Can you believe your prospects?

Do our prospects always tell the truth? Some think not and they may be right. As I offer professional services I need a new client to be as committed to our relationship as I would be.

Over the years I have been in practice I have had apparently successful meetings with people who assured me they would be delighted to have me act for them, only to find that I never hear from them again. Should I keep following up and leaving messages? I am inclined to think I should not, because if they are avoiding me they do not wish to commit to me and I need to be paid at some point if I do the work.

So why do some positively encourage us to spend a long time with them with the prospect, in our mind at least, of a happy business relationship? There are two possible explanations. One is that they are not as comfortable with us as we are with them. The other is that they think they can pump more information out of us without having to pay for it. The truth from my side is that often we can fall into the trap of giving useful information which proves to be free in simply selling our services.

For example, if my prospect says that he is unhappy with the tactics used by his current professional in a tax investigation, if I honestly agree that the incumbent adviser is on the right track I will say so. However, if I suggest that I would take a different line, I might hope that I would get the business, but the prospect might simply suggest that his current practitioner change tack in the way I had suggested.

In another instance I came across, the prospect signed up and got past my usually reliable intuition when it comes to spotting hidden agendas. Our relationship did not last long because he would not share vital information with me, and I can only suppose he had some ulterior motive for consulting me in the first place; perhaps a family dispute.

If we keep honesty on our side in terms of what we can do for prospective clients, we will sign up most of them, assuming we are comfortable with them. We must not let such knock-backs from people who are using us get us down. On the contrary, we should be happy we can rise above them. Do you rise enough?

 

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The cost of “fr*e”

English: Yaesu VX-6R handheld amateur radio tr...

Hand-held amateur transceiver (Photo credit: Wikipedia)

We all know that supermarkets are clever in their labelling, trying to make us think we see bargains where there are not. “Only £1 today” might be a special offer or it might be the usual price, or they might have made the packet smaller. We have to be wary.

Sometimes we see clever marketing which is quite admirable. One example recently was in the realm of amateur radio also known as ham radio. (Yes, I have had my licence since I was a young chap.)

There is a nice little hand-held radio transceiver available at a low price, but two organisations have teamed up to sell the radio at the same “bargain” price others do, but bundle it with some low price goodies. They still sell the radio at £70 as do others, but they include a book and a cap and a map too. The total cost of the extras is about £10, I should think, and that cuts into their profit margin per item, but the aim is clearly to sell a lot more. The smaller margin multiplied is worth a lot more than the larger margin with smaller multiple if they did not have the offer available.

You know what? I have it straight from the horse’s mouth that this ploy has worked and they are inundated with orders for the bundle. I might even join in the scramble though I do not need the cap.

Sometimes it pays to think beyond just selling your product or service. Giving more may well bring you far more business, greater turnover, and greater profit. It pays to be inventive in your marketing. Do you offer special bundles to your clientèle?

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Don’t sell yourself short – lessons from a great physicist

 

As you know if you read this blog, I am all for selling our skills on value. All too many business professionals think “How much will it cost me to do a project?”, then they add a bit of a margin for their “wage”, and quote to a prospect. What they do not realise is how much they sell themselves short for three reasons:

English: American physicist Richard Feynman Po...

American physicist Richard Feynman (Photo credit: Wikipedia)

  • They don’t think about how much learning and experience they have put into their project that they have accumulated over so many years
  • They forget how much specific effort they have put into the particular work they will be offering.
  • They forget the value to the client and how to sell that

In many ways, the third reason is the most important. When I meet a new prospect, that person is either looking for a particular problem to be solved, in which case their objective is peace of mind, or they are looking for me to deliver a particular result to help realise an ambition for them; to achieve an objective to make their lives and their financial situation better.

In either case, the prospect is looking for a nice warm feeling inside, and that has a very high value. It does not matter what you think someone else might bill for similar non-standard work. What really matters is what you deliver in terms of satisfaction. If you deliver a great financial result too then that has considerable value too. As long as the client is happy with your professional fee then it must be fair.

Strangely enough I was reminded of that recently when reading the memoirs of Richard Feynman, the great physicist and one of the marvels of the twentieth century. He was a great storyteller.

When he was a lad a fellow student asked him to solve a problem, which he did in twenty minutes or so. Later, when some other students asked him for help with the same problem, he was very quick to come up with the answers. They were very impressed and thought him really clever (which he was) and naturally they would have told everyone else how satisfied they were with the work. Just because he had only solved the problem once, it did not mean it was not of great value to each individual student later.

Feynman dabbled in art later on in his life. He was modest about his artistic achievements, which was uncharacteristic. Of course he certainly had no reason to be modest about his abilities in physics and maths. In my opinion, as someone with not much artistic ability, Feynman was rather good at drawing

He had a painting he was looking to sell. His normal price was $60, but those who commissioned it (brothel owners) did not want it. To sell it to someone else, a friend of Feynman’s suggested he tripled the price because “With art, nobody is really sure of its value, so people often think, ‘If the price is higher, it must be more valuable!’”. He sold it quite quickly to a weather forecaster.

So the value of what you do is in what the client perceives, and it is up to you to help with their perception to give you a fair price and a proper reward for your service. It does not involve ripping off fearful old ladies, but providing the luxury of satisfaction to people who really appreciate what you have done for them. Don’t you agree?

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Giving the customers what they want

 

English: Logo of Marks & Spencer displayed on ...

Logo of Marks & Spencer displayed on products and in stores since 2007. (Photo credit: Wikipedia)

Taking a dip

The famous UK department store chain, Marks and Spencer, has reported falling sales in clothing and non-food items again.

It is sad to see a flagship high street name struggling. They always used to be so reliable for quality shirts and smart wear. I was never a big fan of their underwear though other people always swore by it.

Getting shirty

Someone (actually my Mum) was kind enough to give me some M & S gift vouchers and the other day I went to spend them in the store on (I hoped) a couple of smart cotton shirts. I browsed around the men’s department, and although I found a couple of shirts I quite liked, I thought they were expensive. To put it in context, these shirts were more expensive than I can get in the current sales of the “up-market” Jermyn Street shirt-makers. Of course they do not always have a sale, but my instinct is always to buy on value. I could not find it in M & S.

I was eager to buy. I had “free” money to spend in vouchers; yet I was not prepared to spend on what is not good value.

They can’t tell the bottom from the top

In the clothing market we have generally the “luxury” end and the cheap end. You can buy a poly-cotton shirt for £5.00 though its quality might not be great and it might not last so long or be so comfortable. However it will serve its purpose. You can buy Jermyn Street shirts in the sale or otherwise pay a lot but get quality. There does not seem to be a middle market, and M & S have not understood or adapted to that; certainly not enough for me to see value.

It is our client’s choice, but ours as well

In many businesses including mine, prospects are looking either for a cheap and reliable service, or they want to be cosseted. All too many accountants are simply too generic and undifferentiated. Clients do not feel they are getting much or any more than from the cheaper providers. Their clients want to pay less, because they do not perceive value, although perhaps some would pay a lot more to feel as though they were a firm’s only client and had their full attention at all times.

It is no good chugging along in business assuming that what you have always done will suffice for a client. The market is constantly changing. All of us have to keep selling our value to our clients according to what they actually want; otherwise they will kiss us goodbye, or leave us in a less polite fashion. And we have to choose which part of the market we want to be in, don’t we? That is not the boring middle bit, is it?

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The ignorant blunderbuss approach to sales and marketing

26 Feb 12 upload 024 (2)Knowing our abilities and our limits

My business is helping people with their tax issues, and finding help to support their businesses. I know a lot about how to do that, and that is down to hard work, training and experience. I am not an expert in health and safety or financial advice or insurance or carpet-laying. I would not dream of trying to advice on the first two or get on my knees on the floor to trim a carpet to size. There are people who are much better at doing that.

I am not an expert in social media (no such person) though I know a bit, read what I can about on-line engagement, and learn from people who know more. I pay those people who know more for their advice and for their knowledge. I am their client.

Blundering

So why is it that people blunder into an area, and think they can succeed without studying how it all works, and looking at what the more successful people do. Accountants make that mistake with social media, but so do web-designers and SEO specialists, and, heck, they must spend quite a lot of their lives on-line.

What do you make of a business which says in its Twitter profile: “We are one of the Most Reputed Online & Local Business Branding SEO  SMO Company” and then just tweets from a tech news feed it doesn’t own, with no personal interaction?

What about “Welcome to Prince and Draper’s Twitter page, we are Hertfordshire-based accountants and advisors”? (I changed the name and County). They hardly ever tweet, there is no actual person or photo of the very occasional poster / profile owner

How about a Twitter account in the name of a firm of solicitors “Proud to offer competitive fixed fees across our company / commercial and private client departments” again with no personal interaction.? As an aside, I hate to see “proud” to do anything in a website or marketing page. Why not say how they can help; ease the pain? I despair.

Blunderbuss or scatter-gun?

I was at a business exhibition the other day. I spoke to many people on the various stands and gave my business card to some. Both at the exhibition and since, over the telephone, I have been subjected to sales talk re various products. No one has asked how their product might suit my business. All have been eager to state what discount I would be getting and giving me the whole script. I appreciate they have to make a living, but they won’t if they do not think about the customer.

Why not study the potential customer and think how they might meet the customer’s requirements?

You and I know that we need to give our customers what they want, and that involves listening, not broadcasting a message. It is no good setting up a Twitter page and misusing it, or not using it. It is no good spouting a sales pitch to a business owner you don’t know and have not bothered to find out about.

These poor people are wasting their time. The trouble is they waste ours too, don’t they?

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Dealing with time-wasters and tyre-kickers

Question mark

Many of us who offer professional services get enquiries from people who do not really want to buy. The problem has been the subject of a debate among several of my colleagues and friends, and we have different ways of dealing with the email and telephone enquiries we get.

Some people may have a simple query which they may think they can answer in a couple of minutes and generously charge no fee for doing so. I do not think that is a very good approach because I like to be paid for my expertise even if I am asked what seems a simple question.

A second issue is that if we do not have an in-depth discussion we might not find out important information which the querist has incorrectly discounted as unimportant. That puts us at risk of a negligence claim even if we have not been paid, and at the very least means that we will be wrongly bad-mouthed to other people.

I will always respond by asking a few question, quoting a fee at the start, or in the second contact if I thought I needed to know more before quoting. This filters out those who are trying to get that free information, and establishes whether our prospects are really serious about solving their problem properly and understanding the value of our advice.

Recently I was asked a question which involved both capital gains and inheritance tax issues. I quoted a fee and asked a number of questions about finances involved and time-line etc. I had a reply by email back saying “Thanks, Jon, but we were only looking for general advice. If we need more detailed advice in due course we will be in touch.” In other words they were looking for free advice; otherwise why send a fairly detailed query in the first place?

You and I have worked and studied hard to gain the knowledge to run our businesses. We cannot afford to give it away for free except perhaps to the needy at the lower end of the income scale as otherwise we will also be at that lower end.

How do you deal with the free-loader types?

 

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Tailoring your offering to suit the client

Package deals

In many businesses, including my general area, it is customary to quote package prices. For example, there might be a price for a tax return, and then a price for self-employed accounts and a tax return, one for lettings accounts and tax return, and one for company accounts and tax return.

Clients and prospects know what they are getting, and the businesses offering think in terms of value and profit per package on an average basis, knowing that on some they will make a very good margin, and now and again they will make a loss. It is the overall net profit on the portfolio of compliance clients which counts.

Think about the customer's needs!

Think about the customer’s needs!

 

À la carte

My approach is not quite like that, because although my firm does some of that sort of work, I prefer not to be too tied in to fixed prices. I like the flexibility to tailor my fees according to the value the client actually receives, so that allows me to charge more according to their particular needs, or sometimes less if they really do not want the Full Monty. That aside, a lot of my business is not compliance anyway, and that work has a value which the client and I determine between us in the sales process. The fee will suit both of us if we agree on one, and it is down to me to sell the value.

I think that initial fixed price packages have to be flexible sometimes because not every client with broadly the same description of requirements actually needs the same service. The “one size fits all” approach does not always work. If sellers of services stick to the “fixed” formula they will lose business because their prospective purchasers cannot fit themselves into the packages offered.

How not to do business

A small accountancy or tax practice will have particular requirements for tax software. For example they might have a hundred personal tax clients, but only five partnerships and eight company clients (but their client portfolio might be disproportionate the other way round).

My old software provider charged per module for personal tax, partnerships and company tax. That added up to a lot, especially when they put their prices up. I no longer had value for money, compared with competitors who offered all-in-one packages for those who had client proportions skewed as in my example. I would have paid a high price for services I mostly did not use.

You might say that the old provider did not want my business, but that is not what they said when I tried to negotiate a better deal, and their website purports to attract smaller practices. Anyway, they did not have the common sense to make a deal with me. I wanted something which had real value and not want to pay for what I did not want.

Bespoke suits me!

I took my business to a software house who gave me an all-in deal which was exactly what I wanted. It is good value for me and it works, so I am no trouble to them as a client either.

It is always important to listen to our clients and our prospects to know what they need, and to ensure that they buy on the value of what we give them. If they are happy with us they are happy to pay.

Do you know businesses that have a limited selling policy of “that’s what we offer, so take it or leave it”?

Drilling down the detail of our purchases

Buy from me!

I’m taking notes.

 

Feelings

When we are selling our services, many of our prospects will buy the feeling and the comfort of having someone else take care of things. That is usually my initial approach, and most people do not care about the detail. They just want things taken care of. I feel the same when we are having a new carpet laid. I am not interested in how it is done. My wife and I look forward to the end result.

In business and in life, sometimes the process is important and we need when selling to be open to questions about how we do things. I know I do.

The detail

I have a current health issue (don’t worry) and I have apparently three equally good ways of fixing it. It has been hard to decide which, so I have seen three different consultants to talk through my options. Only after seeing the third and getting some vital information which I had not got from the second guy was I able to choose the second guy’s option. With a complicated issue we really do need to drill down to the detail.

Comfort zone

I use some very specialised software. A year back I had become disillusioned with the inflexible package I was being offered by my then provider, which meant I was paying for stuff I did not need. Nevertheless I was afraid to change because I liked the way the software worked and I was comfortable with it.

Asking questions

I tried several trial versions of software from other providers. I wanted more details from several of these software houses, and some were helpful and others were not. Some had FAQs which they did not answer in a way I understood. The unhelpful companies did not get my business.

The most helpful people were the ones I bought from. Their package is great, and after a year I can say I am very happy. Surprisingly, although I was not hung up on getting the best price, the cost is fairly modest. I expect they sell more because they are so helpful. Good luck to them.

If your prospect wants the detail of what you are selling rather than just looking forward to being pleased with the end result, do indulge them.

If you are buying, sometimes you will put your faith in a person you know. Otherwise, do not be afraid to ask for the detail, particularly if the process is vital to your business.

Do you ask enough questions? Don’t be afraid to.

 

My thanks to Zig Ziglar

Zig Ziglar speaks at the Get Motivated Seminar...

Zig Ziglar speaks at the Get Motivated Seminar at the Cow Palace in Daly City, California. © BrokenSphere / Wikimedia Commons

Zig Ziglar died this week. He was described in a report in his local Dallas newspaper as a motivational speaker. Yes, he was that, but to most of us who have read his books he was the guy who taught us how to sell in a nice way.

Seth Godin  as always puts his message over succinctly and well. Of course I never met Zig and cannot remember how I stumbled upon him, but I keep a copy of his “Selling 101” (not an affiliate link) on my bedside table (or night stand to North Americans).

When I left employment, or it left me, I had little idea of sales technique. The every expression sounds clinical. I had been expected in my employment to sell money-saving schemes to potential clients. I had a strike rate of one-in-three or one-in-four, which wasn’t bad, but let us remember that the prospects had already been warmed by their introducers. I really didn’t know how to deal with objections.

When I became an independent business person I did an intensive sales course which was based on a hard sell to prospects who were found through cold-calling from specialist appointment makers. Many had probably agreed to an appointment to get rid of the caller. They felt no obligation to even be at their premises when we arrived, on at least one occasion I was greeted with two words, the second of which was “off”, and if we did get to have any sort of interview it was going through the motions with little prospect of business being done.

The course I had been on and another I drove a long way to do focused on practically grabbing the prospect by the throat at the end of a very structured interview (from our side) and saying “sign here”. Of course they didn’t, and I wouldn’t have in their position.

I thought I was a hopeless salesman, but then I found Zig and read “I’ll see you at the top”. He with his tales of selling demonstrated how to befriend the prospect, not in a dishonest way, but how to establish a rapport and find out what she or he really wanted. As Zig said, it is about being brief, warm, sincere and friendly. The last three seem obvious now, especially having only later read Dale Carnegie, but the “brief” bit was also important; knowing when to be quiet, but sharing just a little personal information to build the relationship. It all works for me.

No one buys what they don’t want, and I know now that selling can only be done through genuine relationships of mutual respect. I don’t doubt that Zig appreciated “How to Win Friends and Influence People (a volume also beside my bed) but he himself was a giant on the shoulders of giants.

Thank you, Zig.

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Selling our knowledge as a small business service provider

 

So what’s it worth?

They can’t do what we can

Having knowledge, an expertise, is to have a highly valued asset. It is up to us to exploit it as well as we can. If we are service providers there are two ways of doing it. Either might be the right way for us, but it is up to us as to how we use our special knowledge.

Processes

The first way to profit from our knowledge is to sell a process. In one of my businesses the equivalent would be completing tax returns with basic accounts as necessary. This satisfies a need. A client would find the process too much or too incomprehensible to do, or at least to meet the deadline.

No one wants to worry about a fine, and at the same time they want their tax return to be correct. If they don’t have that confidence they pay someone else not only to take on the task, but to take away the worry of having a ghastly chore (as they see it) hanging over them. What they are really paying for is relief from stress.

Valuing the product

From the provider’s point of view, it is mainly a process. Hardly any Tax Returns are exactly the same of course, but the process is something the service provider is very used to doing. However, the sale price (our fee) is based on the length and complexity of the process. It is theoretically a process the client can shop around for, so while there has to be a degree of trust, there tends to be a perceived limit to the value. That is a psychological barrier which is hard to overcome for the provider, no matter how many bells and whistles we attach to make the client feel as happy and comfortable as we can. However, there is a value which we can sell in terms of giving the customers the feel-good factor.

Made to measure

Our second method of selling our knowledge is by providing bespoke consultancy. Accountants, solicitors, architects and all sorts of engineers might do this. People have a specific problem, unique to them, and they need a solution. The solution might be worth a great deal to them, whether (depending on the profession) it is the best way to buy another business, the most tax-efficient way to sell their rental properties, the design of the client’s perfect house or how to build a new bridge across the local river.

There is a significant value in any of these which might involve cost-saving or fulfilling dreams, or simply as a practical solution to a difficult problem. Clients will also pay not just for peace of mind, but to save time, and simply to make their lives easier. When we sell on value here, we should pitch the price as to what it is worth to the client; not what it costs us to do at the time, because that is a totally false basis.

Value yourself

Like all providers, I know what my office costs are, but we who have the knowledge did not gain it overnight. We have been on so many courses, we once burned the midnight oil passing our exams, and we pay a lot to keep ourselves up-to-date with all the latest developments. We have worked hard to have that something others do not have, which is our knowledge; not only that actually in our heads, but the knowledge as to how to find out what we don’t know if you ask us right now.

Never under-value your knowledge. Ask yourself what the imparting of knowledge is worth to your client. Remind yourself how hard you have worked to know what you know. Convince your client of the value. They won’t buy what they don’t value and you don’t want to allow them to buy at a price that doesn’t value you enough.

Reward yourself and give your clients real value for money at a price they and you can afford.