Never Get a ”Real„ Job (21 page)

Principle #4: Go for Base Hits versus Home Runs

Without consistent and recurring revenue, your business won’t be around very long. This is precisely why it’s important to divide your prospects into two categories: base hits and home runs.

Base hits are smaller, bread-and-butter clients that are easiest to target, more readily accessible, and simpler to sell to with few decision makers, shorter sales cycles, and little red tape. Examples of base hits include small and midsize businesses and individual consultancies. These types of clients will not offer you margins you can retire on, but converting these prospects into bankable anchor clients is crucial, because they are responsible for providing you with the majority of your cash flow. These clients will also be your primary word-of-mouth influencers and reputation builders within your field and community.

Home runs may draw big cheers, but they are few and far between; so until you’ve worked all the kinks out of your business and have a steady flow of base hits under your belt, avoid them entirely. Home-run sales cycles are not conducive to your cash-flow requirements or your bottom line. If home runs don’t turn you down at square one, the pitch process could take months or even years just to get an official rejection, if you get an answer at all.

Base run clients will attract other base run clients. And several base run clients will give you a better chance of attracting a home-run client.

Mind you, I’m certainly not advocating that you never swing for the fences. Once you knock one out of the park, others will follow. However, don’t make home runs your first priority. Concentrate on getting on base and driving a few runs home to improve your record before you trade up for the heavy hitters. Once you’ve accumulated enough base hits to support your life burn rate, use your winning record to boost your confidence and win over future fans.

Principle #5: Underprice and Overdeliver

Plain and simple, your initial pricing strategy needs to attract base hits. Later on, you can worry about getting what you truly deserve, or take the time to break down your business model into 500 different pricing plans. Only one thing is important right now—immediate revenue.

Unlike larger competitors that must factor in their infrastructures and overhead expenses into their pricing models, you need only consider these three things: the acceptable price point range in your niche marketplace, your life burn rate, and the fixed costs associated with your product or service. These cost savings provide you an advantage. But being able to undercut the competition on price won’t be enough. The best way to put a dagger through the heart of your competitors is to pack a one-two punch and kill them on service as well as price. After all, if you were happily doing business with a vendor, would a minor dollar difference really compel you to change service providers? Probably not.

When I consulted with high school memory product company Yearbook Innovation, we took on our conglomerate competition with a program called Save 20. The concept was simple: Slash competitor yearbook bids by a guaranteed 20 percent, eliminate late fees and penalties that plagued schools, and offer more design and customer support services than any of our other competitors could provide for free—while providing a product of equal or better quality than the competition. Save 20 allowed us to take a large percentage of local marketshare away from well-entrenched competitors. When Yearbook Innovation’s competitors caught wind of the program and started lowering their prices to remain competitive, we took advantage of the situation by showing their clients how much they had been ripped off during their previous contract period. Over a five-year period, we found some schools would have saved nearly $100,000 if their vendor had given them the cheaper pricing to begin with. This won us even more clients.

Slash competitor prices to break their legs and open doors to more prospects. Eliminate any competitive disadvantages by at the
very
least matching their abilities. Then, throw more value into the mix in the form of free services or customer support to break their backs and close more deals. However, never let your freebies turn into cost centers or time drains. Use inexpensive tactics and perceived value adds to bend your competitors into submission.

There is always a way to top your competition. But simply claiming that you can offer more isn’t enough. Overdeliver on your promises while still remaining profitable and proficient and you’ll be winning more market share as a result.

Principle #6: Read the Lead

Power sellers are perceptive individuals who can discern a prospect’s legitimacy and available funds instantly by using visual and audio clues. They use their findings to determine the best approach of attack—and whether it’s even worth pouncing at all.

Right before you meet or speak with prospects, investigate them. Does your previous correspondence indicate serious and genuine interest or represent a general, blasé inquiry? Did you seek out the prospect or did they look for you? Does the customer’s inquiry seem legitimate or a waste of time? What does the company’s location, office attire, Web site, and management team tell you about your prospect’s tolerance for vendor pricing? Does the vibe of the company’s office scream frugal or carefree? Do their client rosters tell you how much revenue they generate? Do their previous vendors give you an idea of how much they are willing to pay for services rendered? Do their demeanors suggest they’ll be dream clients or horrid nightmares?

Seek out clues to determine the best pitch, pricing model, and right amount of time needed to dedicate to each sales initiative. Look deeper into every asset and clue at your disposal—from e-mail responses to the prospect’s background—to figure out everything you need to know to craft an educated, customized, and well-informed pitch. The more you know ahead of time, the more likely you’ll be to strike a deal.

Principle #7: Shut Up and Listen to the Customer!

If your pitch materials are effective and generate interest, they will start a conversation, one that should be driven by your prospect, not you. Bragging about your business and telling your customer every boilerplate reason they so desperately need your service will do nothing more than compel them to hang up on you faster than a telemarketer.

Steer clear of lectures and bragging sessions. Instead, talk to perspective clients about their favorite thing: themselves. Ask them specific questions about their business to learn more about their needs. What are their major pain points? What qualities are they looking for in a product or service provider? What have they tried that hasn’t worked in the past and why? What customer service do they expect to receive? What are their biggest hesitations about hiring you or a competitor?

Listen for key points and keep the tone light and conversational. Often, your customers will be more than willing to give you the exact information you need to make a sale. All you have to do is shut up and listen.

Principle #8: Pull Out the Good Guy Deals

No one wants to be proven wrong or get in trouble because they backed your product or service and it ended up going south. This is why most prospects will say no to you before you even get the chance to deliver your pitch. Saying no is always a safe bet. Unlike saying yes, no is uncomplicated, quick, and leaves little room for mistakes, errors, or negative consequences. This is why you need to have a few tricks up your sleeves that allow you to make offers to your prospects that they can’t refuse.

I call these “Good Guy Deals.”

Good Guy Deals are predetermined, unpublicized special offers that you can use in unique circumstances to close sales and get you “good guy” status with your prospects and clients. Preparing great Good Guy Deals can mean the difference between your business landing a new customer or losing one to a competitor.

Good Guys Deals are different for every business, but typically come in the form of price reductions, discounted services, or gifts. There are three kinds of Good Guy Deals: the unbeatable offer, the favor, and the friends and family plan.

The
unbeatable offer
is a one-time deal that your competition can’t match or beat. It may be an unbeatable discount, such as 80 percent off, or an unbeatable package deal, such as 10 for the price of 1. Sizzle It!’s unbeatable offer was a “name your price” deal. This was an understandably risky proposition during the founding stages of the company, which is why I only offered it to major influencers who operated in my niche marketplace—such as trade organizations and gatekeepers to large mailing lists—that I truly believed would increase overall business and wouldn’t lowball us too much.

These deals are often unprofitable but are meant to secure big fish, monster business referrers, and long-term clients. Don’t just provide this opportunity to everyone and his or her mother; this should be a last resort. Make it clear to your prospect that you expect a long-term relationship and client referrals in return for the unbeatable offer.

The
favor deal
is another one-time offer used to help your customer get out of a tough spot, such as budget constraints, time crunches, or a bad experience with a competitor. The favor deal often entails going above and beyond your typical service offering for less money or completing a task in a shorter period of time in order to help someone out of a bind. Again subtly remind the client when you offer a Good Guy Deal that you expect them to return the favor with future purchases and referrals.

Finally, the
friends and family plan
is a permanent discount or deal given to select regular clients. This can be a great way to reward customers for their loyalty or seal the deal with a client who has benefited from an unbeatable offer.

Know the hard cost and minimum time requirements before implementing any Good Guy Deals. You should also know what your competition can and can’t offer. If the competition is a large conglomerate, beat it with your highly personal service offers. If your competitors are smaller mom-and-pop shops, blow them out of the water with an influx of additional services that the competition can’t afford to take on.

Good Guy Deals should not put you in a position where you end up overpromising and underdelivering—or worse, not being able to deliver at all. These deals are meant to bolster your position and win business. Avoid on-spec work or services produced under cost unless you determine it’s absolutely necessary and warranted given the situation.

Be selective and learn to recognize which clients need an incentive to buy and which don’t. These tactics aren’t meant for everyday use. In fact, the faster you can rid yourself of the unbeatable deal altogether, the better off you’ll be.

Most importantly—know when to walk away from a prospect and abandon a sale. Customers—not prospects—are always right. If a prospect is asking you to beat your already unbeatable offer, then they’re too stupid to realize how one-sided your Good Guy Deal is and aren’t worth another second of your time.

Principle #9: Push No-Brainer Up-Sells on Clients

Just because you need to offer more than the competition to sell prospects doesn’t mean you should offer them everything.

Up-sells are sales that come at the tail end of a sales transaction. They are most successful when they are relevant or offer added value to the customer’s purchase. Examples include extended customer service and support programs, complementary products to the main purchase, and package deals such as “buy five get one free.” If you’re a lawn care service provider, you might consider offering clients a premium mulch treatment for a reduced rate. If you own a tutoring service, you might sell useful educational materials such as textbooks and study guides.

Always look to increase your profit margin per transaction.

You’ve already done the hard part: convinced them to say yes. Now it’s time to get them to say it again. Determine a series of uncomplicated, straightforward, reasonably priced offers that can increase your bottom line with minimum costs and make it a point to mention these up-sell opportunities right before the completion of a sales transaction.

Principle #10: Build a Spy Network

Face it: Most of your prospects won’t translate into sales. Many won’t even return calls or e-mail. But just because those who did give you the time of day didn’t cough up the dough doesn’t mean they still can’t play a vital role in building your business’s sales.

Believe it or not, a no can often prove more valuable than a yes.

If someone who ended up going with your competitor is willing to take five minutes out of their day to offer you honest criticism about why your company didn’t cut it, then shut up and take it. Let them revel in their momentary superiority. After all, your objective is far more important than relishing in a fleeting power trip. Your aim must be to unknowingly convert these nonclients into free snitches about your competitors.