BIG. SMALL. SIZE MATTERS
Big. Small. Size matters. Especially where deal profitability is concerned.
Anyone that doesn’t believe that – read on.
My new client in the North West cleans wheelie-bins for a living (not glam. but v. lucrative!). He previously ran FaceBook ad campaigns and recently generated a new lead in Barrow – an hour’s drive away down country roads. Off he went to deliver his service and collect the cash. All £20 of it. For 2-hours’ worth of driving and less than 10-minutes’ service delivery.
That’s less than £5 an hour by the time the costs of the ad campaign are accounted for!
At the other end of the scale, (not income though, bin-cleaner makes much more than outsourcing guy!), my other friend John (obv. not real name) works for a Tech outsourcing firm. He uncovered an opportunity with an existing account potentially worth £40m but wouldn’t close for another 18months. That meant no deals for him this year and that needs lots of management buy-in, not to mention careful managing of his own personal finances.
John got permission from on high to pursue the deal but, wouldn’t you know it, 2 important changes happened over that time period: the scope of the deal got reduced by the time it was awarded plus the market conditions changed too – more competitors meant John wasn’t able to charge as much for the service – “only” £25m.
Consequently, John came in under target for both years and probably cost him £30-40k in reduced earnings. Ouch!
Size matters, so make sure you know why you’re pursuing that lead and
Calculate your RoE (Return on Effort) before you put too much effort into projects Return on Investment – the more effort you’ve got to put into winning a project, the bigger return you’ll need at the end of the sale.
To calculate RoE, make sure you know:
How much budget has the client allocated to the project? How much of that budget is for you (get real!) What resources – budget, people etc – is the prospect is prepared to invest in the project What resources – budget, people etc – does the prospect expect YOU to put into the project? In short, ask yourself:
WHAT’S THE SIZE OF THE PRIZE!
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