You’ve just been introduced to someone 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 also has the authority to green-light your hire. Oh, happy day!
You’re thrilled to accomplish the credit card exchange as the newest prospect requires you to make contact to ensure that the both of you can talk specifics. You can almost taste the billable hours, but how excited in the event you be? Statistical probability can assist you to put a dollar value on your happiness quotient.
I found this intriguing formula that uses historical data from sales outcomes and statistical probability data, allowing you to calculate the expected value of your next prospect. As has undoubtedly been reflected within your experience, there exists a randomness to networking and Solopreneur consulting contracts. Within your effort to take much-desired predictability and financial security in your life, the Solopreneuer’s objective is to control variables, positively impact outcomes, win projects and generate revenue.
Let’s say you’re speaking with a potential client in regards to a project which you estimate is worth $10,000.00. The operative word is estimate. $10K will be the potential value, but it’s not the actual value until and until 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 odds of an excellent close. These formula allows you to calculate the possible value of the prospect and also the project through the various stages of the sales process.
Both the steps inside the sales process as well as the values assigned each and every step during this process are derived from historical data provided by a large corporate sales force. To refine the precision, identify the steps in your usual sales process and record your profits success rates at each stage of your own sales process.
I. Identify the steps in your sales process:
* Invitation to satisfy 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 each point of the sale for any 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
What exactly do the statistics mean? If you are invited to meet using the prospect, there is a 2% chance of winning the contract at this point. If in that first appointment the prospect launches a discussion in regards to what would or may be needed with regards to project work, you bump approximately an 8% probability of winning the contract. The dollar values let you know how much the sales process is “worth” at every step that leads approximately signing the contract, if you can to do so.
If in 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 also the talk centers around the suitability of the rohnfp and expertise to complete the job, then there is a 25% probability that you will be awarded the project. In case 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 business is keeping detailed records of sales presentations from which to compile your statistics. Here is yet another reason to document your company transactions so that reliable data will likely be there to guide your business planning.