I guess all of us who use social media tools and web applications are to a degree living a public life. After all, that is the purpose, isn’t it – to raise our profiles for marketing purposes? Well, OK, it’s fun too.
Some live more public lives than others of course. They report where they are through foursquare, so we know where they are having lunch, whether posh or fast-food and perhaps they tell us every thought they have chattering on Facebook.
I have a foursquare account although I have done nothing with it. I can’t quite make my mind up about it.
Concerning Facebook, it is my choice not to “let it all hang out”. I do make social comments on my Wall and on other people’s Walls, and if you are my Facebook Friend you could probably get a general idea of my tastes, preferences and interests, without knowing a great deal about my day-to-day life. That is the way I want it.
I don’t think we need to post only business though, on Facebook, FriendFeed or Twitter. I think that we can show something of ourselves through these media, so I am quite happy to pass the time of day on Twitter. I might recommend our local baker or even admit to having a curry. As long as someone does not share the details of every meal, I am quite happy to read about their preparation of Moroccan Lamb, whether they are having a beer with it, or a glass of wine. In fact I might be interested if they can recommend their wine.
You see, I think that having a general rounded idea of someone’s lifestyle and character without the nitty-gritty detail helps build the relationship and therefore the trust, and that is what networking is about, whether on-line or off-line. I don’t need chapter-and-verse of the social life or home life of my business connections, but knowing a certain amount about their tastes helps me to see some of them as business friends, by which I mean people with whom I might do business.
How much is a consultant worth?
A consultant in my network asked what rates he should charge as he was looking for additional work. I guess he was thinking about a day rate, which is a really old-fashioned way of thinking. Our friend also has a serious disadvantage in having no on-line brochure or marketing material in the form of a website, but that’s another story.
“You need to think about value rather than rates. How much value can you bring to the party, how much will you improve the client’s business, how much comfort will the client pay for to have you by his / her side? The old idea of £500 per day or whatever is outdated.
In my business I either quote a fixed fee for my assignment based on value to the client, or I assess the client as to how much he or she will pay for the comfort of having me, but still with an eye to what I can deliver in terms of value. You have to be adaptable.
Of course a couple of day’s work might be worth a lot more than £2,250. It really depends how much value in terms of either profit or comfort or both the consultant is delivering.
Don’t think I am leaping to the defence of the bankers, but there is a row about Barclays Bank paying their chief executive, Bob Diamond, a bonus of quite a few million but the bank has just posted profits of over £6 billion. We may not like the bank’s charges and think they have let us down (although the bank was not bailed out by the Government). However, the bank, board and shareholders may credit Mr Diamond with being responsible for quite a slice of the profit, and that’s a big profit. Hence he has a value to them of a greater amount than most of us will ever see.
Consultants and indeed anyone offering a service should think in terms of what value they can deliver to the client when making a proposal. How much better off will the client be at the end of the assignment or how much value going forward will the client benefit from?
If a client will be £500K better off, a system to achieve this could be billed at £50K even if the setting up of a system or the work involved is comparatively little. If the client is £50K better off, he or she will be happy to pay £5K. It is not the work involved (and if you are selling a system you put in a lot of work at least once), it is always the value to the client which should be billed. If it is a one-off job it may deserve to be billed a lot more than the cost or a now obsolete normal day rate.
The fixed day rate idea always was a bit absurd. If a consultant needs the money and is not busy, it would be sensible to take work at £150 a day or less (if that is all the value was to the client) rather than turn down a job and get nothing. Start-up consultants may turn down work because they think they are “worth more” but it is better to keep their hand in for when the big money saving or profit increase for the client brings the matching big money.
Of course to get the fee on a value basis it has to be sold to the client, but that will be a lot easier if the client understands what the value is. It is better to sell on that basis of “my fee will be £10,000 and will save you at least £50,000 this year, and next year and the year after”.
The day-rate basis (“my fee will be £1,000 per day”) will result in your being shown the door.
Value-billing is the way to go. What to you think?
Going through some old papers the other day I found a note I wrote myself a long time ago. It was a full foolscap page long and addressed my then personal issues at an unhappy time for me. I had forgotten all about doing this.
I had written this note to myself as though I were an onlooker or outsider trying to help, trying to give myself an unbiased perspective. Looking back, I have to say that what I had written to myself was very sensible. I think it made me feel better then and helped me to deal with the problems. Certainly I ended up taking action and resolving them.
Writing letters to myself has become a habit though. Since I have been in business on my own account I have written other notes to myself, listing up problems I thought I had and then writing down possible solutions. It is different from having a business plan, though I do think that we should regularly write down our objectives and check regularly to see how we are doing.
If it doesn’t, and you have no inspiration, you have clarified the problem in written form and can take it to a business confidante for some advice. Mostly I find that I solve the problem myself, or otherwise I know whom to ask or what service to buy in.
We are all different. Most of us whether start-ups or old hands like me will find a self-addressed letter useful. Sometimes we just have to learn what we need by seeing it in print even if we wrote it ourselves like the songwriter. When did you last tell yourself a few home truths?
We all know that when we run a business there are certain expenses we must meet before we can even function. We have motor costs, office costs, insurance, software, hardware and so on. If we have any sense we choose the best options in each category It doesn’t necessarily mean the cheapest, but what fits us best. I think I could find cheaper broadband, but would it be as reliable as what I have and would the support be as good? Heaven preserve us all from my previous ISP!
Why are so many of us afraid to pay for sales and marketing? After all, sales are the lifeblood in any business. Without sales we don’t have a business.
We have to think a little about advertising first, and be choosy. I pay for one paper advert which works well. It is the only one that was ever effective and I have tested a few. Testing is what we have to do.
I buy in webby things too. I pay for decent hosting and management of my blogs.
I want to blog as best I can because blogging brings me business. I am a member of Problogger because I like to learn from others, and of course I pay the small monthly subscription. It’s well worth it. That is not an affiliate link, incidentally.
Test what works and find out what works for you. Talk to other people about what works for them and think how you can adapt it. That will help you not to get it wrong. Marketing isn’t a cost to the business. It is a way of increasing sales, and done properly is an investment that will return many times over the money put in. Buy a book or an E-book, but make sure it is up to date and that you read and act on what it says. If you want to pay a professional to do it for you,, that will take away the stress of thinking about what to do. You will still need to take action.
The enemy is inertia, the fear of getting on your bike and having to take your wallet or purse with you. We don’t sweep our chimney at home because we don’t want the whole downstairs area of our house under two inches of soot. We pay someone. If you haven’t got the expertise, pay someone else. Just don’t wait until your business sales chimney catches fire or is blocked because it hasn’t been swept by someone who know what they are doing. Take action!
Often small businesses, and especially start-ups, skimp on purchasing really important services. Many less experienced people to think they can do everything for themselves. This can lead to giving a really bad impression and a loss of business, which may be repeat business.
I booked an appointment to have my car repaired. I have a track record of using this business over several years, and have found the service good in terms of delivery. I have just had a poor experience because the owner mixed up my appointment for another date in the future, which I would not have agreed to because my car urgently needed attention.
When I made the appointment the business owner took the call. When we spoke there was music in the background, which is not unusual in a car repair shop. However, I now suspect he was actually driving and made the appointment from memory, which turned out to be faulty when he later incorrectly recorded it in his appointment book.
I ended up being very cross that my car was not to be repaired when I thought it was. It was fortuitous that a business meeting I had organised the day after was cancelled by the client, otherwise I would have had to hire a car for the day.
I use a call answering service / virtual assistant. All telephone calls to my office which I cannot take are answered by a real person who takes a message. Virtual assistants can also make bookings, which is really handy if you run a motor service and repair business or are a physiotherapist, osteopath, or almost any type of small business that sees clients regularly.
A prospect who calls and gets voice-mail or suffers an appointment mix-up could easily and immediately go elsewhere as could an established client if it happens more than once. It is not even as though it costs very much to have someone answer your telephone, and if you factor in the sheer value of never missing a call it costs absolutely nothing. On the contrary it helps a business make more money.
Have you suffered similar frustration?
I hadn’t intended to return to the subject of web influence but elsewhere on “the internet” there are people including quite well-known pundits telling us that we should be working on our Klout and PeerIndex ratings because they are supposed to influence how people see us. Apparently the scores affect whether we are invited for interviews in California. Well, maybe it’s the latest thing in Hollywood, but have you been to Hollywood? It really isn’t the real world, is it?
Not every fad will storm the world. It is easy to look up people on-line, and generally the only factor in advance of an interview or business meeting is whether you can find out something about the person. It is not going to be about how big a Klout score they have unless it is crucial to take on someone active in social media. Even then, one should still consider whether the person has true influence or whether they just Tweet links at the rate of one a minute, the on-line equivalent of rabbiting about nothing. Frankly those in the last category don’t have my respect and even if I like them on a personal basis I will miss the quality links amongst the dross. There will be dross in Tweets at the rate of one a minute, too.
So pardon me if I don’t set much store by these indices. I am not being a dog in the manger. My scores with both these measuring tools are fairly respectable according to the aficionados. I prefer simply to measure my influence through feedback from my network and how many enquiries I get re new business.
I don’t need to be judged by people who set store by some measure of fashionable noise making any more than one should be judged on whether one has an IPhone or a Lamborghini. What do you think?
I love being in business, and not being an employee and part of someone else’s business. Many of you have heard that from me before. Just the same it is not all plain sailing and that is partly because we are dealing with other human beings.
Over the years I have had many lovely people as clients and who have appreciated the service they have received. Happy clients are those who are prepared to pay for what they get because of the benefit they perceive. However, there are some who are not very often of a cheerful nature and no matter what they get, try to pay as little as possible for it. These are the glass-half-empty people, the pessimists and the generally grumpy who want to pay as little as possible and never want add-on services. They are the people who can get you down if you let them. This is the Eeyore view of life.
As we have said before, start-up businesses take on as many customers and clients they can get, and that’s only natural. As the business grows and develops, an owner, particularly of a service business, can afford to weed out the ungrateful and low coupon clients and concentrate on the higher value and generally more appreciative clients, and at the same time have more enjoyment in dealing with the higher coupon work which is generally more interesting.
If you haven’t got to the point of being really choosy who you work with, at least sack the miserable cheapskate customers because all you will get from them is grief; you certainly won’t get a decent profit.