February 19, 2018

Give yourself a budget

Don’t spend your time in a sales meeting trying to learn the client’s budget.

Just figure out what their desired business outcome is and roughly what it’s worth.

Once you have that, then you give yourself a budget to help them achieve their goal.

Wait, what?

Give yourself a budget?

Yep. Let me explain...

Let’s say I meet with a prospect. After about an hour of discussion, I estimate that reaching their desired business outcome is worth roughly $10M per year to them.

When I sit down to draft the proposal, the first thing I’m going to do is set three prices, like:

Now I have a budget.

Starting at the top, I’ll ask myself:

“What could I do for $3,500,000 that would maximize the chances of success for the client?”

Depending on the desired outcome, the list of possible activities might include things like:

Once I have a plan for the $3.5M budget, I’ll remove stuff to meet the $850k option 2 budget, and again to meet the $250k option 1 budget.

Compare this value-first approach to what most people do...

Most people go into a sales meeting already having decided what they’re going to do for the client, they just need to find out how much of it the client needs.

“Hi Mr. Client! We build stuff with Rails. How much Rails-ing do you want us to do for you?”

If you want to increase your profitability, burn this into your brain:

Value determines price. Price determines scope.