Small or big (3)

Ford Harding just posted this comment to my earlier posting "Small or Big". It is worthy of reposting here:

Dear Mark:

Your comments on my posting helped me realize that the piece is missing something. Some firms welcome a professional who sells many small projects.

For example, I know one MEP engineering firm that specializes in doing all the small projects that other firms would find to be a nuisance and give to their weakest engineers. They have built a strong niche by doing so. Others find it is not in their best interests to do small projects, excepting those that provide a portal to larger ones. Doing small projects is often less profitable, because leverage is lower. Selling costs can also be much higher per dollar of project.

Administering so many small projects is also expensive, especially if a firm is set up to administer large ones.

Our study of professional firms that experienced geometric growth for several years, revealed that many felt that turning away small work and small clients was one of the elements that kept them on a high revenue growth track. Firms like Accenture, CSC Index, and Diamond Technology grew extremely rapidly by turning away work and clients that would have distracted thier professionals from bigger clients.

One firm I know would only work for clients paying fees of at least $250,000 a month. During the go-go years they increased this to $450,000 per month. I also know the profitability of this firm which was at jaw-dropping levels.

Even with my own little firm, we found that profitability grew noticeably when we stopped taking small assignments that were in no way linked to larger ones. Pushing the minimum up each year has helped us grow. Of course what is large to us is still small to a big firm. I hope this helps.

Ford Harding

Ford's points are well taken. It can take courage to drop the small jobs, but in many cases this could be the key to growth.

Small or big (2)

Can 'thinking big' pay off? Searching for images to go with this theme, I found this interesting site/blog marketing magic tricks that motivational speakers can use to make their point -- here, a "dollar enlarging" trick.

Reading the relevant chapter in Ford Harding's Rainmaking: Attract New Clients No Matter What Your Field

as I prepared the review (due today) for The SMPS Marketer, I understand more clearly why Harding generally advocates AEC professionals and consultants to watch 'job size' and often decline to work on/bid the smaller projects. Simply put, the effort to win and manage these little jobs can be the same as the big ones, and the effort put into winning the smaller projects can detract from larger initiatives. Clearly, it makes sense for professional practitioners to set limits and controls on what they do.

Perhaps my perspectives are shaped from the industry I serve -- and my brief career as a real estate representative in the mid 1980s before I started my publishing business. Our office had a cross section of competence; from a failure who spent weeks only to lose the sale of a $30,000 mobile home, to top producers moving millions of dollars in real estate each year. I learned some basics, including how to watch out -- and avoid -- 'dreamers' in my office. These were sales reps that saw themselves as commercial specialists; and were working to put together 'huge' land/commercial deals. Initially I looked in awe at these purported super-stars; then I realized they were all talk and little action; living for a dream of success they would never achieve. Meanwhile, the representatives doing solid, middle-sized or simple residential deals earned sizable commissions and referrals for future business. My manager told me: "Watch out for the big stuff -- it tends to fail more often than succeed, and if you want to succeed in this business, don't live in the clouds."

Realistically, the selling cycle for larger projects is much longer, more complex, and subject to disappointment than small jobs. If you put all your eggs into one basket -- that big job you are hoping to win -- and it fails, you are going to have serious problems. And in a recessionary environment, where you need to find and scrounge up business, restricting yourself to big projects may be an invitation for disaster.

On the other hand, if you think small, you may end up small. Not having some thresholds and guidelines on how much effort you put into any individual initiative is inviting you to tread water, or sink under the weight of your mismanaged time/overhead. Certainly, in our business, our salespeople are told to focus on setting up features -- and use as much 'automation' as possible to sell individual one-time ads. (An in-person sales call cannot be justified for a transaction worth $350.00).

I think it is rational for you to know your optimal numbers, guidelines, and stick to your rules within these guidelines. Obviously, if you can raise the threshold and earn larger jobs without significantly stressing your time/risk, do it. For example, if you determine that your closing rate and effort to s ell an average job twice the value of your current norm is less than 50 per cent lower, then you should move to the higher-value threshold. As Harding suggests, you can refer the smaller projects to others -- who in turn will hopefully return the favour by returning referrals for larger projects they are incapable of handling.

So, in conclusion, it doesn't hurt to think bigger -- in fact it may be one of the smartest things you do. Just don't be like the disillusioned people I worked with in that real estate office; living in their clouds in their minds, but in the cellar in actual income.

(As I wrote this blog entry, Harding called me. I had sent him the draft review of the SMPS Marketer article for a last-minute check -- having previously informed him I would do that. In the previous communication, Harding responded he might not have time to review my review; and he confirmed that in the brief phone conversation today. Here we see the combination of time management and courtesy essential for success, on both our parts. )

Small or big

Ford Harding in his latest blog entry, Why Peter Couldn't Bag an Elephant, describes the challenge of a rainmaker accustomed to selling small projects, going after 'big game' (or elephants). In composite story he describes the challenges of someone being pigeonholed into the little jobs -- and finding it difficult to break out for the bigger ones. The biggest challenge: The number of successful sales, and the time between sales, is much higher for larger jobs -- you might need to go six months before you get a commitment -- and that is too long for the person accustomed to closing a deal or two a week.

Frankly, I'd be happy with someone bringing in a steady stream of 'small work' and am not sure why small jobs cannot lead to bigger ones for the firm -- if the rep who brings in the small jobs is typecast in that role, presumably someone else could help or work with the rep on a transitional/business development scheme to bring in the larger jobs while the company is working with clients on the small projects.

Heck, if one of my reps is consistently successful in bringing in small jobs to the volume cited in Harding's blog (and they are profitable jobs), I'd make him partner, in an instant!

Home again (at last)

It's good to be home again -- after the weather-related flight delay, we ran into another snag, mechanical, in Toronto, but I finally made it back.
Lots to catch up on now -- reports from employees, business planning, and my commitment to write a review of Ford Harding's updated version of Rainmaking: Attract New Clients No Matter What Your Field for The SMPS Marketer.

Free Rainmaker book

Ford Harding is offering a few readers of his blog free advance copies of the updated edition of his classic book: Rain Making: The Professional's Guide to Attracting New Clients. I'll be reviewing it for The SMPS Marketer; you can review it for Amazon.
Is it worth reading and reviewing? Absolutely. The reviewing process will help you integrate the knowledge you receive from the free copy. Check his blog to learn how to obtain your copy.

Little things mean a lot

I really like this posting on Ford Harding's blog -- the 'big win' often is the result of a number of small but crucially important little things. We should never forget that seemingly unimportant details count, a lot.

Ford Harding's resource

I've elevated Ford Harding's blog from the Construction Marketing Blogs to the Construction Marketing Resources section because of both the content quality and its frequent updating. In his latest posting, Another Way to Use Ancedotes, Harding relates the importance of narrative storytelling in marketing -- very much in line with Stephen Denning's Stephen Denning’s The Secret Language of Leadership, which I am currently reading.

If you know of blogs directly relevant to construction marketing, please feel free to let me know -- the link is free and I don't require a recirpocal back-link (though of course it is always appreciated).

Ford Harding's latest book

I'm reading right now an advance copy of Ford Harding's "Rain Making -- Second Edition". Harding has written perhaps the most useful books about the art of selling for professional service providers; lawyers, architects, engineers and his latest book advances on the principals he advocates so effectively in the first edition. More soon.

The Five Don'ts of Sales Presenting

I really enjoyed this Five Don'ts of Sales Presenting blog posting by Sims Wyeth (above), in his blog High Stakes Presentations. It is simple, distilled advice -- just one entry in an overall well-designed blog. (I found it through Ford Harding's blogroll, where he is listed along with, now, me!)

Here is the first 'don't':

Don’t even go to the presentation if the client won’t meet with you ahead of time so you can learn what they want and why they want it. Your time is extremely valuable, as is theirs, and you should not waste either their time or yours by pursuing an opportunity for which you are not suited, or by traveling to recite information they could read in a brochure, e-mail or website.

Wyeth is of course absolutely right here -- as (you will notice when you read his blog), is his effective connection and relating through association with other influential speakers and allies.

Certainly, in business it is possible to soar and build your own reputation, but you'll go a lot further if you associate and relate to others with leadership talents in their areas of expertise.

The 'sign up' opportunity

An example of a social network diagram. From the Wikipedia posting: "Social Network"

So, Ford Harding told me yesterday that he hasn't seen any evidence yet of social networking sites actually working in AEC business development, with one possible exception. That is, a Rainmaker uses the sign up and introduction process within the social networking system to create a touch point to renew or establish acquaintanceship -- with the goal of seeing if there is further opportunity going forward.

Why does this work? I'll speculate that at the entry point -- either when you first join the social networking site, or when you introduce someone to it -- you have a heightened awareness of the process and receptiveness for input, ideas and relationships. When you first join, if you already know people within the community, you find/meet and relate to people who may validly be in your network but have lost touch with. And when you are invited to join, then you have a moment of awareness about the person who invited you -- all as good if not better networking opportunities than the conventional meet-and-greet, phone, or writing/emailing channels.

Harding however also said he doesn't see much value in 'connections' such as offered by linkedin.com, where theoretically you can connect to someone through an intermediary you both know (but when you don't know the person you are trying to meet.) Harding says he ignores requests of this sort through his own network -- he implies there simply isn't enough trust and knowledge to risk the consequence of burning a solid connection with an invalid referral.

However, Harding also indicates that social networking may work well for a few people at the very top of the power curve (see previous posting) -- although he seems to have a wide network on linkedin.com (with more than 200 names in his contact base), he doesn't consider himself to be a star in this area -- with people who have thousands of contacts on file. Again, I wonder, as must Harding, how anyone can really relate, know, and understand thousands of personal connections on these networking sites. But I'm not 25 years old any more -- and I have trouble recognizing people right under my nose!

The power curve

This graph is from a video showing how unevenly wealth is distributed in the U.S.

In a fascinating interview this morning, Ford Harding related the importance of the Power Curve in defining success in networking, marketing and wealth. Simply put, a very few get most of the value and business, and then things drop sharply to the great masses. This suggests of course there is little room at the top -- unless you are first, or really better than anyone else out there.

These observations can be daunting to someone wishing to break through and succeed in AEC marketing. Harding, for example has literally written the book on "Rainmaking" -- the traits required to sell professional services. He has an updated edition coming out and will be sending me an advance copy. If you read his books, and diligently follow his suggestions, I'm confident you, too, could become a Rainmaker yourself.

But most of us simply won't. We won't build the network, the connection-base, the complex web of relationships and sharing that you need to achieve this type of success. I suppose that is okay for those of us either at the top or on our way there (and yes, I'll put myself in that category).

However, I don't think the power curve should discourage you if you think about things this way -- there are many ways to set yourself to be at the higher end of the power curve; and (to me) the best is excellence within your niche or area of expertise and/or the first. Surprising things happen when you are -- and it is great to scale the heights when you figure the way up.

Reasons for calling -- keeping in touch

Ford Harding makes a great point in his blog entry Reasons For Calling when he says the most successful rainmakers find reasons to keep in touch with their large contact list, consistently. This process is natural to them -- and they find ways to maintain the connections in manners that are respectful, non-intrusive and (considering the volume) don't require that much time for individual interactions.

I'll be speaking with Harding on the phone this morning regarding social networking (for the SMPS Marketer article)

Ford Harding's blog

I've just discovered -- and permalinked -- Ford Harding's blog. Harding is the author of several important books including the classic Rain Making: The Professional's Guide to Attracting New Clients a staple of the Society for Marketing Professional Services (SMPS) certification program.

I rediscovered Ford when I discovered that SMPS vice-president Lisa Bowman had a presence on linkedin.com. When she accepted my invitation to link, I discovered she had one existing link --to Harding -- who is somewhat more advanced than either of us, with 216 connections and eight recommendations.