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 in addition has the authority to green-light your hire. Oh, happy day!
You’re thrilled to perform the card exchange as your newest prospect asks you to make contact in order that the both of you can talk specifics. You can almost taste the billable hours, but how excited in case you be? Statistical probability can assist you to put a dollar value on your own happiness quotient.
I found this intriguing formula that uses historical data from sales outcomes and statistical probability data, enabling you to calculate the expected price of your next prospect. As has undoubtedly been reflected in your experience, you will find a randomness to networking and Solopreneur consulting contracts. Inside your effort to create much-desired predictability and financial security in your life, the Solopreneuer’s objective is always to control variables, positively impact outcomes, win projects and generate revenue.
Let’s say you’re speaking to a potential client about a project which you estimate will be worth $ten thousand.00. The operative word is estimate. $10K is the potential value, but it’s not the true value until and except if you or someone else is awarded the project. If nobody wins the project, then it’s worth zero.
The project’s worth is impacted by the probability of an effective close. The following formula lets you calculate the possibility price of the prospect and the project through the various stages in the sales process.
The steps inside the sales process and also the values assigned each and every step in the process are derived from historical data provided by a sizable corporate sales force. To refine the precision, identify the steps in your usual sales process and record the sales success rates at each stage of the sales process.
I. Identify the steps within 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 probability of an excellent outcome at each step:
* Invitation to discuss 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 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 do the statistics mean? In case you are invited to fulfill using the prospect, there is a 2% chance of winning the contract at that point. If because first appointment the prospect launches a discussion about what would or might be needed when it comes to project work, you bump approximately an 8% probability of winning the contract. The dollar values let you know exactly how much the sales process is “worth” at each step that leads as much as signing the contract, if you can to do so.
If within the conversation, or in a follow-up conversation or email, there exists a discussion of project specifics, like its purpose, needs and benefits, as well as the talk centers round the suitability of your rohnfp and expertise for the job, then there is a 25% probability that you will be awarded the project. If you are 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 an additional reason to document your small business transactions so that reliable data is going to be there to steer your company planning.