Two real life stories about the views of sales equilibrium
Last week I wrote Inbound 2015 and referenced this graph. How many hours do you need to get a new client? When a new client signs on, how many hours will it take you to make them happy? What is your rhythm with your client? Do you have to sell them every month or do you sell them once and deliver month after month. Think about all that goes into getting a new client. How many hours writing how many blog posts? How many hours at networking events, sharing socially, dialing the phone, exploratory and diagnostic conversations, writing the scope of services, chasing to close the deal, yada, yada, yada? Seriously, 10 hours? 20 hours? 40 hours? to get how much work? 10 hours? 40 hours? 200 hours? Small wonder that business owners struggle to find their equilibrium where there's just the right amount of billable hours sold so that the right number of hours are available to maintain a steady pipeline.
OK. Story #1. (Incidentally, I've seen this dozens of times. My prospect has two clients paying a combined total of $7K/month. They know they should have six clients, but can live on $7K. They realize that if one of their clients goes away, they're screwed, but there's no imminent threat, so let the blogging slide, let the social prospecting slide, give a little extra to the two clients to make sure they stay, be comfortable. Uh-oh. One of the clients isn't behaving. Not responding. Not approving content. Work harder to get decisions. Wait! Not renew? How did that happen? Call Rick to try to save deal that wasn't sold right in the first place. Oh crap. Gone. Now what? How can I find another client right away? How will I pay my bills next week? Why do I do this EVERY time?
Their business is not at equilibrium and they must shift the emphasis to survive. Figure out how many hours are already committed to billable and spend the rest getting new clients. Maybe, temporarily get help to refocus.
Story #2. I started working with a client on 1/1. Same scenario. Couple of clients ≈ $7K/month. Last week they got $10K for first 3 months of 12-18 month engagement. So far this week, developed three strong opportunities for over $100K/year each. On our call yesterday, they said, "I haven't told anybody yet, but I've been thinking that this could be my million dollar year." Now, it's true that these three deals aren't in the bank yet, but here's the good thing. I was hired to get them to $250K/year. Our deal is $6K down against 25% of growth. Pretty sure this client will get to $250K and wouldn't be surprised if they wound up between $500K and $1M because right after our call, they prospected for new opportunities. They realize that they're still to the left of equilibrium and they need to keep filling their pipeline until they reach it. Incidentally, on yesterday's call, they also suggested that they would start lining up sub-contractors to do the work. A new equilibrium!
So, are you at equilibrium or in imminent danger? What do you need to do? How many billable hours do you have committed? How many hours are available to find new business? Do you need temporary help and focus or do you need to be better? Do you know what to do? Can you do it? Will you do it? If you need help with the answers or even the questions, schedule a call.