Back when I was in sales, one of my biggest frustrations was selling products that didn’t just sell themselves.
I was a top-performing salesperson everywhere I worked. But when it came time for a prospect to make that final decision, I often encountered hesitation.
Hesitation that would lead to delay…which would lead to a lost sale.
Years later, I realized why I had so much difficulty. In most cases, I was selling products which my prospects perceived as “important” or “nice to have,” and not critical.
Here’s the thing: In a good economy, you can make a nice living selling important or even nice-to-have products and services. It’s not always easy. But if you’re sharp, motivated and truly believe in what you sell, you can do well.
But in a tough economy, such as the one we’re facing currently, you do NOT want to be stuck selling lower-priority products or services.
As a freelance professional, this means that you have to start thinking long and hard about two key things.
First, how are you communicating your value to your prospects? Are you positioning yourself as a better alternative to competing freelancers…either because of your background, experience, track record, skills or other attributes? Are you proving your value with actual examples, testimonials and other credibility elements?
Or are you still using platitudes such as “full service provider,” “end-to-end solutions,” “premier source” and “we strive to exceed client expectations”? In other words, the kind of language that doesn’t quite resonate with a decision maker who’s in panic mode right now.
Second, are you going after clients that are actually doing well (and even growing) right now because of the economy? Are you marketing your services to organizations that are taking advantage of the situation to pause, take a hard look at their businesses and make smart decisions that will enable them to come out of this mess stronger?
Or are you chasing prospects that are poorly positioned to win in this cutthroat environment?
I can tell you from experience that ignoring this strategy can be dangerous. I made a big mistake last year when I let of my good clients become 50% of my total income. While times were good or OK, the money was great. But as soon as the economy tanked, that income stream dried up.
(By the way, this client is in a sector of the technology industry that’s very mature. To their target audience, their offerings are considered “important,” but certainly not “urgent.”)
I found myself trying to make up for a big chunk of income in the middle of summer – a tough time to get anyone’s attention. In the end, it all worked out. But I learned a very valuable lesson.
Look, the current economic situation is not going change overnight. So instead of worrying yourself sick, take charge of your business. Demonstrate clear economic value to your prospects. And go after clients that are taking the same approach with their own prospects and customers.
What are you doing differently in this economy to maintain (or even grow) your freelance income?
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Ed Gandia is the co-editor of The Wealthy Freelancer and publisher of The Profitable Freelancer. For a limited time, Ed is giving away copies of his new 80-minute audio class titled 10 Smart Ways to Grow Your Freelance Income in a Recession (a $39 value). To get your free copy, visit http://theprofitablefreelancer.com/site/newsletter
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Great advice, Ed. In troubled times, freelancers often seek out work from anywhere and everywhere. Focusing your efforts on those clients who will actually be able to pay your invoices is an important survival strategy. Thanks for the reminder!
“… I let [one] of my good clients become 50% of my total income…”
Oh my. I was in a similar situation back in 2002 with a few clients accounting for a big portion of my freelance revenue. This was just as I was about to make the transition from being a moonlighter with a day job and working full time for myself again. Then I was caught by surprise as two clients were bought by the same company on the same day, suddenly wiping out that income stream. Then just as I started to make inroads with the acquiring company, it was bought out by another one across the ocean. It took a while to recover from that, but I resolved at that time to distribute my business risk over a broad client base and allow no single client to take more than 15% of my business. The top 10 account for perhaps 70% and there is a large pool “waiting in the wings” for more capacity to be available. While some in my profession (technical translation) consider it impossible to work with a large client base, I find it necessary to avoid the effects of business cycles and other problems. This distribution of risk has proven to be the best insurance I’ve ever taken out. In slow times we turn down twice as much as we can handle instead of five times as much, but we always have as much work as we want.
Thanks for the sensible perspective. With a long background in financial services I tend to carry the importance of diversification over into everything I do. Which is why I’m working on reducing the percentage of business my biggest client represents (from 85% to 55% last year!).
But it drives me batty when I run across “gurus” who advocate making “life easy” by getting as much work as you can to come from one company. A sure recipe for disaster…especially in this day and age when legendary stalwarts are folding like a house of cards!
Tracy
@ Kellye – Yes, it’s somewhat counter-intuitive to be more selective in tough times, but I think if done right, it’s the smartest thing to do.
@Kevin – that’s a very sound strategy. Good to hear that even with so many clients, you always have a few more waiting for a slot to open up.
Although I like the idea of diversifying my business to this degree, as a solo practitioner I’ve found that after 5 or so clients, it gets very difficult to manage my business and keep things under control. Again, I think it’s more a function of the fact that it’s just me doing all the work, and maybe also the profession I’m in (B2B copywriting and consulting). If I had a writer or two working with me (which I currently don’t), I can definitely see scaling the business to 8 or more clients.
Tracy – I’ve seen the “go deeper within each account” strategy work very well and fail miserably. I think it all depends on your specific profession, your niche and how aggressively you market yourself. Even in this economy, some freelancers can reach a point in their career where they have so much momentum that losing one client (even a big one) won’t hurt them for long.
For most of us, though, careful planning and a constant review of our clients, current projects and backlog (something I now do weekly) will go a long way toward minimizing this risk.