Selling Retainers

How much time does it take you to ‘land’ a new customer? How do you get your prospect’s attention? Inbound marketing? Traditional advertising? Networking? Trade shows? Cold calls? Count that time.

How much time does it take to do the ‘buyer-seller dance’? You know…First call to schedule appointment. Break appointment. Reschedule. Have the meeting. Do a proposal. Voice mail jail. Finally get them. Handle stalls and objections. Close or lose the deal.

Then do the work.

It’s not unusual for the sales process to take longer than doing the work that you actually get paid to do. Especially, when you start looking at your sales process truthfully. Truthfully means understanding that the average practitioner ‘forgets’ to count time with the misses. How many networking contacts before I get a customer? All that time. How much time at how many trade shows, following up with how many leads? All that time. How much time writing blog posts, lead nurturing, etc.? All that time. (Incidentally, I’d put a lot of this paragraph under marketing, not selling, but that’s a different post.

Truthfully also means that we have to know our critical ratios. How many phone calls do we have to make before we schedule our first base appointment? How many first base appointments get to second, then third? How many get proposals and how long does that take? How long does the decision process take? What percentage of proposals have to be modified? What percentage never close?

Don’t be surprised if you don’t know all the answers. Many don’t. This is where I usually start. How many new projects did you get in the last twelve months? What’s your hourly rate? How much did you bill last year? How many hours do you work a week?

Watch this math. 50 new projects. $100/hour. $60,000. 50-60 hours/week (we’ll use 50 hours and 50 weeks). So, if you billed $60K and your rate is $100/hour, you did billable work for 600 hours. If you work 50 hours/week for 50 weeks, that’s 2,500 hours. That leaves 1,900 hours for selling. But wait, you do your own billing, your own IT, you pay your own bills and fix your own screensaver, plus you have strategic thinking time, number crunching time and getting ready time. Let’s say that all that takes half your time. That leaves 950 hours to sell 50 customers…So, an average of 19 hours per project.

Watch this math. Hire an administrative person. Pay them $20/hour to do the billing, IT, pay the bills, etc and you put that 950 hour into selling to new customers and doing that work. Now you have 950 additional hours in your life. You could do like I do and go to the beach, or you use 582 hours to get 30.6 more projects and use 368 hours to do their work and bill another $36,800. Pay your admin $19K and have another $17,800 in your wallet.

You don’t have to be better to do that. You just have to be smarter.

Do you sometimes do more than one project for the same customer? Do you sell them one at a time? Have you ever thought about selling them on a retainer basis? What if every sale you made included three of your services, i.e. three projects? or 12?

Watch this math. 50 new retainers @ 3 projects each. Same $100/hour. Now billing $180,000 for the year. Now, you need to do billable work for 1,800 hours and you’ve only got 700 (of 2,500) hours to sell AND do the billing, IT, etc. So, you must do at least two of the following:

  1. Hire an admin
  2. Increase your hours
  3. Learn how to sell retainers

If you do the math for including 12 services/projects in a retainer, you should realize that you’ll need to hire more people to do the work and you will be the rainmaker.

If you’re interested in making 2012 your year, why not finish 2011 strong? Check out this free 30 minute webinar. “Three Things You Can Do NOW to Get Sales by the End of the Year!

5 thoughts on “Selling Retainers

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