make sure that tension doesn’t “snap” the sale? First, write down the story you’re planning to tell (whether that’s your pitch to a new boss, or to a new client). What are the advantages you’re describing? Are they real? Are you confident you’re telling the truth? If not, where isn’t it working? Fix the facts, not the adjectives. If the facts are true, but your discomfort has to do with feeling boastful, or bragging, ask yourself whether it would sound true, if your biggest supporter was saying it. If it would, then you’ve got some work to do, because the problem is you.
When you feel like an impostor or a liar when you tell your story, this feeling is transmitted to the person watching or listening, even if you don’t realize that. It’s fine to be humble. It’s not fine to be modest. New business people often confuse the two, especially if they don’t have much selling experience. Humble means unassuming – not taking too much for granted. Modest can mean that, too, but it also means shy, or uncertain. And who would be confident buying something that even the salesperson isn’t not certain of? No one.
So, the next time you’re preparing to make a sale, give yourself time in advance to practice. Write the story so you’re sure it’s true. Check your facts. Read it in the voice of your biggest supporter. Use the adjectives they would use. Then say it out loud until you’re confident, and make sure your own fear of the spotlight isn’t standing in the way of your success.
I’m Megann Willson, and with my business partner and husband, Steve Willson, we’re PANOPTIKA. He’s my biggest supporter, and I’m his. You can find more insights from us on how to make better decisions for your business, on Twitter, Facebook, or LinkedIn. And if you’d like regular insights direct to your inbox, sign up using the button below, and we’ll see you on Friday.
The first truth is this: knowing your customer is absolutely critical. The second truth is this: you need money to have a viable, ongoing business. And the third: sooner or later, to get money, you’re going to have to sell something – whether that something is a product or a service. Revenue is how you pay the bills, pay yourself, fund the work, even if you’re a social enterprise or not-for-profit. Remember: not-for-profit doesn’t mean, “doesn’t bring in money”.
So how do you figure out what it is that you sell? If it’s a widget, a chicken, or an egg, you’ve got the beginning of a description. If it’s more complicated, you need to be able to distill your product (or service) description down to something even your grandma or your five-year-old nephew could explain. Why? Simple: because the more people who know how to describe what you sell and why it’s great, the more unofficial salespeople you can have out there in the world, for free, generating leads for you. So go ahead. Break all those rules we’ve told you about customer focus, and take some time to figure out the easiest way to describe what it is you sell. You’ll be glad you did.
This morning one of our connections posted a reminder that we are at the end of the quarter. Now we’re bracing for the inevitable. At least one client is bound to call or email today with a panicky-sounding voice, about how they need research or strategy work, because they’ve just realized we are at the end of the quarter, and they really, truly, meant to get started in January.
Does this sound like someone you know? If you’re in the business of customer understanding or user insights, and this happens, it can be tempting to respond by taking your hard-won budget, and doing a study that answers all of their questions…at this point in time. Will that let you see everything you need to know?
Snapshots can be really helpful, it’s true. It’s worth considering, though, whether a time exposure might reveal something extra. Setting up a program that opens the aperture to your customers and lets data flow in over time, can reveal patterns in ways that a single study can’t do (no matter how powerful). And sometimes it can be inexpensive to do this, by giving a “camera” to each of your customer-facing colleagues.
Setting up a story bank where their pictures and observations can be gathered and shared is a really useful way to do this. (Don’t know how to start? Let’s talk. We can help.)
I’m Megann Willson, and I’m one of the Partners here at PANOPTIKA. We help our clients see everything they need to know, to make better business and career decisions. Our specialty is finding novel ways to get answers to tricky questions. You can also find us on Twitter, LinkedIn, or Facebook, and for weekly insights and offers, why not subscribe to our Friday news you can use? There’s a button just below to help you do that. Next issue drops around 3pm, so sign up before that and receive your first issue this week.
What about energized, excited, or enthusiastic?
Last summer, I spent several weeks working with a client to get ready for an important strategy session. They know there are big shifts looming on the horizon, and they want to be ready. They’ve done the right thing by taking a proactive approach, and they’ve been looking at data, exploring potential outcomes, and discussing “how might we” scenarios. Yet suddenly, in the midst of a session with outside partners, key team members, and even an advisor from head office, they weren’t making headway. Someone said, “Let’s change the focus entirely!”
Now there are times when this might just be a tactic to avoid hard conversations, but in this case, it was because they realized they were looking at the problem through the wrong lens. Their problem definition was out of whack, and they got clarity on this because they had everyone in the room, and because they weren’t so married to the facilitation method they had chosen, that they kept trying to force-fit solutions to the wrong problem. Once they stepped back and framed the challenge in a new way, they were able to very quickly devine the realm of possible scenarios, determine how they could respond to these in their own favour, and what proactive steps they could take right now, to get ready for the most likely eventualities.
The change in energy in the room at the end of the day was palpable. And as a facilitator, it was a pretty spectacular ending for me, as well.
I’m Megann Willson, and I’m one of the Partners here at PANOPTIKA. We work with our clients to see everything they need to know to make better decisions, so they can find, understand, and keep their customers. You can find Partner Steve Willson and I on LinkedIn, Twitter, or Facebook. If you’d like more insights delivered to your inbox, or help facilitating your upcoming strategy session, click the button below and sign up for our insiders’ circle. You’ll be glad you did.
Why all this religious explanation in a blog where we usually talk about research, strategy, and customer understanding? Because just like Shrove Tuesday, what you tell your customer about yourself (the preparation, scorekeeping, and effort) isn’t the most important part of your story – what your customer believes about you is. That’s what they’ll communicate to others, and that’s what will impact the reputation of your company, your brand, or you. Give them your best, make sure they know your true story, and maybe they’ll remember more than the pancakes.
Learning about the technical specs of a scientific innovation. Exploring country data from the CIA. Studying environmental protection regulations. Investigating commitments to climate-change agreements in multiple countries. Researching trade data on purchasing patterns in five different verticals. Interviewing key stakeholders in the three most promising industrial sectors.
What do these things have in common? They were all part of an “unknown unknowns” exploration we did for a client of ours. If you’re in an established business, with multiple competitors, chances are, there’s data out there to help you make key market decisions. If you sell soup, soap, or shampoo, there are often standard reports than can be purchased quickly, and many case studies to help guide your thinking. But if you’ve invented a new scientific/industrial/biotech/pharma type thing, that theoretically has multiple applications, in several verticals, how do you make an argument that it’s possible to commercialize? When we set out to do a market landscape for a product that’s almost ready to market, there isn’t usually a simple answer ready and waiting. Instead, we do a deep dive with you about your product. Then we use our expertise at multi-modal research to decide the best way to narrow down your options, as cost-effectively as possible. Finally, we find experts on the ground who have similar or related expertise, to help us get the answers you need to make critical decisions about your business. That’s what we did with the exploration at the start of this story.
The good news? At the end of it all, our client got an innovation grant that helped him and his team to scale their operations, and a few years later, they’re running a thriving business with operations in multiple countries and for several industrial verticals. We’re proud to have played a small part in that. All because we like to help our customers see everything, and make better decisions.
I’m Megann Willson, and I’m one of the Partners here at PANOPTIKA. We work with all our clients to see everything they need to know to make better decisions. That means following a lot of different threads, sometimes, and then weaving together a story that makes sense no matter how complex or ambiguious their decision seems at the beginning of the journey. We can help your team, too. For more insights, follow us on Twitter, Facebook, or LinkedIn, and sign up for weekly news you can use with the orange button, below.