#072: How Should You Evaluate a New Prospect?

Just last week I received a call from a friend who owns a small marketing agency.

She had recently lost three solid opportunities—deals she should have won. She couldn’t figure out what went wrong. So she did what most of us do: assume it was her own fault.

Maybe she said the wrong thing. Or her pricing was way off. Or she didn’t have the experience the prospect wanted.

But I’ve lost enough deals to know the truth. She was basing her conclusions on the wrong assumption. More specifically, she was assuming that every opportunity has the same chance of success.

More than likely, it wasn’t something she did or didn’t do. It was simply that these opportunities weren’t really “winnable.”

In this episode, I’ll tell you what I shared with her … and how that shift in thinking made an immediate impact on her business.

The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe in iTunes or on Stitcher to get this show delivered straight to the Podcasts app on your smart phone, tablet or iPod.

Not Every Opportunity Is “Winnable”

My friend’s frustration was based on the wrong assumption—that every opportunity is “winnable.” In other words, that every opportunity has the same chance of success.

That’s NOT the case. Not every prospect and every opportunity is winnable. In fact, the real question is not so much “Why am I losing so many potential new clients?” Rather, it’s, “How can I ensure that I win most of the opportunities I go after?”

There are two ways to do that:

  1. Figure out a better way to pitch the deal.
  2. Pitch fewer deals (only those that have the highest probability of success).

Qualify Better and Faster

One of your most important skills you can develop as a freelancer is the ability to size up an opportunity as quickly as possible. Otherwise, you’ll make really bad decisions.

Here’s how I size up opportunities. I have a whole process for qualifying—this is not it. These are just the factors I’m evaluating when I come across an opportunity:

  1. Lead source
  2. Nature of the project (project type)
  3. Expectations (scope of work, creative direction, deadlines, timing)
  4. How they’re making decision (competition, people involved, etc.)
  5. Long-term client potential (additional work, impact on my reputation, etc.)
  6. Why they’re approaching me (or why they’re interested in me)
  7. Budget or apparent price sensitivity (price vs. value mindset)
  8. General attitude towards professionals like me

Your Best Three Clients Ever

Say you were to evaluate them in each of these areas. How would they score in each of the eight areas above?

Better yet, interview your best three clients. Ask them:

  • Why did you approach me?
  • Why did you pick me?
  • What have you liked best about working with me?
  • Why do you continue to work with me?
  • Where/how could I improve?

Also, think about your worth three clients over the past, say, two to five years. How do you think they’d honestly answer the questions above?

Isn’t Profiling Risky?

The time, attention and energy you give an opportunity should be proportionate with your chances of winning that opportunity. This means that your most important job when you come across something is to evaluate that opportunity for its level of quality. That way you can spend the appropriate amount of time, attention and energy on it.

That’s contrary to what most of us do. Most of us want to give the same amount to each opportunity. That’s a big mistake!

Sizing up the opportunity and allocating the appropriate amount of time, effort and energy at every stage of the “courting” process is how you go from a 30% closing rate to an 80% or better rate.

You’re NOT a quoting machine! You don’t get paid to chase work. And you don’t get paid a flat commission for every project you land. You get paid when you land profitable work!

Your most valuable nonrenewable resource is time. What if you had a screening approach that would separate the “winnable” work from the so-so and dangerous clients in an efficient way? And what if you felt a high degree of confidence in the reliability of this system?

What About You?

I’d like to hear from YOU. How can you apply these ideas to your own quoting process? What do you think you could apply right away?

Or, if you already have a similar screening process, what other key factors do you consider when evaluating an opportunity?