Today, on Hubstaff’s Agency Advantage Podcast, I’m talking with Blair Enns of Win Without Pitching who shares his 5 Rules for Selling Digital Services.
Blair is a 25-year veteran of the business side of the creative professions and has over 30,000 hours invested in the question, “How do creative firms win new business without giving away work for free?” He shares the philosophy behind his answer in his book, The Win Without Pitching Manifesto, and if you haven’t checked that out yet, you should.
That being said, today we are going to be less philosophical and more tactical as Blair shares these practical rules that if followed will, simply put, make your agency more money. Not only does he share the rules, but we discuss where most agencies mess up and how you can get started turning things around.
If you’re tired of clients expecting you to give away your best ideas for free, then this is the episode for you.
Your services should be productized or customized. Not both.
According to Blair, productizing and customizing offer different advantages and different constraints. If you productize, you are pricing the product based on inputs. This works because you can offer the same product at the same price to an infinite number of clients.
However, by pricing based on the product and not the client, you’re missing a huge opportunity based on price discrimination, the idea that some people can and will pay more for a product. On this side of the market, you can afford to cultivate fewer client relationships because you’re looking for clients who will pay more for your product.
Basically, the two approaches have different strengths and weaknesses based on scale, and it all depends on what works best for your business. However, Blair does point out that by productizing, you’re essentially leaving money on the table by charging everyone the same price, so keep that in mind.
Always present your clients with multiple price points
This rule is simple: just as having set prices for custom services is a profit killer, only presenting potential clients a single option will also limit your profits. Different clients have different needs, and even after a thorough discovery session, you still may not know what those needs are.
If you give your prospect one option, you are banking on the fact that you understand all of their needs and what they imagine a solution should look like and what it should cost. Not only that, but you also don’t stand to gain from any of the psychological benefits of presenting buyers with multiple options.
Whether your services are productized or not, if you don’t allow yourself to have multiple price points for different types of clients, you really are setting yourself up for failure.
Differentiate or die
Think of positioning as three legs to a stool. Most of the time, when people talk about positioning, they’re only talking about the first two, which are discipline and market. What do you do and who do you do it for? If you combine those two together, we used the word focus to describe them.
When we say what’s the focus of the firm, we mean what do you do and who do you do it for? Well-positioned firms build these kind of niche businesses where they narrow into one of those two variables, either a narrow discipline or a narrow market.
After you arrive at the focus, then you need to move to the third leg of the stool, which is perspective. What is your overarching viewpoint on how this discipline for market should be done? The perspective of Blair’s business is right there in the name, Win Without Pitching. There are other business development consultants, but they don’t have the same focus as Blair’s company: Blair really doesn’t believe that you need to do this by pitching your most valuable product, your thinking, by giving it away for free.
When you narrow your firm along those lines, you go from hundreds or thousands of direct competitors to a very small number. Then you differentiate yourself from those few remaining competitors through your perspective.
Get paid to scope
Most agencies assume there’s no chance anyone would ever pay them just to scope out a project. Blair disagrees. He points to plenty of firms who would never try to solve a client’s problem without ensuring client engagement. Think of other professional relationships in your life. For example, a lawyer gets paid for an initial briefing. Your time is just as valuable.
At first, saying that you’re pricing to scope a project might be difficult, but Blair offers some concrete tips. Tell your client what you will be doing: looking at objectives, the competition, the technology the client uses, whatever variables will affect the project and its complexity. Then explain how that factors into your assessment of the project timetable and complexity. That way, when you name the price for your labor, the client is less likely to balk because they understand what they’re paying for.
Clients want to lease, not buy
One big secret to making more money is to focus on leasing your services, not selling them. Clients turn away from big numbers for a one-time purchase. However, many are willing to lease your services for an initial smaller monthly price that adds up to a much higher end total. For example, Blair tells the story of a client whose prospect wouldn’t pay $50,000 flat but ended up paying $3000 per month for a three-year contract.
In order to justify leasing products, figure out ways to bring value to your agreement with clients. For example, instead of delivering a website for a one-time fee and leaving the client to scramble to update it or make any changes, lease it month-to-month and say you’ll update the design every so often to take advantage of new technology. Or say that you’ll handle SEO or CRO for the client each month. Leasing creates a different relationship between client and agent and allows you to bring a different kind of value to the client.
Want to learn more?
The Win Without Pitching training program is an ongoing training and coaching program. It’s available to creative entrepreneurs, owners of independent creative businesses and their teams. It’s got to start with the owner because Blair starts with positioning. It’s an ongoing program with a minimum commitment of one year. The entire core curriculum lasts three years.