You’ve just been introduced to a person who was not only 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 perform the card exchange as the newest prospect requires you to make contact so that the two of you can talk specifics. You can almost taste the billable hours, but 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 utilizes historical data from sales outcomes and statistical probability data, enabling you to calculate the expected price of your upcoming prospect. As has no doubt been reflected in your experience, you will find a randomness to networking and Solopreneur consulting contracts. In your effort to bring much-desired predictability and financial security for 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 prospective client regarding a project which you estimate will 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 unless you or somebody else is awarded the project. If no one wins the project, then it’s worth zero.
The project’s worth is impacted by the odds of a successful close. The subsequent formula allows you to calculate the potential value of the prospect and the project through the various stages from the sales process.
The steps inside the sales process and the values assigned at every step in the process are based on historical data provided by a big corporate sales force. To refine the accuracy, identify the steps inside your usual sales process and record your sales success rates at every stage of the sales process.
I. Identify the steps within your sales process:
* Invitation to fulfill 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 every 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 each and every point of the sale for any proposed $10K project
* Invitation to talk about 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
What do the statistics mean? If you are invited to satisfy with the prospect, there is a 2% probability of winning the contract in that point. If because first appointment the prospect launches a discussion in regards to what would or may be needed in terms of project work, you bump up to an 8% probability of winning the agreement. The dollar values let you know just how much the sales process is “worth” at every step that leads as much as signing the contract, if you are able to do so.
If inside the conversation, or in a follow-up conversation or email, there exists a discussion of project specifics, such as its purpose, needs and benefits, and also the talk centers around the suitability of your 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 outcomes probability formula for your enterprise is keeping detailed records of sales presentations out of which to compile your statistics. Here is yet another reason to document your small business transactions in order that reliable data will be there to steer your business planning.