You’ve just been introduced to a person who was not only pleased to meet you because you have the chops to take on a hot project that’s on his/her radar screen, but additionally has the authority to green-light your hire. Oh, happy day!
You’re thrilled to do the credit card exchange as your newest prospect requires you to make contact so that the both of you can talk specifics. You can almost taste the billable hours, but just how excited in case you be? Statistical probability can enable you to put a dollar value on the happiness quotient.
I found this intriguing formula which uses historical data from sales outcomes and statistical probability data, enabling you to calculate the expected value of your upcoming prospect. As has undoubtedly been reflected in your 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 to control variables, positively impact outcomes, win projects and generate revenue.
Let’s say you’re speaking to a potential customer in regards to a project that you simply estimate may be worth $ten thousand.00. The operative word is estimate. $10K is the potential value, but it’s not the actual value until and unless you or somebody else is awarded the project. If no person wins the project, then it’s worth zero.
The project’s worth is influenced by the odds of an effective close. The subsequent formula enables you to calculate the possibility price of the prospect as well as the project throughout the various stages from the sales process.
The steps within the sales process and the values assigned at each step during this process derive from historical data supplied by a big corporate sales force. To refine the precision, identify the steps inside your usual sales process and record your sales success rates each and every stage of the sales process.
I. Identify the steps in 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 probability of a successful outcome at each step:
* Invitation to talk about 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 every point in the sale for a 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
Exactly what do the statistics mean? If you are invited to fulfill with all the prospect, there is a 2% chance of winning the contract at this point. If in that first appointment the prospect launches a conversation in regards to what would or might be needed with regards to project work, you bump up to an 8% chance of winning the contract. The dollar values tell you how much the sales process is “worth” each and every step that leads as much as signing the agreement, if you can to accomplish this.
If inside the conversation, or in a follow-up conversation or email, you will find a discussion of project specifics, including its purpose, needs and benefits, as well as the talk centers round the suitability of your own rohnfp and expertise for the job, then there is a 25% probability that you will be awarded the project. Should you be invited to submit a written proposal, the chance of signing the contract advances to 65%.
The key to customizing the effects probability formula for your business is keeping detailed records of sales presentations by which to compile your statistics. Here is an additional reason to document your company transactions so that reliable data is going to be there to guide your small business planning.