The Numbers Game

February 8, 2012
Sedona, Arizona

I spend quite a bit of time with numbers in my business.

When I’m working with a client, some of the important numbers are things like customer acquisition cost, customer lifetime value and conversion rates.

When you know your numbers, you can make smarter decisions.

As a service provider, there are very few numbers that matter in my business.

Once I begin working with a client, the relationship tends to be quite profitable.

I have very little overhead, so basically, revenue is equal to profit.

This hefty profit margin is the big benefit of a service business. And it’s a benefit that helps to make up for the gigantic drawback of having a business model where I’m basically trading time for dollars.

I don’t bill for time, but time does act as a limiting factor in the amount of value I can provide via this service. There are only so many hours in the day.

Apart from total revenue, the only number that really carries any significant importance for me is how large my universe is. In other words, how many people know I exist and understand the value I provide?

If that number is high, my business does well. If that number is too low, it suffers.

I know how to build relationships…

I know how to communicate value…

I know how to charge high fees…

The only thing that’s left is making sure that more people know about me today than knew about me yesterday.

Consider this:

The typical direct response campaign might be considered successful converting at 1%.

Let’s use that number a second and apply that same ratio to a service business.

To get one client, I’d have to talk to 100 people. Fortunately, my “conversion” rate is exponentially higher than that. But this scenario is valuable nevertheless.

Because it quickly makes it clear that most service providers simply aren’t “talking” to enough people to have a fighting chance of succeeding.

You need a “platform” that speaks to the masses and helps you filter out the serious prospects for your service.

This is one part of your business where making sure you use leverage is key.

Your platform might be be direct mail… it might be public speaking… it might be a kick-ass blog… or a published book.

What system do you have in place to make sure that YOU are giving yourself a chance for real success?

This is not hard. You just have to do the work.

See you next time,

Jason Leister
Editor, The Client Letter
Creating Success for Independent Professionals
ClientsSuck.net

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