You’ve just been introduced to someone 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 accomplish the credit card exchange as your newest prospect asks you to make contact so that the both of you can talk specifics. You can almost taste the billable hours, but how excited should you be? Statistical probability can assist you to put a dollar value on the happiness quotient.
I found this intriguing formula that utilizes 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 in your own experience, you will find a randomness to networking and Solopreneur consulting contracts. In your effort to take 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 talking to a potential customer regarding a project that you simply estimate is worth $10,000.00. The operative word is estimate. $10K is definitely the potential value, but it’s not the true value until and except if 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 probability of a successful close. These formula allows you to calculate the possibility price of the prospect and also the project throughout the various stages of the sales process.
The steps within the sales process as well as the values assigned each and every step along the way derive from historical data offered by a large 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 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 an effective 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 from the sale for a proposed $10K project
* Invitation to discuss 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? Should you be invited to meet with all the prospect, there exists a 2% chance of winning the contract at this point. If because first appointment the prospect launches a conversation in regards to what would or might be needed in terms of project work, you bump as much as an 8% possibility 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 agreement, if you are able to do this.
If within the conversation, or in a follow-up conversation or email, there is a discussion of project specifics, including its purpose, needs and benefits, and the talk centers across the suitability of your rohnfp and expertise to do the job, there is a 25% probability that you may be awarded the project. Should you be 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 business is keeping detailed records of sales presentations out of which to compile your statistics. Here is another reason to document your business transactions so that reliable data will likely be there to help your company planning.