Focus your energy on building a long-term account pipeline
Every entrepreneur is concerned over the following.
- The next customer contract.
- How not to lose existing customers.
- How to defend their client portfolio from potential competitors.
Every customer is thinking of the below.
- Whether shortlisted service providers can deliver what they are supposed to.
- How to achieve the objectives set by higher management.
We must marry our concerns with our clients’. How so? By focusing on our clients first.
Reducing client uncertainty is key when it comes to structuring 7-digit contracts. When uncertainty drops, trust increases, and client relationship blossoms into the long term.
At that point, our revenue book depth grows. And we get to defend our business from competitors.
You don’t propose to the girl of your dreams on your first date, am I right?
Of course not. And this principle applies to clients as well. Trust is not established within the first 5 minutes of interaction. Or the 1st day.
It takes a series of genuine interactions to bring the clients close to us. Frequent coffee chats can work. But we must demonstrate that we care.
And this is what I mean. Give a damn about your client’s business.
Stop selling for a brief moment. Practice active listening. Try to figure out what your clients are trying to achieve and their blind spots.
Magic happens when we shut our mouths. Shut it for a couple of months. Have your rabbit ears up. Pick up and absorb what clients are telling us. Repeat what they say. Reaffirm what we know.
With time, we become prepared to attend to our client’s needs.
And realize our sales targets.
“One misconception is that entrepreneurs love risk. Actually, we all want things to go as we expect. What you need is a blind optimism and a tolerance for uncertainty.”
I don’t think anyone, clients or entrepreneurs, loves risk. No. But life is filled with uncertainty. They behave like waves, crashing on the shore, one after the other.
We don’t enjoy being buried beneath it. We learned to manage risk.
How do we do that? We absorb our client’s business risk to get business. That means we know what they are and have the capabilities to resolve them.
What do business risks mean? First, there is no one specific business risk. It depends on our client’s business model and industry. Next, business risks manifest themselves in a spectrum of possibilities.
These are the business risks I deal with daily when working with my clients.
- Quality risk.
- Tactical implementation risk.
- Irrelevant metric (KPI) risk.
I will explain what each risk entails and how they can be roadblocks to our future 7-digit sales target when not mitigated effectively.
Quality risk takes a whole new level when you are in the consulting business. I know because I am in this domain as a Pre-Sales Senior Manager in a software product house. The number of defects in the software is irrelevant before signing the deal.
Instead, the ability to communicate our vision and what the future holds matters more.
Clients want to work with consultants who know what they are talking about. They want to know that we are at the cutting edge of their industry.
The best way to showcase our expertise is not by providing a trial license. It is to run projects with our clients, showing them exactly how we have done it before and how we will work with them to realize their vision.
Our ability to demonstrate and deliver mitigates quality risk and tactical implementation risk at once.
When clients are in the same boat as us, understanding why we do what we do, we get to influence their organizational fabric, especially in terms of KPIs. My experience as a consultant tells me this.
When thought processes change, policies change. When policies change, KPIs change. When KPIs change, the organization is ready to evolve along with us.
The keyword is bootstrap.
Clients project quality risk due to uncertainty. They may not trust us, having not worked with us before. If you face this issue, plan for Stage-Gate contracts instead of 1-time big bomb contract to hit your targets.
The Stage-Gate approach decomposes our offer into separate contracts. The idea is to have one contract leading to the other.
This is the setup for my latest Stage-Gate contract structure.
- Phase 1 contract: Pure consulting work. The goal is to define a roadmap for digital transformation.
- Phase 2 contract: 70% software license sale + 30% professional services for immersive training workshops for the pilot initiative involving one country.
- Phase 3 contract: Extension from pilot site to 3 countries in the Asia-Pacific region.
Combined, the total contract value of all contracts adds up to $2.3 million. The Stage-Gate approach for contract structure is practical for the following reasons.
One, we build confidence with our clients, step by step. With time, they understand how we work, and we are dependable.
Two, it takes care of the budget issue. It is easier to get approval for 6-digit contracts (each time) than to get a 7-digit agreement endorsed by all C-Suite members in their quarterly meetings.
Three, each contract is carved out to demonstrate how specific objectives from the management can be achieved. Working towards one goal at a time simplifies project requirements and collaboration needs.
Ultimately, the business case for the next contract is built into the current one. Having a chain of visible contracts behind the current one leads to an account pipeline that can run for years.
And when you have that pipeline visibility, you will hit your 7-digit sales target as I did.
Think account pipeline, not individual big bang contracts.
Clients are swimming in an ocean of business risks. They must cope with uncertainties around their business. One of such uncertainties is their assessment of our competence.
They don’t know how good we are until they work with us. It is the classic chicken-and-egg conundrum.
We can overcome that by structuring Stage-Gate contracts, with each contract focusing on one specific objective.
That way, we get to build an account pipeline for work for years to come.
Oh, and we get to defend our revenue book growth from our competitors too.