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January 22, 2018

Measuring the True Cost of New Consulting Clients

“Yes, let’s move forward with your proposal.”

For consultants (like me!), few sentences are sweeter to the ear than this one. In addition to boosting next year’s revenue forecast, new clients help you hedge against uncertainty. After all, you never know when an existing client will decide to unexpectedly change course.

As great as new clients can be, there are also a few tradeoffs to consider. In this post, we’ll discuss the costs and risks associated with adding new clients.

Preliminary Sunk Costs

Before you ever bill your first hour, you’ve already dug yourself into a hole. Allow me to explain.

Let’s say that you own and operate a growing IT consulting business. Your company specializes in network and web security, and most clients are within driving distance of your office. About one month ago, a new prospect filled out a form on your website and requested a free consultation.

It turns out that this lead (a well-respected software company) represents a very large opportunity for your firm. That’s the good news. The bad news is that they’ve been putting you through the wringer – with no end in sight. You’ve already visited their headquarters on multiple occasions, pulling your top IT minds off important projects to attend the meetings. After several rounds of proposals, you feel no closer to a closed deal than on day one. To make matters worse, you have a bad feeling that even if you do win the contract, it’s going to be a very one-sided arrangement (in their favor).

The last thing you want to do is pass on the opportunity (especially this far into it), but you can’t help acknowledging your sunk costs:

Lost billable hours: Time is money. Had this lead never requested info, you could have freed up additional billable hours. Instead, your team invested substantial effort in preparing proposals, brainstorming solutions, and engaging with the prospect (for free).

Switching costs: Jumping from one thing to the next increases mistakes and decreases productivity. With so much attention being paid to a single lead, your team must work even harder to keep everything balanced.

Administrative costs: Each meeting brings the inevitable set of follow-up activities. You’ve smartly organized all of your contact records, meeting minutes, tasks, and project milestones in Insightly. That helps out, but there’s still a quantifiable amount of administrative work to go around. Things don’t get done on their own.

Legal review fees: A wise man once said, “The only thing worse than no deal is a bad deal.” Being the prudent business owner that you are, there’s no way you’ll sign something without having legal counsel look it over. That’s smart, but it’s also going to cost you something.

Now, you might be thinking to yourself, “Yes, Matt. These are indeed sunk costs, but that’s just part of doing business. You win some, and you lose some.” I wholeheartedly agree with you. I’m not saying you shouldn’t pursue new business. I’m simply pointing out that there is a real cost that’s associated with any pre-sale process – especially when you’re doing complex deals. Surprisingly, some business owners never consider how much their sales pipeline is actually costing!

Ongoing Obligations

Finally, you receive the email that you’ve been waiting for: the software company is ready to move forward. Considering it’s Friday afternoon, you decide to take the crew out for ice cream and celebrate the victory. Everyone is very excited about the outcome.

Then, Monday morning rolls around…

As you stroll into the office at 8:02, you can immediately tell that it’s going to be a stressful day. You glance down at your phone, and you’re surprised to see several texts from various contacts at the software company. Your inbox isn’t much better. The first email is from the client’s accounts payable department, asking you to fill out a ton of paperwork. Another email, from their legal department, is asking you to complete something called a “new vendor due diligence packet” – before the close of business, of course. And, to complicate matters, your IT manager won’t be coming in to the office today – or the rest of the week, for that matter. His wife just went into labor a few weeks early.

The next thing you know, your office clock strikes 7:00 pm. What a day! As you walk toward your car, another reality hits you: this new client is already changing your company’s work patterns.

Incremental staffing costs: Your IT manager’s absence is a stark reminder of your team’s fragility. Should you hire additional staff to support new and existing clients? Doing so could be a wise move, but it also comes with a big price tag.

Non-billable requests: Some aspects of your client relationship simply aren’t billable. Submitting the vendor due diligence packet is the perfect example. On the other hand, failing to submit the packet would probably result in an unhappy ending for your firm. There’s an opportunity cost to fulfill these types of requests.

Other administrative “stuff”: If you want to get paid on time, invoices must get generated. Overdue invoices must be pursued by your accounts receivable team. Paid invoices must be reconciled in your general ledger. And, at year end, you hope that your 1099 will match up with your books. If not, there’s more work to be done. All of this has a cost.

Ongoing Risks

We’ve discussed the hard costs associated with servicing new clients. But, what about the unknown risks? Here are just a few to watch out for:

Nonpayment: Most customers pay on time. Some customers are forgetful and occasionally require a gentle reminder. Others aggressively push the envelope on payment terms in order to optimize cash flow. Remember, you’re not a bank. An occasional past-due invoice will happen, but a pattern of delinquency is detrimental to your own cash flow and stability.

One-and-done: The client’s work agreement has you locked in for a twelve-month period. That’s great for your current P&L, but what about future years? There’s no guarantee of renewal, which is all the more reason why you need a best-in-class CRM system. You essentially have a twelve-month window to lock in renewals and identify upsell opportunities. A tool like Insightly can help you manage such opportunities, reducing the likelihood of “one-and-done” clients.

Refunds (or worse): While most clients are very easy to work with, some can be quick to point the finger when things go wrong. You’re not planning on anything going wrong, but nothing is 100% certain in business – especially when it comes to the IT world. Until you establish a better relationship with the customer, refund requests are a possible outcome that you want to avoid.

Bad relationships: Consulting engagements are more than just the exchange of services and cash. Lasting engagements are built upon an interpersonal relationship between vendor and client. Like any relationship, however, some are better than others. Both parties must proactively work on the relationship. Otherwise, it’s destined for failure.

Balancing Cost vs. Reward

Clearly, there are many costs and risks associated with taking on new clients. In fact, at this point in the article, you’re probably tired of thinking about them all. I sure am.

So, should you dwell on all the downsides? Absolutely not! On the contrary, the smart consultant simply acknowledges them and creates systems to drive profitability. A platform such as Insightly can be invaluable for doing exactly that. Here’s how.

Efficient Pipeline Tracking: The moment a new lead enters your pipeline, Insightly can bring clarity to every aspect of the sales process. How many team members (and hours of work) have been dedicated to closing the deal? Where is the most recent proposal deck? Insightly integrates with the industry’s most widely used document systems, allowing you to quickly attach and link cost estimates, tracking files, quotes, and proposals. The built-in opportunity tracker brings key dates and milestones into the forefront, such as the forecasted close date, time spent in each stage, probability and deal size, and much more.

Effective Service Delivery: Unlike some CRMs that only track the sales process, Insightly provides a seamless transition from sales to delivery. Converting an opportunity to a project ensures your pre-sales information remains intact throughout the customer’s journey. No more jumping between your CRM, project system, and document system. Insightly brings it all together, ensuring a more cohesive client experience.

Upsell Management: Turn your “doers” into your best sales reps. As clients share their frustrations, challenges, and goals, your team can easily add new opportunities on the fly. They’re already using Insightly to coordinate tasks, projects, milestones – why not turn them loose to also identify upsell opportunities?

360-Degree View of Profitability: At the end of the day, you’re not a charity. You need to know if each client is contributing (or detracting) from your overall profitability. Insightly can help you get the answers you need. The library of prebuilt and customizable reports brings life to your CRM data. Pull together client project information, revenue forecasts, and booked business to make more informed business decisions.

Are New Clients Worth It?

If you find yourself routinely asking this question, it might be time to implement a more robust client management system. To find out if Insightly is the right tool for your consulting business, click here to learn more.

Matt Keener is a marketing consultant and President of Keener Marketing Solutions, LLC. Matt specializes in content marketing and strategic planning, having helped numerous Saas (software as a service) companies and other small businesses worldwide. Read more of Matt’s work, get his book, or connect on LinkedIn.

May 24, 2017

5 Smart CRM Shortcuts to Impress Your Clients

Consultants are in the business of looking smart in the eyes of our customers. (Whether we are actually smart might be somewhat debatable!)

With client priorities dictating every waking moment, consultants can sometimes fall into the trap of overlooking their own business workflows. Although it’s important to keep your customers top of mind, it’s also wise to constantly refine your own operations.

In this post, I’ll share five easy ways that you can use Insightly to streamline your consulting business – and make a lasting impression with customers.

#1: Onboard Clients in a Couple of Clicks

Today is a great day. Before you sipped your first cup of coffee, you received word that another new client (we’ll call them “Smith Company”) has decided to accept your proposal. This represents an excellent opportunity for your firm, and you’re obviously very excited.

As you’ve done many times before, you head over to your Insightly account, find the opportunity record, and mark it as “won.” For good measure, you even convert the opportunity to a project. After adding a few notes to the new project record, you move on to the next item on your to-do list. Perhaps this afternoon you’ll have time to officially get things moving for the new client.

Unfortunately, your day doesn’t go exactly as planned. An existing client has an unexpected emergency pop up, sending you into an all-day meeting. A different client keeps pinging you, consuming any excess brain power you can muster. Smith Company is just going to have to wait until tomorrow.

More than 24 hours pass before the team at Smith Company receives your canned “welcome” email. At this time, you also assign a few tasks to your project manager. You even add a task for yourself so that you remember to schedule a kickoff call. The folks at Smith Company respond quickly to your email, and the ball is in motion.

There’s nothing necessarily “wrong” with your current approach. But, wouldn’t a more expedited process reduce client wait time and make you happier? Sure it would! Here’s how Insightly can accommodate that.

By leveraging the power of workflow automation, Insightly can do all the administrative work on your behalf. For example, you could configure an Insightly workflow to do the following:

Instantly send a prebuilt onboarding email template to your contacts at Smith Company
Assign tasks to your project manager
Assign yourself a reminder to schedule the kickoff call

In a matter of clicks, you could instantly set the wheels in motion when the deal closes – rather than manually doing the exact same thing a day (or more) later. Smith Company would certainly be impressed by your attentiveness, and your project manager could get to work sooner.

#2: Respond to Leads Faster (with Better Info)

Streamlining the customer onboarding process is a great first step, but what about automated lead engagement? Despite being an important part of your future viability, courting new business can be rather distracting to your workday.

Once again, Insightly email templates can come in handy here, too.

Stop and think about the most common questions that leads ask you. In my line of work (marketing consulting), these are the most common ones I get:

How much do you charge for content marketing services?
Can you send me some examples of your work?
Do you have experience developing marketing plans?
Can you help me with my social media?
I need help with my website – can you point me in the right direction?

For the better part of a decade, I’ve answered questions like these countless different ways. And, I’m ashamed to admit, I usually just fire off a quick, one-off answer. A better approach would leverage the power of Insightly email templates. So, as new web leads come in via a web-to-lead form, answering questions becomes as easy as clicking the “Actions” dropdown, selecting the appropriate template, and sending the message.

By building response templates for every common question, you could save hours of time each year and avoid forgetting key details.

Had I followed my own advice from day one, I would have probably saved dozens of hours. Lesson learned!

#3: Host Better Meetings with Tags & Pipelines

Clients love to have meetings with you. After all, your advice matters to them. The most direct way to get such advice? You guessed it….meetings!

The simple act of meeting preparation can be very time consuming. You never know when clients will expect you to run the show, so the prudent consultant always has a few discussion topics up his or her sleeve.

By living and breathing Insightly, you can ensure there’s always something to talk about with clients. Pipeline views and tags are particularly useful for structuring meeting conversations. Let’s take a look at a couple of examples.

As you know, most clients love to see the progress you’re making. You could talk until you’re blue in the face, but showing a visual representation of such progress can be much more impactful. For work utilizing pipelines, Insightly natively builds a visual representation in your project dashboard. Before the meeting, just filter your projects to show only those that apply to the given client. Voila, you have a dynamic explanation of the client’s initiatives, which can be provided as a screenshot or through browser sharing.

Likewise, tags can help you structure a meeting agenda in minutes. This is especially true as your list of client-specific projects grows beyond more than a few. For projects that require in-depth discussion, you might create a tag called “stuck” or “to discuss.” Filtering for that particular tag presents a list of pre-filtered discussion topics, making you look like a genius.

#4: Capture Client Ideas from Your Inbox

Your clients send you plenty of ideas. Here’s the problem: they always seem to forget about their ideas shortly after emailing you.

Luckily, they have you to help keep everything organized!

One way you can achieve this goal is by setting up a new project, specifically for collecting their ideas.

As new ideas arrive in your inbox, just forward the email to the project-specific email address. Insightly will automatically link your forwarded email to the “idea bucket” project. Then, the next time you chat with the client, you’ll have a real-time feed of all their latest ideas.

Stop digging through your inbox for an email you’ll never find. Instead, make a habit of getting each new idea into Insightly as quickly as possible. Your clients will thank you, and you’re bound to yield new revenue-producing opportunities – simply by clicking “forward.”

#5: Create Accountability with Recurrence Patterns

You can’t do your job without clients providing some level of input. All of the best strategies in the world will fail unless your customers are willing to do their part, too.

Many of these client responsibilities, especially for longer-term relationships, tend to happen on a repeating pattern. For example, in my life as a marketing consultant, I’m constantly asking for the following:

Topics to include in the monthly newsletter
New features worth mentioning on social media
Quarterly budget approvals
Ideas for upcoming blog posts
Updates from product development teams

Granted, some of these could be addressed in your ongoing meetings with clients. In reality, most meetings tend to focus on new ideas – rather than ongoing responsibilities.

One way to create accountability is by setting up repeating tasks and email reminders in Insightly. In a perfect world, your clients would have their own instances of Insightly, allowing you to assign work directly to them. If your clients use a different system (or none at all), the next best solution is to assign the tasks to yourself and forward (or auto-forward) the email reminder to the appropriate stakeholder.

Take a monthly newsletter for example. As an outside consultant, it’s literally impossible for me to come up with 100% of the content by myself. I need input from inside team members in order to do my job and produce an engaging work product. If a newsletter needs to go out during the last week of each month, setting a repeating monthly task for mid-month could be helpful. This way, there’s plenty of time to collect the information I need to hit the deadline. Internal stakeholders will also appreciate the grace period, rather than a last-minute fire drill.

Maximize the Usefulness of Your Insightly Toolbox

As you can see, a tool like Insightly offers endless possibilities for the efficiency-minded consultant. Invest time in getting to know the best practices for using Insightly more efficiently. You can even watch free videos and recorded webinars, packed full of tips for maximizing the usefulness of your Insightly account.

Now go out there and really impress your clients – with less effort!