After going back and forth with the scope of the project and pushing the price down, the proposal was signed.
Suddenly, what was a simple project, “nothing fancy” turned out to be very different.
Scope creep is hard to control.
Especially in the first years.
Along the way, I’ve met many service providers who take pride in charging clients for all those little changes and so on.
I get it.
They should be charged.
But I believe even more that, while charging for every little thing is good for the ego is bad for the experience.
And in a service business, the experience is key.
Especially at the beginning of the relationship, before anything is signed.
If the sales process is rewarding, valuable, and smooth, you are almost guaranteed to increase Life Time Value of the client.
So instead of setting prices for every little thing, I’ve developed a system to filter out projects. This way we only work with those we are certain we can truly service. Allowing us to minimize the changes that come up.
Here are 3 red flags I look for in sales calls as I run a productized service
1) The Prospect Needs The Project Solved For Yesterday.
These projects result in long hours fire fighting a problem created by somebody else. They tend to consume all our attention and time. Forcing us to throw away our processes and systems.
Not counting the added stress they create for the team who now needs to stop everything else they are doing and rush to deliver it.
So we don’t take them.
This is a big no when running a productized service. In a productized service you have a fixed scope, timelines, and processes.
Years ago, we defined the fastest we could deliver a project. If the client deadline is shorter than what our process can deliver, we don’t take it.
With time, we were able to cut the time in half allowing us to take more projects. But we still say no if the project is to be delivered in less time.
And Juan, how about the money?
Maybe they were working with somebody else before coming to us, or maybe they were trying to solve the problem by themselves. In any case, it’s hard they will match our price.
Not impossible, but hard for sure.
Either they used the budget on the first company or they never had one. Not an ideal situation for us who need to firefight.
So if the project doesn’t have enough time to follow our process and timeline, then we can’t help.
2) The Prospect Asks For A Discount Before Even Seeing The Price Of The Proposal.
If they are asking for a discount before even seeing the price, chances are I will get some special “simple” requests after we start working.
Before we know it, our profit margin is getting crushed. Now we are overwhelmed, taking away our capacity to service other full-paying clients.
Productised services are fixed in scope, in price, and should be paid in advance. At least 50% before the work starts depending on the service. But in most cases is 100% at the time of booking.
Bigger red flag if they are also promising future work but of course, after testing you this one time at a cheaper price 😉
Projects like these end up being very frustrating for both sides. The team feels exploited and taken advantage of. The client doesn’t get the results they could have.
And may tell the world about it.
Now, not only the project was frustrating, it’s also acting against the business.
No need to take chances.
3) The Project Is Related To What We Do But, Outside Our Area Of Expertise.
A productised service is within your area of expertise, that’s how we were able to productize it. So anything outside of it is considered custom work.
We simply don’t have the processes to make it efficient and profitable. At the same time, since we are not sure we can deliver results, we will have to spend plenty of time learning.
This leads to stress, hoping it all works in the end, which lowers the quality of the experience for other clients. All for a project we may never do again.
So we don’t take them.
When To Take These Projects
Only take these projects if you have no pipeline and they agree to pay upfront.
And even then think about it.
These are high-risk projects that many times result in you having to chase them to get paid.
The time they will consume from you is time you might as well invest in getting your ideal clients.
Taking these projects stops you from moving forward with developing your productised service. They keep you stuck where you are today.
Keep your eyes on the business you are trying to become. Not on the one you used to be.
So proceed with caution.
You Can’t Serve Everybody
These filters, among many others, simplified my life and my business. Allowing me to provide a better service and better results.
Not everybody will be a fit and that’s ok.
Figuring out who is NOT our customer was just as important in improving everything we did.
The short-term cash from these projects can be appealing. But it’s only by focusing on the long-term that we are able to build a healthy and sustainable business.
Avoid nickel and diming and you will offer a better experience that will increase how much each customer spends with you.