You’ve just been introduced to someone who was not only very happy to meet you because you have the chops to take on a hot project that’s on his/her radar screen, but in addition has the authority to green-light your hire. Oh, happy day!
You’re thrilled to do the card exchange as the newest prospect requires you to make contact to ensure that the two of you can talk specifics. You can almost taste the billable hours, but just how excited in the event you be? Statistical probability can help you put a dollar value on the happiness quotient.
I found this intriguing formula that uses historical data from sales outcomes and statistical probability data, enabling you to calculate the expected worth of your upcoming prospect. As has undoubtedly been reflected in your own experience, there is a randomness to networking and Solopreneur consulting contracts. Within your effort to take much-desired predictability and financial security to your life, the Solopreneuer’s objective is always to control variables, positively impact outcomes, win projects and generate revenue.
Let’s say you’re speaking with a potential customer regarding a project that you estimate may be worth $10,000.00. The operative word is estimate. $10K is definitely the potential value, but it’s not the real value until and except if you or someone else is awarded the project. If no one wins the project, then it’s worth zero.
The project’s worth is impacted by the possibilities of a successful close. The subsequent formula lets you calculate the possible value of the prospect and the project through the various stages from the sales process.
Both steps in the sales process as well as the values assigned at every step along the way derive from historical data supplied by a large corporate sales force. To refine the precision, identify the steps in your usual sales process and record your profits success rates each and every stage of your own sales process.
I. Identify the steps within your sales process:
* Invitation to meet and discuss the project
* Initial appointment / discussion of needs and benefits
* Verbal proposal / assessment of needs and benefits
* Invitation to submit written proposal
II. Determine the odds of a successful outcome at each step:
* Invitation to go over project 2% success
* Initial appointment / discussion of needs 8% success
* Verbal proposal/ assessment of needs and benefits 25% success
* Invitation to submit written proposal 65% success
III. Calculate the dollar value at each point from the sale for a proposed $10K project
* Invitation to go over project $ 200.00
* Initial appointment / discussion of needs $ 800.00
* Verbal proposal / assessment of needs and benefits $2,500.00
* Invitation to submit written proposal $6,500.00
Exactly what do the statistics mean? Should you be invited to fulfill using the prospect, you will find a 2% probability of winning the contract at this point. If in that first appointment the prospect launches a conversation in regards to what would or could be needed in terms of project work, you bump as much as an 8% possibility of winning the contract. The dollar values let you know just how much the sales process is “worth” each and every step that leads approximately signing the agreement, if you are able to accomplish this.
If within the conversation, or in a follow-up conversation or email, there is a discussion of project specifics, such as its purpose, needs and benefits, and the talk centers round the suitability of the rohnfp and expertise to do the job, then there is a 25% probability that you will be awarded the project. If you are invited to submit a written proposal, your chance of signing the agreement advances to 65%.
The key to customizing the effects probability formula for your enterprise is keeping detailed records of sales presentations out of which to compile your statistics. Here is an additional reason to document your small business transactions so that reliable data will be there to guide your business planning.