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 additionally has the authority to green-light your hire. Oh, happy day!
You’re thrilled to perform the card exchange as your newest prospect requires you to make contact in order that the both of you can talk specifics. You can almost taste the billable hours, but how excited should you be? Statistical probability can enable you to put a dollar value on your 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 next prospect. As has undoubtedly been reflected in your experience, there is a randomness to networking and Solopreneur consulting contracts. In your effort to bring much-desired predictability and financial security in your life, the Solopreneuer’s objective would be to control variables, positively impact outcomes, win projects and generate revenue.
Let’s say you’re speaking with a potential client regarding a project which you estimate will be worth $10,000.00. The operative word is estimate. $10K is the potential value, but it’s not the true value until and except if you or somebody else is awarded the project. If no one wins the project, then it’s worth zero.
The project’s worth is influenced by the possibilities of a successful close. These formula allows you to calculate the potential price of the prospect and the project throughout the various stages from the sales process.
The steps in the sales process as well as the values assigned each and every step along the way are derived from historical data offered by a big corporate sales force. To refine the accuracy, identify the steps in your usual sales process and record the sales success rates at each stage of your 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 probability of an effective outcome at each step:
* Invitation to discuss 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 of the sale to get 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? In case you are invited to fulfill using the prospect, there exists a 2% chance of winning the agreement in that point. If because first appointment the prospect launches a conversation as to what would or could be needed when it comes to project work, you bump up to an 8% probability of winning the agreement. The dollar values let you know 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 within the conversation, or in a follow-up conversation or email, there is a discussion of project specifics, like its purpose, needs and benefits, as well as the talk centers around the suitability of your own rohnfp and expertise to complete the job, 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 agreement advances to 65%.
The key to customizing the outcomes probability formula for your enterprise is keeping detailed records of sales presentations by which to compile your statistics. Here is yet another reason to document your company transactions so that reliable data is going to be there to help your company planning.