Boer, Bore, Boar, Boor, Bored, Board, Bawd, Baud

Of all the sins a writer or speaker can commit, which is the worst?  Is it resolutely steering well clear of the subject indicated by the title or headline?  Is it being patronising, insulting, embarrassing, obscene, racist, or in some other way not politically correct? Is it communicating entirely in jargon, which might just as well be an obscure central Gondwanaland dialect for all you can understand?

Whilst I dislike to a greater or lesser degree being on the receiving end of any of these, I believe the biggest sin is that of being downright BORING!

Some research in the UK a few years ago showed that Engineering students had a higher boredom threshold than Psychology students.  Of course that wasn't the published conclusion, seeing that the research was carried out in the Psychology department of a leading British University!  What was claimed was that Psychology students "had a more highly developed social awareness"!  A highly measurable quantity, undoubtedly!

The actual 'yardstick' used in this research was to secretly observe the students and count how many times each one yawned!  People have earned PhDs for this sort of stuff, you know!

Maybe there's room to create a new international unit, the 'Winch', as a measure of boredom, equivalent to one unprovoked yawn per minute.  I say unprovoked because we all know yawning is highly contagious.

Do let me know your thoughts.

So, given that you might well end up writing for or speaking to, people who are more psychologist than engineer, how can you avoid being BORING?

Maybe you can adopt the principles I used when writing this piece.

• Know/consider your audience/readers.  The top tip is to make sure it comes across that you, the writer/speaker, care about the subject.  Think about what the subject really means to you.  If the answer is nothing, you may want to question whether or not to write the article or give the speech.



• The second tip is to ensure that you are writing or speaking this in the certain knowledge that the audience cares about the subject.  This is a simple extension of knowing your audience but knowing extends much further than simply knowing in which section of Yellow Pages they can be found!



• Ask the audience/readers a question, read them a quote, or tell them a story - whichever it is, be pertinent.  Engaging your audience in some way helps them to feel involved, which is a good way of minimising their boredom.  If you are giving a speech, it is a good relaxation technique for you.  After all, once you have handled the random answers they may give to your question, you can steer the talk back to where you want to be, confident that you now have a 'downhill ride' to the end.  And if it's not really the occasion for audience participation, even a rhetorical question can get them thinking, and so being less bored.



• Be creative - combine different media, or mix and match long paragraphs, short paragraphs, prose, speech, and bullet points - but don't get 'typeface diarrhoea'!  Change for change's sake is distracting and thus boring, but monotony is also boring!  Literally the word means single-tone, but common usage has invested it with far more of the 'boring' than its origin would suggest.



• Use 'white space' - pause, literally or metaphorically to let your words sink in.  You need to breathe as you speak, but people also need to 'breathe' as they read and listen.  Give them time for the mental 'action replay', so they can understand and follow you more readily.



• Think of the 'big picture' - You will be aiming to get the audience or readership to 'do' something, so make sure you lead up to it.  A 'lead in' without a 'call to action' is just as bad as the unexpected surprise of a call to action without a lead in.  In neither case will any action get taken!



• Use humour if it (the situation) is appropriate and if it (the humour) is appropriate.  Humour can be a valuable aid in making a strong point but don't 'recycle' the humour.  Tell your own stories from your own experience - They're harder to steal for a start! - Write and speak from the heart, and if the real you is humorous, this will come through.  No stand-up comic would ever say, "I've got this really great joke", so why should you.



• If you're actually giving a speech, be confident - Most young children are confident public speakers but then later something goes wrong!  One way back for adults is to practise.  Confidence comes from practise, not further study.



• Above all, be yourself!

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Recognising Buying Signals

In our society we're not very good at saying either, "Great!  I'd really like to buy this from you, NOW, PLEEEEEASE!" or, "It's probably OK but not for me!  I don't want it, I don't need it, I doubt if I ever will, and if I did I wouldn't buy it from you, certainly not on those terms!"

Unless of course, you're an Auctioneer, when people will either scratch their nose, pull their ear, wink, nod, wave their hand or a piece of paper, shout, even wave a numbered ping-pong bat at you.  Or else they'll keep still and quiet and do and say nothing.

You have to be 'tuned in', alert and looking out for the 'Buying Signals' that people use instead.  It is hugely important to spot and react appropriately to buying signals.  In fact it can be positively harmful to your business if you don't.

You should respond to a Buying Signal by making suggestions!  If the signal took the form of a question, answer it briefly, but move straight away into making suggestions.

These signals can be misinterpreted so you have to be careful.  The prospect may just be seeking clarification, but at least they are still 'playing ball' with you.  And you have to be aware of what it is they're signalling they're ready to buy!

You need to react immediately to Buying Signals.  These signals can and do go away as quickly as they appear.  If you don't change tack and respond to buying signals by making suggestions, and instead keep 'presenting', it's very likely that you'll talk yourself out of an order that was there for the taking.  Any information you give to a prospect after they've decided to buy from you begins to give them reasons to change their minds.

Then there are the 'Not-Buying Signals'.  You need to be even more alert for these as you don't want to waste your time chasing 'browsers'; you want to be chasing 'buyers' instead!  As you seek appointments or follow up enquiries, you need to sort out the buyers from the browsers, and then lavish your attention on the buyers.  You need easy wins, not hard fought victories (rare piece of military analogy!).

Let the very way in which you prospect help you weed out the non-buyers.  People look in trade directories because they need a tradesman, not to while away a rainy afternoon!  People who buy from suppliers of complementary services to your own need you to add value to their original purchase.  If you have a website and use pay-per-click advertising, choose keywords that are buying queries, not browsing queries!

Types of Buying Signal
Buying Signals can be verbal or non-verbal; they can be questions or they can be statements.  They might even be playing, "If .... then ...." with you.  The verbal signals fall into several categories.  In many cases they can be worded either way.  The most commonly met are the first two, but they are all important signals to be looked out for.

• Repeating a question that has already been fully answered, and generally acknowledging that it has been - "How much did you say it costs?" - Be aware that if it's said in shocked surprise and incredulity, it's a cue for more probing!


• Picturing themselves working with you - "I could see you on a Thursday" - "How often would we need to meet face to face?" - "We'll need to involve Janet"


• Asking for a sample that's not necessarily free - "Can I try it for a month and see if it works?" - "I'll need to see it in action"


• Making positive noises - "That sound really good" - "Who could say no to that?"


• Asking 'chicken' questions - "What will happen if it doesn't produce results?"


• Any statement or question about money - We don't need examples here.  Even if they say it's overpriced, to have got to the top of their priority stack, these comments or questions say they want to buy.


• Asking questions about details - "Which of my people will be directly involved?" - "What exactly will you be doing?"


• Any statement or question about timing - "When can we start?" - "It'll have to be next week" - "Can't we do it in four weeks instead of five?" - "I'm tied up until Thursday" - If this type of signal arrives as a question, you can legitimately avoid answering it by asking back, "When would be best for you?"


• Asking for your professional guidance or opinion - "What do you think would be best?" - "What would you do if you were me?"


• Asking a colleague who's in the room - "What do you think?" - They've decided but they just want confirmation that they're not being daft.


• Mentioning a negative experience with a previous supplier - "Everyone I've tried has been useless!" - These types of comment are actually cues for more probing


• Asking for references or for a personal contact with a satisfied client - Again no examples needed.  It's effectively a no-brainer!  Again they just want confirmation that they're not being daft.


• This leads us on to no-brainers of the 'sledgehammer' variety! - "What happens first/next?" - "Where do I sign?" - "We've looked at other suppliers and we like you best" - "Here's our Purchase Order" - Or they may start to negotiate - "Would you accept £4,000?"

Then there are the non-verbal signals

• Spending time concentrating on just one of your products


• Asking/looking for help


• Touching their wallet or its contents, or their chequebook - Literally or metaphorically


• Changes of body state - Relaxing, moving stance, gestures, skin tone, style of speech


• Getting out their pen - Literally or metaphorically

Types of Not-Buying Signal - Maybe it's time to move on

• Unwillingness to trade commitments - At least unwilling to make their own in return for yours


• Your calls, messages and e-mails go unanswered


• "I really like your suggestion but I need to ........ before we can go ahead"


• Avoiding eye contact when you meet


• "We'd really like you to help us but we just need a bit more time/have some other priorities to deal with first"


• 'Playing' with your product, or looking at many without ever concentrating on one


• Physically moving around a lot, quickly

So what should you do here?  There could be legitimate reasons outside your control, but largely there won't be.  We Brits are just hesitant about coming out with the truth!

You should confirm your interpretation - Ask further probing questions.  You can even ask, "Did we do something wrong?"  This can even be your voicemail, SMS or e-mail when earlier messages have gone unanswered.

Then either leave well alone or make some more enlightened suggestions.

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Why All Medallists Have Coaches

Like competing at sport, setting up and running your own business can be a great, but rewarding challenge.  But, when it comes to your business results, will you be glad just to have been selected to represent your country, or glad to have made it to the Olympic final, or is a medal the least you will be satisfied with?

If you were an athlete and not a business owner, how would you try to ensure that you at least won a medal?

It doesn't take much research to discover that all the great athletes were helped to achieve what they did by their coaches.  In fact Sir Steve, Sir Matthew, Dame Kelly, Dame Tanni, Sir Chris and the others simply couldn't have done it without their coaches.

Could the same be possible in business?  You bet it could!

Even the non-athletes among us know, I am sure, that sportsmen and women need to train for their event.  They need to incorporate a mixture of strength, fitness and stamina work, as well as skill, into their training regime.  How would they get on if they did this all themselves; unaided, unobserved and with no feedback?

I suspect that actually, at the highest level, they would make a pretty good fist of it for a few days, even weeks.  I am certain that self-motivation is no problem whatsoever for these elite stars.  Along the way they will have learned what mixture of exercises make up a top-class training programme, so they can plan their forthcoming schedule without assistance.  They will know what 'doing it right' feels like and be able to sense when they are starting to fall short of their best.  They will undoubtedly have the ability to 'shout at themselves' and not need the coach's voice in their ears.  But would they ever dream of dispensing with all coaching?  Would they ever!

Is the same true in business?  Do the Bannatynes, the Bransons, the Roddicks and the Sugars know how to plan and run a business, and make it hugely successful, without any outside help.  Of course they do, or did in the case of the late Dame Anita.  Does this mean business and sport are different?

In spite of this evidence, I actually believe they aren't that different.  I have talked about top class athletes and top flight entrepreneurs, but how did they get to the top in the first place?

If your school days were anything like mine, whatever your sporting achievements, until you were maybe ten years old you were unlikely to have had much input from a teacher, except to explain the rules of the game.  You probably didn't train either; you just 'played'.

But from then on, it is highly likely that someone was advising you on how you might do better.  And maybe around this time your world polarised into those who enjoyed and were good at sport, and those who'd rather do any anything else but games and PE.  The good got better and progressed through club and county level to become the international representatives we discussed earlier.

I think this model is exactly duplicated in business, in the early stages of this part of a business owner's career.  To start with some people just play at it, copying what the others do and discovering whether it really is as enjoyable as they thought it might be.  But then what?

Can the ones who find excitement and enjoyment in running their own business get better and bigger on their own?  My own research amongst Business Advisers is that the ones who make the biggest strides forward are the ones who have taken the decision to employ the services of a professional business coach.

Returning finally to the elite sporting personalities we looked at earlier, I said they could not have achieved what they did without the help of their coaches.  What I am equally sure is that the coaches could not have gone out there and won Olympic medals themselves, at least not at the time they were coaching their protégés to do so, even if they had been top performers themselves in the past.

So don't necessarily expect your business coach to be a better entrepreneur than you are trying to be.  It may just be that their skill is in helping others to succeed.  This skill might just be knowing all of the questions, and not necessarily knowing all of the answers.  Just like the sports coach, all they can really do is help their clients help themselves, and at this they are supremely skilful.

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The Most Important Thing To Get Right

I am sometimes asked what is the one most important thing to get right in Sales and Marketing.  Is it my logo, my website, my brochure?  Is it my database, my networking, my web presence?  Is it my negotiation skills, my contact management system, my objection handling?

In my experience, the one thing that stands out above all others - and this view is being continually reinforced - the one thing upon which all the others are built, is this:

You absolutely must be able to articulate clearly and succinctly what you do, who you do it for, and the good they get from it.

This is sometimes called an Elevator Pitch, and is often done poorly.  But really it is easy to do it well.

Other people must be able to recognise one of your ideal customers, either someone they know or maybe even themselves.  If you can't or don't provide them with a definition against which to make this judgement, how can you ever expect them to find anyone for you?  And you must be as specific as you can.  How can we pick just one or two if you say you do anything for anybody and you're diversifying?

You need to define your ideal customer in terms that require little or no initial interaction.  What I mean is, if you say your ideal customers are 'worried about their cash flow', I doubt anyone would discover this without talking to them.  Whilst this knowledge is important, and I will return to the thought in a moment, you need to communicate 'search criteria' that rely on information in the public domain.  So, working with 'accountancy practices of up to thirty partners', would fit the bill nicely.

Not all of your ideal customers will need your products or services every day of every year so, having identified examples of your ideal customer, these 'prospect seekers' need to be able to then recognise which have the sort of problem that you are an expert at fixing.  However, as in medicine, we often only see the symptoms and have to explore to identify the underlying disease.

You need to provide your prospectors with examples of the sorts of symptoms which, amongst your ideal customers, often point to problems you can fix.  At this stage they can start to suggest that they know someone who could relieve these symptoms by fixing the problem that's causing them.

Because you have given them examples, the prospectors are able to suggest that no longer suffering the pain that the problem is causing would be of considerable value.

Then, when they say to a contact of theirs, "You really need to talk to my friend John or Jenny about this; I'll get them to call you," you know you will be getting a high quality referral.

Knowing your ideal customers, the problems they are likely to be having, the pains they will suffering because of these problems, the comfort and value that will result from no longer having to endure these pains, and why yours is the best method (in the circumstances) for addressing the problem, you can start to construct your Elevator Pitch.

I should add here that this information is not only vital for preparing your response to "What do you do?"  It is the basis of all of your branding messages, however they are communicated.

I believe you actually need several elevator pitches: 60 seconds, 30 seconds, 1 breath, 1 word or phrase - all have their place.  And for the longer ones you may well need different versions depending on whether you are training your surrogate sales team - networking - or actually talking to a prospect - selling - yourself.

Practically you'll have to start long, then distil and refine.  You just won't get it right starting short and trying to expand.  You'll need to test and measure to see if your messages are coming across, and being received and understood.

One possible template for a longer elevator pitch is:

I work with (ideal customers) who (widely held problem) which means that (widely suffered pain).  I help them (pain relief) so that they (life without pain).

An alternative opening might be:

You know how (ideal customers) are always (widely held problem) which means that ......

Both are much better than:

I'm a (what it says on your business card)

Good luck!


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Determining Value-Based Fees for Software Projects - Part 4

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A couple of weeks later, Mark was really finding his feet with value-based pricing and sent me details of a conversation he'd had with a COO he'd formerly worked for.  Mark mentioned that he considered this person as a mentor, and that he values his feedback very much.  Mark was curious to discover my 'pricing-by-value' view on the responses he'd received.  Mark's words are in black, the COO's in red and mine are in blue.

1) Isn't the goal to get directly to the economic decision maker, and not some purchasing manager, HR rep, or other intermediary?

[the goal is to provide a Value Added Service, which results in a fee paid.... but you do not get to the VAS nor the fee unless you "work" the decision maker]

{Not sure that he's disagreeing with you here.  The ultimate goal is to provide VALUE, and get paid a profitable fee for doing so.  And the route to this goal is via Alan Weiss's "Economic Decision Maker".

I'm becoming more and more sceptical though about the idea of "value added" anything.  This just sounds to me too much like the deliverer can say what's of value, which of course they can't.  Only the recipient can decide if the offering is of value, to them, at this time.}

I tend to think of fairness letters as applicable to securities and commodities, not professional services.

[Fairness letters ARE used in financial transactions but it is an example of a consulting endeavor that is a gate to moving forward.....Environmental Consultants hold Clients hostage sometimes due to the fact that you cannot proceed without their consent.   Another example is certification groups (ISO 9000) that requires the use of a Consultant whether you are already doing it yourself or not.]

{I'm not really clear what a "Fairness Letter" is.  Wikipedia has no definition!  Elsewhere I find "A letter or opinion prepared by a financial advisor, pricing advisor or similarly qualified person opining on the fairness of the price paid".

In that case I would agree with you.  In the provision of professional services, if the Economic Decision Maker does not have the wit to be able to determine for themselves that the price is fair, they should not be in their position.  Businesses cannot afford the luxury of going to an outside, so-called expert, for their opinion on every price quoted.  The whole of commerce would break down!

I wonder why it's needed in securities and commodities either!  Is it not just a case of widespread CYA? - If you're not familiar with this abbreviation, it stands for "Cover Your Ass"!!}

If you're providing value to the Client, then why shouldn't you be compensated based on the Client's perception of the value of your contribution and not your time, regardless of some third party's notion of "fairness"?

[actually, typically the fee is directly proportional to the value..... 1) my fee is say $250/hr... the value someone receives from 1 hour of my time is worth 2.5 times the Consultant who is getting 100/hr....or I hope it is.... 2) Some Consultants (including me, which I did at *******) get equity along with their fee.   Lower fee for a piece of the action.  Others charge a fee as a percent of increase profit, turns, revenue, cost reductions, etc.   Fees do not have to be hourly.... in coding sometimes we used fixed price for components as an example]

{This guy should win prizes for shooting himself in the foot!  His fee is "directly proportional to value" yet is based on $250 per hour?  Not only that, he maintains he is 2½ times as valuable as someone else who charges $100 per hour?  And then "or I hope it is"?!!!!!  I rest my case.  The guy doesn't understand the first thing about value-based billing, and this illustrates it perfectly!

Receiving equity or a percentage is a recipe for payment not for, but after the results.  This means it is in the Consultant's interest to have a control on things until the equity or percentage is delivered.  This is either an ongoing project or a retainer environment.  In either case it needs to be charged for, so the original - not "lower" fee should prevail.  The Consultant should be telling the Client, "My fee is x, but if you want me to take equity or a percentage of the results, I'll be charging you extra for the privilege!}

2) The only one a Consultant should be worrying about staying in favor with is the economic buyer of his services - the one who can sign the check - no?

[You have to be careful with that one.... its a good idea to have exposure above your contact as you could find out that he is out of favor and my endorsing his idea you may be limiting your future in the account....... Like me with ********.... I was hired by him, but I had to tell *** and **** that ******** was the problem.]

{I think I'm with the COO on this.  The Economic Decision Maker might be your prime contact but you need to cultivate other relationships too.}

Expanding your role is about providing continually increasing value to the Client, not just showing up and assuming authority.  I am not sure that's what you were implying though.

[1) agree with expanding value creates expanded engagements...2) most Consultants actually shy away from "assuming authority" as it can run aftront(sic) of the employees and then you cannot take the "successes are mine and failures are yours" approach....ie... it either works, and if it doesnt' they did not implement it in the way you had recommended. 3) many Consultants I have worked with on the management side are all about increasing THEIR billing.. and focus too much on that.]

{As I said previously, I don't think you can provide value.  I think you can do things and achieve things which are valuable.  So, via subtleties of English, I think you will expand your role by demonstrating your capability to provide what is perceived to be valuable, and helping the Client to understand more of what will be of value to them and their business.  This certainly does not stem from merely "turning up".

I don't think "assuming authority" will work.  Even if the Client is timid, non-assertive, and lacking business acumen, will you not achieve greater buy-in (and become more irreplaceable) by allowing the world to see that the Client had a large, if not the greater share in making these achievements happen?

Who would want to take a "successes are mine and failures are yours" approach?  Again I feel a "successes are yours; failures are ours to both take responsibility for and to learn from" is a better policy.  If the ideas were not implemented correctly, this HAS to be the Consultant's fault!  I am confused with the COO's stance on his last point here.  Does he mean "billing" as the "lights on Broadway" type of billing or as the ability to invoice for fees?  Never mind, in either case I would contend that those Consultants should get educated about what delivering value and pricing accordingly means.}

3) I think of this as a self-esteem issue - I certainly suffer from this!

[Most Consultants are over confident and have a high degree of self worth....how else could you charge someone for telling them (many times) what they already know.......]   You have to be confidant stepping up to the plate.... even when you have to go research for the answers, but you exhibit integrity and confidence.... I think you would do well at this....]

{Let's assume that this naïve viewpoint is the COO's generalisation on all the poorly behaving Consultants.

My take is this.  1/. You have to be confident in your own abilities, and have sufficient integrity to admit when you don't know.  2/. It would be gross arrogance if you never doubted your own abilities.  3/. I believe every Consultant goes the through "Oh, my God.  I've got the assignment.  What shall I do?" moments.  4/. If the Client already knows something, telling them again isn't of value, so you shouldn't charge for it.  5/. Building a network of associates and strategic alliance partners helps.  Having the ability to say truthfully, "I don't know, but I know a man who will know" is a great comfort.  And leading on from this, the ability to say "Let's see what is the most pressing issue you face and then find an expert to work with you on that" is great too.  Knowing you can never unearth a problem you can't help the Client solve is a hugely comfortable place to be!}

Not sure I can relate to your case in point - perhaps if some CEO hired you to concoct some pleasant looking findings to satisfy his board of directors...not exactly ethical and not really the kind of work I'd want.

[Its all shades of grey..... only machine language is binary.... there will be times in management consulting where you have to work within the system to satisfy the parties even if you think a different method/tack would be better, but it might be to upsetting to the organization.... ]

{I agree with you Mark.  As soon as this becomes apparent, grab whatever fees you can, walk away and explain why you're never coming back.  Working this way even once will so stain your reputation you may never get rid of it.}

4) I don't think it's possible to be a very successful Consultant and have low self-esteem.  The potential Client will see it coming a mile away and will never trust you.  I myself am a natural introvert and often confuse self-esteem with arrogance...something I'm working on.

[Agree..... Humble confidence.... not arrogance and never lead with your chin...   You will be fine at this.... always listen and show patience...not necessarily my strong suit, but I learned.]

{I concur with the COO here.  Two things about confidence.  Firstly confidence comes with practise, not contemplation.  Get out there, try it, and learn from the experience.  Why do actors rehearse?  So it becomes second nature.  The ancient Greeks didn't think this way, at least not with the sciences.  They abhorred experiment.  For them contemplation and not observation could solve everything, and look where that left us.  Up to the time of Copernicus to get rid of a geo-centric universe!

Secondly, lack of confidence can often come from the little voice in your head, telling you either that you can't do it or what will go wrong, or what will happen when it does go wrong.  And it's hard to displace these "Mother Hens".  It's often easier to substitute rather than eliminate.  For example, I had one Client who was hesitant about everything.  We got it down to her parents warning her not to stand out from the crowd, and she couldn't get rid of this.  After I suggested replacing it with the thought that no-one would ever come to her shop unless she was different, she instantly was able to move forward.}

5) This comes from using a time-based billing model from accounting.  Many lawyers have abandoned the time-based billing in favor for value-based fees (i.e. contingency).  If you consider yourself a commodity offering, you will ultimately negotiate on an hourly fee, which becomes a race to the bottom and a lose-lose for both Client and Consultant.  You can certainly negotiate the fee - just negotiate the level of value proposed and have the Client choose Option 1, 2, or 3...a choice of "yeses" as Alan Weiss would say!

[actually more consulting is done on a T&M basis than on a structured fee..... Fixed Price for fixed work or results are hard from a contractual  standpoint.  Yes lawyers do it, but usually only after they have a certain book of business to support their operation.   As stated I do some things where I get a ½ to 1 percent fee on top of my hourly.  I also always work against an estimate (e.g. I think this will take about 80 hours) but in my line of work they are always adding and changing the scope... SOW's Statement of Work ie SCOPE is important in all assignments BUT, if you go the Fixed route they are tantamount.

Oh and if they want to hire someone for less... then OK... it's the same with the furniture I build..... you can find one for less, but it won't be the same......You don't really compete down to a lower common denominator........ that is not who you want to work for......]

{Even if more work is done as T&M, this doesn't make it better!  Why is "Fixed Price for fixed work or results" hard contractually?  You can define the scope of the project, the metrics which will allow anyone to say whether or not the goals have been achieved, the elapsed time and the fee.  What more do you need in order to draft a contract?

What does "only after they have a certain book of business to support their operation" mean?  Does it mean they build up enough experience to know what to charge every time?  Or does it mean they have built up enough cash reserves that if they lose money, they can ride it?  If the former, this is not value based at all!  It's one size fits all!  And they could be perpetually undercharging!

And if the latter, they are not worthy of the name 'businessman' if they continually trade at a loss!

I agree with the COO's idea of estimating his costs, but he doesn't 'cost' at the same rate as he 'charges'.  In implementing Value Based billing you need to know your walk-away point, but a gut feel is accurate enough.

"in my line of work they are always adding and changing the scope" just says the COO is not being tough enough in preventing 'scope creep'.  On a fixed scope, fixed fee project, if the changes are within the agreed scope, they get done.  If they aren't, that's a new, chargeable project.  The choice for the Client is then whether to call a temporary halt to the current project whilst the second is completed, or to continue with the original project until it is finished and then embark on the new one.

I believe the COO is correct in his assertion that only he can do what he does, in the way that he does it.  The Client may well try once to turn you into a commodity so they can enter you into a price-war.  Don't allow them to.  Remind them of your uniquenesses.  Why me?  Why now?  Why this way?

And finally, if it doesn't look a bargain investment to the Client and a hugely profitable reward for you, walk away!  No-one, not even a start-up can be that hard up for business that they'd sell their soul to the devil!}

Still more to come!

Determining Value-Based Fees for Software Projects - Part 3

Register now for my September 29th 'Pricing By Value' Workshop. Backed by my Money-Back guarantee.

Mark Richman, who is just starting out as a ‘one-man show’ Software Consultant, followed up my last points with some more of his own.

"Now, all I need is a few prospects on whom to practice! But I'm sure «how do I find clients?» is a huge component of your workshop, so I do not presume to receive such a detailed response to that one.

"It is quite obvious to me now that I have been trying to sell not only what I do, but very specifically how I do it (right down to promoting my toolset of choice). I should probably be focusing more, if not entirely, on what I do to improve the client's condition. For example, «improving small businesses through technology» or some such tag line."

I replied:

"I'm sure «how do I find clients?» is a huge component of your workshop"

"Actually, if I'm understanding you correctly to mean «how do I get enquiries and turn them into appointments and thus opportunities to get new clients» then no, it isn't a component at all! The 'Pricing By Value' Workshop only covers how to turn appointments into clients!

"Getting enquiries and turning enquiries into appointments are two other workshops which I've run a few times but never had videoed. There's a bit of information on these subjects on my website and you could always decide to become one of my Coaching and Mentoring clients to find out more.

"Just to add a brief amount more for you, the key to both of these is the ability to articulate what you do, who you do it for, the pains people who need you are suffering, and how fantastic life is for them when you've fixed their problem. This is also known as an elevator pitch! (Trying to anglicise this to «lift pitch» just doesn't seem right!). I’ve written a sheet on this subject which you may find useful."

"trying to sell not only what I do, but very specifically how I do it ... should probably be focusing more on what I do to improve the client's condition"

"I'm so glad you realise this! You are the expert. That's why the client's called you in. They don't care how you do it, just fix it! Does the heart surgeon have to describe his procedures in detail in order to get asked to perform a triple by-pass?"

"improving small businesses through technology"

"You need to be communicating what I call 'Value Outcomes' and this is a poor example of one! In my blog, last January, I wrote my analysis of value outcomes - the good and the bad"

Mark was back the next day:

"Having an online discussion with a colleague of mine. He says «Value-based billing doesn't produce quality either. Consultants are encouraged to do barely enough to meet the spec, and anything else gets the response of, ¿Sorry, that's not in the spec, and we'll have to go through another round of estimation before we can even think about what to charge for that? If you stick with hourly, you can adjust the spec faster and be more flexible with the client.»

"I can see some value in his claim. Anyone who's worked on a software project knows that change is inevitable. How do value-based fees deal with change without requiring everything to be knowable up front?"

Again I was able to pass my ideas on to Mark.

"Value-based billing doesn't produce quality either"

"I agree! Merely trying to introduce a culture of Value-Based Billing doesn't create quality. And besides, behaviour creates culture, not the other way around!

"It's the way that Value-Based Billing is incorporated into the Sales Conversation and into the relationship that ensures quality, whatever that may mean in each individual case.

"If you believe you are being abundantly rewarded for your efforts, you'll go that extra mile to please your client. You'll have an incentive to get better at your job, you'll be acting in yours and the client's best interests, and you'll be lining up the next project and the referrals too."

"Consultants are encouraged to do barely enough to meet the spec"

"Encouraged by whom? The client sees you're an expert amongst experts and that he's getting phenomenal value for his bargain investment, so he won't encourage it! And you, the Consultant, are getting hugely rewarded, so why do you feel a need to cut effort and 'quality' to the bare minimum?

"Does the person who asked you the question equate 'value-based billing' with 'bargain basement prices'? If they do then I can see why they think this way. But they need educating into the true meaning of the term. Value-based pricing means Win-Win. And Win-Win means huge value return for bargain investment, coupled with hugely profitable reward. Both can and do co-exist if you use these methods.

"Unfortunately the expression 'value pricing' has been hijacked by the 'cheap and cheerful' brigade, so you need to make sure your meaning is correctly understood when you talk about Pricing By Value and Value-Based Pricing/Billing."

"anything else gets the response of, «Sorry, that's not in the spec, and we'll have to go through another round of estimation before we can even think about what to charge for that.»"

"Yes! The original project needs specifying, and anything that arises later that's not within the spec should be discussed separately as a potential additional chargeable project.

"Having said that, you shouldn't be discussing highly detailed first projects! As I said to you before, the first thing you suggest might be a research project to develop the detailed spec of the first coding project. You deserve to be paid for this initial investigation, and why not! If the client has already completed this exercise internally or with another consultant, won't you in any case want to check their work to date before you commit to what you'll do? When you fly your aircraft, do you give it an external visual inspection before you start the engine? I'm not a pilot but I bet you do. Commercial pilots certainly do it, every time!

"And of course you need to know about the new problem and the new circumstances before you can start to price the new project. This needs to be completed but, if it's closely related to the existing project, this needn't take a very long time."

"If you stick with hourly, you can adjust the spec faster and be more flexible with the client."

"Faster than what? More flexible than what? When you've won a few projects on a value-based basis you'll be adept at doing all that needs to be done very rapidly.

"In my Workshop I stress that you need to be able to handle the figures in your head, so they have to be simple. In fact I advocate (as does Alan Weiss) that you get to the point of doing it by gut feel and not computation. If you need to 'go away and work out the figures', or even use your calculator on the spot, you are screaming 'cost-based and time-based billing', so this would be a shot in the foot!

"As for flexibility, you will know more than most people about all the circumstances surrounding the client's problem. Presented with a new requirement, your judgement of what is and isn't feasible and sensible will be considerable. Without this insight you'll just be reacting with knee-jerks, even if you charge for them. This would be sticking band-aids over symptoms, not addressing underlying diseases! What long-term use is it giving an aspirin to a brain tumour sufferer?"

"Anyone who's worked on a software project knows that change is inevitable"

"True! As you and the client understand more about the problem and its solution, some ideas will be jettisoned and replaced. What's new?

"If the scope of the project is to reach the end result, and not about the means to that end, it's all still within the scope of the project. And if you're being paid five times what your hourly-based fee would have been, what do you care if it extends a little? You just don't want to allow it to extend ad infinitum, aka scope creep."

"How do value-based fees deal with change without requiring everything to be knowable up front?"

"The real interesting one! And I think I've already answered it! If extreme knowledge is needed to price the final project, you need introductory project(s) to discover that extreme knowledge. These can be priced from the knowledge available at the outset.

"Don't keep thinking in terms of one huge project! Some of the more complex projects need several stages. As Alan Weiss says when he's suggesting giving the client options, un-bundle your catch-all solution and re-bundle the components into different 'value packages'. Again, on my Workshop, we look at the question of «How will I be able to think of several 'value packages'?»

"I've not tried this next approach myself, but it strikes me that if the client is looking for a bid on an enormous project, you could suggest that they break it down into a series of slightly smaller ones. If you're worried about not getting the follow-on work, who else has a better relationship and is better placed to get it? I'd suggest the follow-on work is yours to lose!"

And there’s still more.

Determining Value-Based Fees for Software Projects - Part 2

Register now for my 'Pricing By Value' Workshop in Cambridge, England on September 29th.

The mystery correspondent was of course Florida-based Mark Richman of http://www.empiresoftware.net/

Mark went on to ask me:-

"While I understand the concept behind value-based fees, I'm still trying to wrap my head around how to apply them to what I consider highly commoditized services. That is not to say I devalue my own worth, but I do recognize that there is an upper bound to what someone is willing to pay for a service, regardless of ROI - price elasticity of demand.

"At what point am I delivering a valuable service, expertise, information, guidance, and coaching, and at what point am I simply laboring to produce a relatively undifferentiated good (i.e. a presentation website)? I tend to think I do much more of the latter, unfortunately. Certainly, I can rattle off a unique value proposition to a prospect, but many will have shopped around before they talk to me and already have an expectation of what they will pay.

"This brings me to my next hurdle. Assuming I have somehow navigated past the prospect's early push to hear a price quoted, I find that I get nervous asking for more money than I think is "fair" (whatever that means). Is it a lack of self esteem, or a sense of ethics run amok?"

I cover all of the dozen or so points he raised in my Workshop (and more!), so again, I replied to him in detail, tackling his points one at a time.

"what I consider highly commoditized services"

"It really doesn't matter what you consider! The client's perception is the only thing that counts!

"You are unique and provide a unique service, so it is only by your own lack of 'Sales Conversation' skill that a client could be allowed to retain that impression of "highly commoditized". If they do retain it, this just means you haven't done your selling job well enough!"

"not to say I devalue my own worth"

"It's not yours to devalue (although you could blow it completely!), and it's not your worth that matters! It's the client's perception of the worth of having their problem fixed that matters, coupled with your personal value to the client. This is where the 'Value Conversation' needs to be heading. As I said previously this can take quite a large chunk of your sales conversation, and mustn't be truncated."

"there is an upper bound to what someone is willing to pay for a service, regardless of ROI"

"There is an upper bound, but based almost exclusively on ROI! Having enabled the client to articulate for themselves the true value of having their problem fixed, your fee will be seen as an investment on which they expect that return.

"A ROI of 20 to 1 sounds mightily attractive! 10 to 1 is still pretty good. Many consultants say they'll make a client at least three times their fee, but I think this is not desperately attractive. Less than 3 to 1 is certainly not a brilliant investment, even though it does make money. We are trying here to get a reaction of "That's a bargain!", so go for a high ROI."

"price elasticity of demand"

"Re-read Alan Weiss's Value-Based Fees - particularly the 'Supply-and-demand illogic' section of chapter 2 (in my edition) on ''The lunacy of time-and-materials models'. Alan explains brilliantly why the economists' theories that apply to commodity markets don't apply to non-commodity markets such as you providing your services. "

"At what point am I delivering a valuable service etc"

"Easy! When the client believes you are!"

or "laboring to produce a relatively undifferentiated good"

"Easy again. Only when you allow them to think this way!"

"I tend to think I do much more of the latter"

"At the risk of sounding repetitive, it's not about what you think! It's about what the client perceives and believes."

"I can rattle off a unique value proposition to a prospect"

"Do I sound like Elvis Presley continually saying "one more time" to the band? The client is the one who determines value! You have to allow the client sufficient time to reach this conclusion (generally with your guidance via your questions, but certainly not putting words into their mouth) for themselves, so 'rattling off' is almost by definition not going to work. And your proposition comes almost at the end of the sales conversation - it's where that entire conversation has been heading all along - it's not even at the end of the value conversation. Re-read the rest of 'Value-Based Fees'!"

"already have an expectation of what they will pay"

"This is natural, but will be based on their perceived remedy to their perceived pain, turned into a commodity, and put out for the world to bid the lowest price for! If you hear "that's too expensive" this really translates as "I haven't understood enough of the value of having my problem fixed in this way to see this as a bargain investment in order to achieve that return."

"You need to get them to understand for themselves what is their fundamental problem; their 'underlying disease' that is causing the 'symptoms' or pains that they are experiencing. Once they understand, they can articulate it to themselves, and then to you, and then you can understand also!
A useful question is "What keeps you awake at nights?" I doubt the answer is lack of a website! Lack of profitable sales, maybe! You have to ask other value seeking questions first though."

"somehow navigated past the prospect's early push to hear a price quoted"

"Well done for identifying this one. Client questions about your daily rate are designed (even if subconsciously on the client's behalf) to identify you as a supplier of commodities, and thus be suitable material for forcing into a price war.

"There is only one way to get rid of the daily rate question and that is to say "I don't have one!" And mean it! If you're not charging for your time, why do you even need one in your head?

"It would be wrong to leave your answer there however. You need to continue along the lines of "I'm quite prepared to quote my fee, at the appropriate time, later, but at the moment I don't know enough about your issues to do so. Please can we start/return to talking about the problems that are bugging you right now?"

"I get nervous asking for more money than I think is "fair" (whatever that means)"

"Firstly you have to accept that backing winners at odds of 10 to 1, even 20 to 1, is more than 'fair'! Secondly, everyone gets nervous when they see how they've been undercharging in the past. [They've also been under-delighting, which is why they've been under-charging!]

"I know I was no exception, particularly in moving from "I'll invoice you at the end of the project" to "My standard terms are 50% before I start and 50% after four weeks". Stating that my fee was five or ten thousand pounds instead of the two thousand I would have asked previously was less of an issue for me, but all of us have different types of nervousness."

"Is it a lack of self esteem, or a sense of ethics run amok"

"Almost certainly it's a lack of self confidence! The good news is there are simple techniques for gaining confidence at this.

"As we've implied already, the toughest sell is to yourself. One technique that works for many people is to think of the highest fee you've ever been able to charge, multiply it by five, and then look in the mirror and tell the face you see there "My fee is x thousand dollars". Keep doing this until you can do it with a perfectly straight face and no hint of embarrassment.

"Confidence comes from practise, not further contemplation. If you can say it to yourself, you'll be fine in front of clients. And it gets easier every time.

"Do the value-based thing properly and effectively you're telling the client 'I know a horse that is absolutely guaranteed to win, but you can still place your bet at odds of 20 to 1.'"

I concluded by asking Mark, what is there to be embarrassed about in that?

More to come soon ...

Determining Value-Based Fees for Software Projects

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A couple of days ago I noticed someone talking on Twitter about "Determining Value-Based Fees for Software Projects"

Specifically they said:-

"While I generally agree that Value-Based Fees (a la Alan Weiss) are the best way to charge and get what you're worth as a consultant, I don't know how well this approach translates to the software development domain.

"How do you determine value to the client without spending inordinate time performing
requirements discovery and analysis? How do you manage change requests in a Value-Based fees approach?"

This made the person concerned very interesting to me, so I posted a reply:-

"Software development is one of the key areas to be adopting a Value-Based Pricing approach -as you indicate following the Alan Weiss/Ron Baker et al model.

"I think you've almost answered your own question here. You DO need to discover a lot of information before you can suggest a Value Based fee but not, I would argue, specifically to do with requirements, and not in a time consuming manner.

"There are efficient ways of finding out as much as possible about the client's PROBLEM and the circumstances surrounding it. Then you can go through the remaining stages of the 'Sales Conversation' and present your options (see A Weiss) and then the associated fees - all in the space of say an hour or two.

"I'm guessing that your 'value (to the client - not the price tag) package' options might all start with a research project to work with the client to discover and agree the detailed requirements of a software solution to the problem.

"Having agreed (in writing) with the client the scope of the 'value package' they have selected and your FIXED fee, any 'Change Requests' can be simply dealt with.

"If it's within the scope of the project, it gets done for no additional fee! If it isn't, then this is a separate chargeable project! You will be asking the client if they would like
you to stop work on the current project while you complete the new one, or whether they'd like you to finish the current one first. As Jonathan Stark (another Value Based Pricing disciple, from the software world) points out, you can only run one project with any one client at any one time!"

This elicited further questions from the original author:-

"Using the Value-Based approach, how does one deal with the "we're a startup, we can't afford that!" response to a proposal? Often I am asked to design/develop websites for clients, which in my opinion is pretty much commoditized at this point. While the value to the client could be extraordinary, the fact that there is limited price elasticity here is working against me. How do I value-price something that can be had at similar quality for a fraction of the cost?"

Once more I replied:-

"I'd question 'similar quality'! You are unique! Only you can deliver your project! I work with a web design colleague and we recently talked to a one-man-band about his first website. We didn't ask his budget but I'd guess a few hundred pounds. After the full 'Value Conversation' based 'Sales Conversation' (which took us about 1½ hours) he agreed to a £4,000 fixed fee for an e-commerce site. Having seen what it would mean to him to have a website that sells, he found a way of getting the money to invest in the enormous return, and paid 50% up front a fortnight later!"

The understandable response came back:-

"How did you convince him to cough up the equivalent of US$8,000 when he could have easily gone with any number of hosted solutions for under $100/month? I suspect the value conversation took 15 minutes and the sales conversation took the rest?"

My response was to say:-

"The Value Conversation is one of four 'Conversations' that make up the Sales Conversation, and mostly takes longest of the four. The skill is in helping the client understand for themselves the value of having the problem fixed. In this case we'll help him achieve increased gross profits of over £100,000 per year with the new site . There will be additional (chargeable) work involved in driving sufficient traffic to the site, but even so he's backing a winner at odds of better than 10 to 1!"

To be continued

It's The Way I Tell 'Em

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Sometimes the way we express ideas uses analogies that are deep rooted, but whose day has been and gone. We need to move on in our speaking and writing and let go of the old ways when they are no longer relevant.

I wonder how many readers have won an order this month? How many have launched a new Sales and Marketing campaign during the last quarter? How many joined forces with a strategic alliance partner to blow away the competition and capture some business last year?

If, as I believe, Sales and Marketing is about long term relationships and both parties gaining the maximum possible, why do we persist with military analogies? War is a win-lose process leading ideally to the early death of the losing combatant, so why do we use their language?

There is a better alternative!

Let me ask you to imagine a visit to your doctor. If, as you are about to sit down in the Consulting Room, you are aware that the doctor has already decided what treatment to prescribe for your condition, do you think you would trust their medical judgement? Of course not!

But isn't that how sales used to work? You knew what you had to sell and you jolly well went out there and sold it! And the best salespeople were known to be able to sell sand to the Arabs and snow to the Eskimos!

Actually the conversation with the doctor may well run like this:- "What seems to be the matter?"; "Where does it hurt?"; "What does the pain feel like?"; "Where else does it hurt?"; "Does it hurt when I apply pressure here?"; "Can I take your temperature and blood pressure?"

What the doctor is doing, and we find it quite natural for them to do this, is understanding the problem. They are asking probing questions, then keeping quiet and listening to the answers, in order to gain understanding. This ties in exactly with one of the best one-liners I know in Sales and Marketing: "Talk less, sell more!"

I'm presuming that everyone has heard of 'open' and 'closed' questions; that 'open' questions - the ones that start with Who, Why, When, Where, What or How - are allegedly better than 'closed' questions - to which you could answer Yes or No - when information gathering.

Notice that our imaginary doctor does not exclusively use open questions! Open and closed questions don't matter! I can ask you an open question and get a one-word answer.

What colour car do you drive?

Or I can ask a closed question and get a lengthy diatribe.

Are Gordon Brown and Alistair Darling handling the current economic situation in the best way possible?

What matters are questions that produce open answers!

Meanwhile, back in the Consulting Room, the doctor hasn't finished yet. The conversation continues: "When did it start?"; "Does it hurt all the time?"; "Does anything seem to set the pain off?"; "What have you tried already?"; "Have you found anything that works?"; "What seems to make the pain stop?"; "Do you drive or operate machinery for a living?"

The doctor is now seeking to understand the circumstances in which the problem exists. At the end of this they will have a very good grasp of what is wrong with us, and what treatment to prescribe. And if they don't, they will have the professional integrity to admit it and in that case probably say, "I'm not 100% sure about this. I'd like to send you to the hospital for some more tests and to see the Consultant."

And during this process the doctor will have been checking back with the patient to make sure he has understood correctly what they have said.

The Sales process should be exactly the same. Understand the problem and understand the circumstances, and only then prescribe (suggest) the remedy, or refer the prospect to someone better placed to help.

Be aware that you have to really concentrate on staying focussed on the circumstances. It is so easy to slip back into the detail of the problem. And don't worry about forgetting to understand the detail. As I just said, you will naturally slip back from circumstances into detail without really having to try!

The Death Of Time-Based Billing

Please consider this.

Far too many businesses operate a policy of 'cost-led pricing', whether this is the cost of materials or the notional cost of their time. This is the accountancy view and is held to be mainstream, and it pervades thinking at all levels of most businesses. The alternative, economists' view of 'price-led costing' is thought to be heresy.

Value-based pricing theories are largely ignored by Business Schools and MBA courses! But the only thing any business can charge for is the derived value as perceived by the customer, so why persist with ego-centric pricing policies?

It is perfectly ethical to charge different customers different prices for different value received.

Customers who are charged according to value received are highly delighted customers. Customers who are quoted and charged a fixed price are highly delighted customers. Customers who are charged according to value are high paying customers! Prospects who are quoted according to value are highly likely to become customers.

But you need to address more than just your pricing. You need to conduct a 'value conversation'; you need to ensure your prospects understand fully what purchasing from you involves; you need to make your proposal around value based pricing; and you need to gain the prospect's agreement to your suggestions. In short, you need to address the entire 'sales conversation', but it all starts with establishing the value to the customer of the results of their purchase. It has absolutely nothing whatever to do with your raw material costs, hours 'worked', overheads, lifestyle ambitions or accounting practices!

Win-win means just that! It means that the customer believes they are getting high value for a very reasonable investment, and the supplier believes they are being well rewarded for whatever they are supplying. If either belief is missing, the result is not win-win.

I presume you would like most of your sales conversations to end with "That's a bargain! How soon can you deliver?" whilst at the same time earning a highly profitable price/fee. Value based pricing or pricing by value, call it what you will, is the technique that will enable you to achieve this sort of win-win outcome.

David

Learn more about these techniques and how to apply them in your business by booking your place on my 'Pricing By Value' Workshop which runs in Cambridge on July 7th

Why Bother Going To Networking Meetings

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Why do you bother going to networking meetings? Why do you

• Get up before dawn?
• Have a shower before the central heating's come on?
• Drive several miles in the cold, dark and rain?
• Consume rather more caffeine and cholesterol than you ought to?

So what's your answer? While you're thinking about it, let me tell you mine. I go to networking meetings for four key reasons:

• To meet strangers
• To recruit and train my surrogate sales team
• To be recruited and trained by other people into their surrogate sales teams
• To enjoy myself, and help others do the same

I hope your reasons and objectives are along approximately similar lines. How can you best go about achieving them?

1. Meet Strangers
If you meet exactly the same people every time, what are you gaining by going? You could claim that every time you meet, you get to know each other a little better, and I should jolly well hope this is true! But do you need to go to a networking meeting in order to do this? You now know each other and have one another's contact details. Couldn't you arrange to meet for a (several?) more in-depth chats without needing to do so at a networking meeting? If it was the case that strangers were there to be met at the networking event, wouldn't it rob you both of 'stranger-meeting time' if you were to talk to each other?

And one other thought. Any one-to-many networking that you do - such as going round the table, each introducing yourself for 30 or 60 seconds - has only one purpose. To stimulate a request for a one-to-one conversation! It would actually be most unusual for anyone to get business as a result of their elevator pitch without any other contact whatever!

Are all strangers likely to be equally nice to chat to, in need of your contacts, or helpful to you? Of course not! We can all work on our rapport building if we need to, and become nice people to chat to. But who might be most in need of your contacts? And who might be the most helpful type of stranger for you?

The answers to these two questions are really the two sides of the same coin. Both of you want to be meeting people who are naturally 'rubbing shoulders' with your ideal customers. And you need to make sure this happens regularly. But this does not always have to be a one-to-one process. Several people can form such a 'loop' and it will work as long as the loop is closed.

2. Recruit and Train Your Sales Team
How many of you have gone to a networking meeting with this as a specific objective rather than as vague wishful thinking? OK then, how many of you have either been employed in a sales team and never had any team building, product training or motivational meetings, or could imagine such a scenario if you haven't? Of course it sounds ridiculous, so why think you can avoid it when it comes to your network?

There are three crucial ideas you must keep in mind about what is, after all, your 'surrogate' sales team.

• You don't employ them so they don't have to do as you ask
• You don't employ them so there's no financial incentive to do as you ask
• You don't employ them so they don't have a job to lose if they don't

Now you have to get them to sell for you!

Do also bear in mind, you're not requiring them to actually sell your product or service! You can do that yourself when you get face-to-face with the prospect. What you want them to do is to spot and qualify opportunities for you. But you don't just want them to say, "I noticed this .... as I was driving past. Why don't you contact them?"

You want them to have had conversations with people which conclude with something like, "You really need to speak to my friend ..... They should be able to help you. I'll get them to contact you."

To do this your 'salesperson' must know, because you have trained them, how to spot one of your ideal customers and how to identify that they have the sort of problems you can fix. Most importantly they must be able to build up sufficient empathy that the person will agree that they would like to find out more about getting rid of the pain the problem is causing.

To do this you must have trained your team to recognise the symptoms or pains of such problems, and the key to this is giving them a very simple tool that will help in this identification. For example, if your forté is helping companies whose Marketing function is not fully effective, you need to give me a tool for recognising ineffective marketing.

This also covers point 3. and I'm sure you don't need my help with number 4.!

Succeeding In Spite of Yourself

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What do I mean by 'succeeding in spite of yourself'? Well, many businesses will say they are getting what they believe to be acceptable results. Of course they would like to do even better but either they are not really sure how to achieve this, or they are unaware that improvement is possible for them, and anyway, we've just said the results are acceptable!

Many businesses I meet are suffering from one or more of these faults:

• They don't focus on any particular type of customer
• They don't know what is likely to be appealing to their customers
• They don't know why their customers buy from them

As a consequence they continue to:

• Waste money
• Underperform
• Squander their potential

You can do the same as I do every time I meet a potential new client. There are a very small number of very simple questions you can ask yourself to establish whether your business could be easily and rapidly improved by making some elementary changes to your Sales and Marketing function.

Firstly, list all your current methods of promotion

Then list all the messages about you, your products and services, your customers, the problems you help solve, the joy this brings to your customers, the ways in which they can let you know they're interested, the incentives and risk reducing things you offer, which you are communicating in all your current promotional activities.

• Are these messages consistent across all the material?
• Do they make you stand out from your competitors?
• Or are they things your customers expect to be able to take for granted?
• Do they pass the "So, what" test?

If there are too many 'NO's in there, then there are some easy fixes I can suggest.

Whilst on the subject of what the customers expect to be able to take for granted, there is a simple test for whether your message is a UPH (Uniquely Placed to Help) or a TFG (Take For Granted). Just turn your message on its head and ask yourself if any of your competitors are likely to compete on this opposite message. If you think your superb service is a UPH, then how many competitors are advertising in the trade press that theirs is appalling?

These few questions on their own are generally enough to tell whether any business owner whom you know could benefit from my help. But for your own organisation, let's go just a little further.

Now, do you know:

• Are you successfully communicating these messages?
• How do you know whether you are or not?

Again, easy fixes are available if your answers start to trouble you. I have one more question for you.

• Why do your customers choose to buy from you?

Do you know? Have you ever asked them? Presuming that you have, and you have made a list of the reasons, let me finally ask you, "Why is this list different from the list of messages?" I just kind of thought it would be!

If the truth is that, above all other reasons, they buy from you because you're always cheerful and wear red trousers, then for goodness sake why aren't you promoting yourself as the cheerful, red trousers company?

I hope I have given you some food for thought. You absolutely must have solid foundations for your marketing. It might be more exciting to lay bricks, erect timbers and tile the roof, but until a trench has been dug and filled with concrete that has now set hard, there's no point!

Can you clearly articulate who your ideal customers are? Do you know what good they believe they get out of buying your products or services and from having you as their supplier? Can you say why you are a better bet, less of a risk, and more trustworthy than your competitors? And are you letting your market know all of this?

Start-Ups and Other Companies

Register for my 'Pricing By Value' Workshop in Cambridge on July 7th

Wealth creation, derived from the huge knowledge and science base in this country, is critical for the UK's continued prosperity. But turning ideas into saleable, profitable products is not the same as merely turning ideas into products! It is crucially important to create value from any technology, for all stakeholders. If you want to make a quick buck, technology exploitation may not be for you.

In all businesses, but especially start-ups, you need to have experienced Sales and Marketing people. If not, you stand a good chance of failing, unless those involved in the organisation accept this premise and invest in becoming experienced, extremely rapidly.

Every business can be likened to a three-legged bar stool.

Whether you sell products or services, whether you sell to other businesses or to consumers, whether you are large or small, the same model still applies.

One leg of the stool represents your Operations, your 'doing what you do'. Most businesses were started because someone was particularly skilled at doing something and decided to start a business doing it. When asked to rate their Operations function out of ten, most business owners would give a score of 8 to 10 - and quite rightly too! Started with a high level of skill and a huge dose of passion, the business is their baby. If there are any operational problems, this person is onto them in a flash and fixes them almost as quickly.

The second leg of the stool is Financial Management, the 'looking after the money'. Many business owners would rather not do this bit themselves, but they know that they cannot neglect this area so they get their Accountant to help them. They may employ the services of a bookkeeper, they may purchase commercial accounts software, but they never lose sight of the fact that managing the finances is an important function. At least what they believe to be adequate financial management, even if in reality their practices leave a lot to be desired.

The third leg of the stool is Sales and Marketing. Nothing anywhere else in the business is of any use unless the world knows you have something available for sale and unless enough of them end up buying it from you, a process that generally requires someone to sell it to them. Many businesses believe that this is a function that can be left until later, or which can be done on the cheap, or which has one universal answer which is suitable for every business, so all they have to do is 'turn the handle'.

Like any other three-legged stool, take one of these legs away and the whole thing falls over.

It can be interesting to ask the owner to rate their business out of ten for both of these other functions too. Surprisingly often you will find that the Finance score is the average of the Operations score and the Sales and Marketing score! If indeed this were a law of the Universe, what would it imply?

We can assume a score of ten out of ten for Operations. If Sales and Marketing was totally neglected, the Financial Management could never exceed five out of ten, no matter how much effort was put into it! But if Sales and Marketing were driven to a score also of ten, then Finance will be at ten out of ten before any effort is put into it! I am not suggesting you totally neglect your finances. But I am suggesting there's a huge amount to be gained from getting Sales and Marketing as good as they can be.

If a business owner does not already have Sales and Marketing skills, they must acquire them. The owner doesn't have to be directly involved in the Sales and Marketing functions of the company, but they must know enough to be directing the activities of the individual or department to whom they've delegated the task in reasonable and meaningful ways. In the UK we seem to be happy to allow those with technical skills to graduate without insisting they all also have some level of commercial, particularly Sales and Marketing, skills too. If someone leaves school, college or university without the knowledge of how to exploit a good idea should they have one, then we are letting them, ourselves and the whole country down.

And the seat of the bar stool? That's the processes and procedures that hold the 'legs' of the company together!

Visit my website http://www.davidwinch.co.uk for loads of Marketing and Sales advice

Can You Be Trusted? - Continued

In February I talked about trust taking a long time to build, only if you let it. I’m grateful to Paul Hayward of In Your Dreams Coaching for some further ideas on this subject.

There are actually some people we trust automatically. They don’t need to spend time, even a short time, cultivating and building our trust in them. We see them in an ‘innocent until proven guilty’ sort of way.

So who are these people? Could you become one of them? If so, how?

When you go to a networking meeting you will be getting to know people you’ve never met before, building credibility, rapport and trust between yourselves. You’ll be strengthening your relationships with the people you already know too.

But, even on your first visit to a particular group, or on your first visit to a particular venue, there will be people you knew you could trust, well before you ever started your journey!

Imagine the scenario. You walked in, you introduced yourself to the host, you got yourself a drink and you started chatting to other people. After a while you collected your food and carried on chatting. You may even have replenished your drink and listened to a guest speaker.

Did you establish credibility, rapport and trust with the chef? Did you do the same with the farmer who supplied his eggs and bacon? With the miller and baker who contributed the raw materials for your toast? Or the coffee plantation workers? Or the tea pickers?

Of course you didn’t! You intrinsically trusted them all to deliver products or services that were ‘fit for purpose’.

Maybe you can think of ways in which your business, and your products and services can be seen in the same light.

Don't Get Ripped Off

I’ve been hearing some horrific tales recently about the prices people are paying for web addresses and web hosting - some are downright scandalous! I have heard of over £100 being paid for a URL, and £100 per month for hosting!

Let me put you all in the picture. These are the prices I paid for my addresses and my hosting packages, and what I get for my money. I have checked with my hosting service and these prices are still obtainable now.

It doesn’t matter if you write your own pages in html, or with the help of something like FrontPage or Dreamweaver, or whether you pay someone else to write them for you. Creating and uploading the pages, and updates to them, can be separated from buying the web address and paying to have the pages available over the internet.

I am not saying these are the lowest prices available. I am saying you shouldn’t need to pay any more than this - plus my supplier’s service has been absolutely excellent in all the years I’ve been using them.

I am not a ‘reseller’ of this stuff and have no wish to be. Like you, I am just Joe public, buying for my own needs alone. I get no special deals and, as I am not going to tell you the name of my hosting service unless you specifically ask me, I hope you will believe me when I say I receive no incentive to recommend them.

Item	Unit Prices (ex VAT)	Minimum order Quantity
.co.uk address	£2.79 per year	2 years
.com address	£7.99 per year	2 years
.org.uk address	£2.79 per year	2 years
Hosting Package 1	FREE
Hosting Package 2	£39.87 per year	Cancel anytime
Hosting Package 3	£89.99 per year	Cancel anytime
	£8.99 per month	Cancel anytime
Hosting Package 4	£129.99 per year	Cancel anytime

The key figures for the hosting packages are:

	Package 1	Package 2	Package 3	Package 4
Web space	2.5Gb	5Gb	20Gb	Unlimited
Bandwidth	100Mb/month	30Gb/month	60Gb/month	Unlimited
Mailboxes	1,000	1,000	10,000	Unlimited
Autoresponders	1,000	1,000	10,000	Unlimited

Free, unlimited e-mail forwarding, catch-all e-mail, and junk-mail filters are common features of all four packages. 24/7 technical support and a 30 day money-back guarantee come free with the paid-for services.

Please, don’t pay more than you need to for your web addresses and hosting.

David