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 also has the authority to green-light your hire. Oh, happy day!
You’re thrilled to accomplish the card exchange when your newest prospect requires you to make contact in order that the two of you can talk specifics. You can almost taste the billable hours, but just how excited in case 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 next prospect. As has no doubt been reflected in your experience, there is a randomness to networking and Solopreneur consulting contracts. Inside your effort to bring much-desired predictability and financial security for 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 to a potential customer about a project that you estimate will be worth $ten thousand.00. The operative word is estimate. $10K is the potential value, but it’s not the real value until and except if you or someone else is awarded the project. If no person wins the project, then it’s worth zero.
The project’s worth is influenced by the probability of an effective close. The subsequent formula enables you to calculate the possibility price of the prospect and also the project through the entire various stages of the sales process.
Both the steps within the sales process and the values assigned each and every step during this process derive from historical data supplied by a large 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 your 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 odds of an effective outcome each and 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 from 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
What exactly do the statistics mean? Should you be invited to meet using the prospect, there exists a 2% probability 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 in terms of 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 approximately signing the contract, if you can to do this.
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 the talk centers across the suitability of the rohnfp and expertise for the job, then there is a 25% probability that you may be awarded the project. In case you are invited to submit a written proposal, your opportunity of signing the contract advances to 65%.
The key to customizing the effects probability formula for your company is keeping detailed records of sales presentations from which to compile your statistics. Here is an additional reason to document your company transactions to ensure that reliable data will be there to guide your small business planning.