02:07: “Sales Conversation”

05:47 - Value-based Pricing Resources

06:08 - Is There an “Expensive Problem” to be Solved?  

08:32 - “Value”

10:38 - Qualifying Customers as People You Want to Work With

12:49 - Sales Conversations When In Demand vs When You Need Work NOW

20:19 - Doing Your Homework

24:01 - Pitches and Avoiding Wipe Out

36:20 - What Do You Want to Communicate to a Client?

54:02 - Demonstrating Your Value

Picks

Talk Python To Me (Reuven)
The Martian: A Novel by Andy Weir (Jonathan)
Pitch Anything Book by Oren Klaff (Jonathan)
The Reckoners Series by Brandon Sanderson (Chuck)
The Magic of Thinking Big  David J. Schwartz (Chuck)

Check out Jonathan’s new coaching services site, Expensive Problem!
 

 

Hey everybody and welcome to episode 154 of the Freelancers Show. This week on our panel, we have Jonathan Stark.

Hello.

I'm Charles Max Wood from DevChat.tv, and this week we’re going to be talking about sales conversations. I’m wondering when you think about sales conversations, Jonathan, what exactly do you think about? Is it anything in particular or –?

Yeah, definitely. For me, sales is obviously a huge thing. For me, the process, almost always, it boils down to some kind of initial contact from a prospect. I’ll do like a speaking gig or a webinar or someone just contacts me in my website or in Google search and they’ll contact me through my site and say, ‘Hey, we’ve got x, y and z that we think you’d be a good fit for. Can we set up a call?’

And at that point, I’ll usually – almost always – no matter what they’re looking for, whether it’s mobile strategy or they're booking me for a speaking gig, or sometimes people hire me to write whitepapers – that kind of thing. Whatever it is, I’ll usually respond to that email and say, ‘Yes, let’s definitely set up a call. Here’s a link to my scheduling software. You can just pick an hour. And in the meantime, in order for me to do homework for that phone call, could you just answer this half a dozen questions’.

And they’ll typically – a good customer – it’s usually a good sign when someone responds to that email by a) booking a call and doing a huge brain dump in the email, because it indicates a lot of things to me. One is that they’re very forthcoming. Two, that they’re probably feeling a lot of pain. And three, it just gives me a lot to work with. They’re already pretty engaged with the relationship.

So from there, I’ll take that research, and I will also, before the phone call, do my homework – literally do my homework by going and researching the person. I’ll go look him up in LinkedIn and I’ll check out the sites for the company and I’ll try and get a whole bunch of information, like how big do I think the company is, how many employees do I have, how many people in LinkedIn are associated with it, is there any big news about the company, what products do they – you know, I familiarize myself with the enterprise.

So that way, when we get to the sales conversation, I’m not going to be asking dumb questions that anyone can find from a Google search, and we can get straight into the conversation about why it is that they’re contacting me and what it is that they think I can do for them.

So I guess it’s a long answer – a long way of saying that a sales conversation, for me, usually starts out over some kind of digital channel and then culminates in almost always a single phone call not in person – a not-in-person meeting – almost always a single phone call after which I’ll send a proposal. So for me, that’s the entire sale cycle, almost always.

Yeah. For me, it’s very similar. I mean, it’s not – I don’t know that I would break it up into discreet parts or anything like that, and it does kind of move through stages, but there are a lot of pieces that go into it as the sales process progresses.

24] too, but a lot of times they don’t really know what to tell you, so there’s some discovery process in there.

And as you dig into those, and you figure out, ‘Ok, these are the problems I have, these are –’ you start to figure out what some of the solutions are. Then you can start putting together a proposal on how you’re going to solve their problem or what problems you think you can solve and what value it has for them.

We’ve talked about the value-based pricing. You start to dig in to what it’s worth to you, what does it cost, and then you start ironing out the details of how exactly your engagements are going to work.

Yeah, absolutely. Once I get on the phone call with them, my primary goal is to find out if there’s actually an expensive problem that can be solved. And let me even qualify that further.

I might see an expensive problem that they have just some gigantic inefficiency or whatever, but they might not care about that for some reason that’s not clear to me. So what I’m looking for is an expensive problem that they know they have that I am qualified to solve.

Typically, the conversations will start off with ‘We need you to come and we’re having our annual customer meeting and we want to have – we don’t want it to be completely inside baseball. We don’t want to – we want someone from the outside to do a general presentation that’s in our area but it’s not just us pitching products or whatever. So could you come in and do like 90 minutes, 120 minutes with Q&A, maybe a round table discussion or something on your stuff but also as it relates to our industry.’

First question that I’m going to say to that person is – it’s sort of on the service, it sounds obvious why they want to do that. It’s going to make their customers happy, or it’s going to make them seem more helpful and valuable or whatever.

But I don’t want to imagine what those things are. On that call, I want to find out how paying me dollars is going to result in more dollars for that company. And you can’t just put it out there on the table like that, but that’s what I’m trying to find out. That’s how a sales call goes for me.

So it’s all about that kind of subtle back and forth of ‘how do you get at that, do you have the right people on the call to even discuss that’. Oh, that’s another thing I’ll put in the email to, which is to make sure that there’s decision makers on the call and that kind of thing.

Yeah, I definitely agree. I mean, if you can figure out what the value is to them, and if you make the assumption – I’ve been in situations where the assumption was, ‘oh, this seems really obviously whatever to me. They clearly want me for this reason or that reason’. And it turns out that when I actually start talking to them, they were just excited to get somebody on who could do podcast; I

thought that they wanted some big technical expertise that I had and it really wasn’t that. Or they cared about some blog post that I wrote two years ago and that’s what got them excited. And so by finding out what they care about and finding out what they want, then I can deliver the value that they’re really looking for.

Yeah, absolutely. And not to turn it into a value-based show, but the word value is – I’ve never really like that word. It’s the right word to use, but the more I talk about it with people, the more I find that that word is a kind of a turn-off. Feels very sales-y or very like hand wave-y or something.

Just so people know, to me it’s almost synonymous with ROI, which I feel is much more down-toearth or something. That value, it really drives me crazy. When I’m like on the phone, when I get on that call, it’s like ‘let’s figure out’ – a typical question would be like ‘How did you find me?’ because I’m sort of multifaceted person online; I offer different services.

So it’s important for me to know where they found me – if they just sent me an email through my site, I don’t know what led them to it – ‘Did you see me at a show? If yes, what show was it? What talk was it that resonated with you?’ – so that I get clues from that about where I should go with the conversation because it could be anything. It’s like you’re almost like a shrink. It’s like being a shrink for a client. Like, ‘Tell me about your mother’.

[Chuckles] Yeah, it’s true. And you can even ask more leading questions. ‘What about that talk specifically applies here? What about that talk particularly got you excited?’ So then, you can start to really figure out, ok, they really dig this particular aspect of what I do.

And so, yeah, that’s totally helpful. Hopefully that makes sense to people. You got to figure out – you know what you think your value is to people in general.

But when someone calls you, they may have a very different idea of it. And what you think does not matter in the least; you have to find out what they think you’re valuable for. So once you start to get a sense of that, then I feel like in the same phone call, which is usually like 60 minutes, maybe 45, 45-60 minutes, another thing that I am going to try and do is qualify them as a customer that I want to work with.

And there are at least two benefits of that. One is that I end up working with customers that I actually like; that’s nice. The other thing is merely by asking them to qualify themselves as a good customer puts the shoe on the other foot, in a sense, where they contacted me and I should be so excited because here’s some company with a bunch of budget that’s interested in me and my services and what value I can add for them.

But I don’t take on that many new clients in a year; maybe like two or three. So I need to be kind of picky about who I work with because for a bunch of reasons, but not the least of which is that just my personal sanity, I want to work with people I like. I want to work with people that I’d go have drinks with because I’d probably end up having drinks with them.

At some point, we’ll probably meet in person. At some point, we might be staying at the same hotel before a conference or before an event, an integration or whatever. We’ll probably meet in person eventually and if I don’t want to hang out with you, it’s going to be torture. So I will do stuff in the call that is a little pushback-y, for a lack of a better term, and say, I’ll say something like, ‘I don’t take on that many new clients. I get a lot of leads, and what can you tell me about you guys that you think would be a good fit for me?’ Like ‘what makes you guys a good client?’ and that will –.

The sort of lizard-brain effect that has on the customer or the prospect is that ‘Oh, we’re not being viewed as a lottery ticket’. You don’t want to go so far as to look a gift horse in the mouth – I mean, it’s nice that they contacted you, but if you can position yourself as you’ve got other suitors, so to speak, and you are picky about who you work with, then it makes them defend themselves to you in a way that I think makes negotiations – once you finally get to a proposal stage – makes negotiations a lot easier and can also help reveal what expensive problem that you’ll be solving for them.

Yeah, I can totally see that. It seems like a lot of times when I talk to people about sales conversations, it’s more about ‘how do I get the prospect to actually buy in’, as opposed to the other way around. And I think the situation differs a little bit when you have plenty of leads coming in as opposed to when you have maybe just enough leads coming in to where if you land the most of them then you can make it.

Elaborate on that a little bit.

If you’re coming from a place where you’re in demand, then your sales conversations are going to be as much about ‘how can I help you’ as it is about ‘is this a good fit for me, is it a good fit for you, is it a good fit for me’. When you are in a place of scarcity, things are really slow, you’re not getting a lot of leads, you need the work, then your conversations go a lot more to ‘how do I get this work so that I can eat’.

Yeah, that is where it gets really tricky.

It’s hard because you don’t want to come across as desperate, and you don’t want to put yourself in a position where the negotiations are very one-sided. And I know people have done this and wound up taking deals that were less than ideal.

So there are two visual reactions to that. The first is that if you feel like you can close a deal by essentially undercutting yourself or giving a massive discount because you don’t care; you’re like ‘I need a thousand bucks in the next three days or I am in trouble’.

A situation like that is really bad for any kind of negotiation, because like you said, if you’re desperate, you’re going to do stupid stuff that ends up essentially prolonging the inevitable. It’s basically just putting off; you’re delaying the pain, or you’re spreading the pain out over a bigger time, because you’re going to end up with a terrible customer.

Because no matter how great the customer is, they’re always going to know that they can get you to discount, they’re going to push back on every price, they’re never be a good customer. It’ll be very hard to turn them into a good customer.

The other thing is that the last thing that being desperate or needy in any way – any whiff of desperation – you’re going to lose the deal unless you drastically offer. Even if you offer price that’s too low, you’re going to lose the deal. You have to do everything possible to remove any shred of desperation from your pitch. I don’t care if you’re going to be kicked out of your house.

The smartest thing you can do, like if you got one day left to pay your mortgage, the smartest thing you can do is sales call like this is to be a baller and just be like – just make them prove themselves to you. You don’t have to be a jerk, but just ask the question, ‘Listen, I’m picky about who I work with. What can you tell me about how you guys work with outside consultants, or whatever it is you do, whatever freelancing thing you do’ and just put the shoe on the other foot and just make them feel like, ‘Oh, wait a second. Maybe this person does have other options’.

And even though, in the case that we’re describing, even though you know that’s completely made up and every fiber of your being wants you to beg them to send you a thousand dollars and you’ll do anything for the next year if they’ll do that, that will not result in what you want, which is for them to hire you. There are other ways to do it.

In that phone call, stick to your guns; recognize that what you offer is valuable to them once you determine that that’s the case. And don’t even be too friendly in the proposal, like too many pleases and thank you’s and all that stuff. Be professional, be specific about your accountabilities and their accountabilities, and be like, ‘Ok, here’s what I’m going to do. Here’s what you’re going to do. And here’s how much you’re going to pay me for it’.

And regardless of whether you’re desperate or you’re not desperate, that’s the way to write a proposal. And then once they accept it, if they do accept it, then you’ve created a good customer for yourself. In my opinion, you writing a proposal like that, maximizes the chance that they’ll buy because you’ve positioned yourself as the price.

Yeah, definitely. It’s hard to not come across as desperate and some people can really sniff it out well. But yeah, I totally agree. I mean, if you come at them from the place of them basically doing you a favor, then they are going to treat you like you owe them. Even though you’re doing work that is [inaudible], so I completely agree.

That being said, how you come across as confident and helpful enough. I mean, for me, for the most part, I just treat all of my clients the same. I have a process, I stick to my process, and then it doesn’t come across if I’m having a slow period that I’m having a slow period.

Yeah. I think that the way to do it is – well, there are sort of two things going on there. I agree with you. Once I have somebody as a customer, they all get treated equally.

If I had to think of an exception, it would be like a particular customer has some huge deadline for a trade show that they really need something, and I’ll say to my other customers, ‘I’m going to be really busy this particular week’ – something like that. But in general, you treat everybody the same because the goal is the same. You want to have extremely high, hundred percent customer satisfaction from all of your customers because that just leads to more work.

But in the phase before that when you’re in the sales call or in the proposal phase, the way to maintain – I think there’s only one way to maintain the proper attitude, which is to almost –it sounds like, it’s like super 1980-self-help-book-y – but it’s really almost like internal personal affirmations, like, “Just save yourself.”

Assuming you had the phone call, and assuming you found an expensive problem that you can solve, you [inaudible] that. Like you found that ‘Yes, these people have a problem that is really costing them money, and I definitely can solve it’. So that’s a pre-condition. Once you’re there, you have to say to yourself over and over, ‘I can do this’.

It’s like, ‘I can do this. They need it. It’s worth money to them. I’m going to charge them an appropriate amount of money because if I don’t charge them an appropriate amount of money, like a lowball, they’re probably not going to pick me. If I’m too needy, they're probably not going to pick me. I need them to pick me. I know I can do this’. So you just got to come into it like your desperation is not going to close a sale.

Imagine if you went to them and be like, ‘You know what, I’m having a really bad month, I will give you guys – just totally on the table – I will give you guys 50% off because I’m having a bad month, so you’re going to get a great deal!’ I don’t think anybody listening thinks that will help them. That’s going to scare them away. So if you telegraph that reality, you’re also going to scare them away.

So you just have to believe. You just have to create this internal belief that the best thing you can possibly do to get out of your bad cashless situation, which is what we’re talking about, you just have to believe and just be your normal sales self, be like, ‘I’m sitting on a million bucks in a bank, why should I work with you?’ You got to write the proposal like that, you got to have that sales call like that, because anything else is going to decrease your chances of winning the deal.

So we come at it at a place of confidence and everything else. You start talking to them – in fact, let me back up because this is something that I’m not really good at. That is, when I have a client come to me, I usually don’t go look them up on the internet, and I really ought to. So how do you get good at that and what kinds of things do you go look for when you’re doing that?

Oh, that’s a question. I mean, geez, I never really thought about it out in the open like that. But I guess what I do is when they email me, they always provide a return email address and I just strip the Joe Blow ad off and I go to that domain and I’m like, ‘Ok, does this look like –’.

I’m just trying to make a sense of scale for the business from the site initially because I do practice value billing and I know that if it’s a really small, maybe a boot-up startup that’s just getting going, or just something that is like an idea that’s not a business yet, or a really small local one-location restaurant or who-knows-what. If there’s something that I immediately realize that’s there’s no possible way they could have budget to hire me, then that’s going to affect my conversation when I

get on the phone with them.

On the other hand, if it’s a multi – like a global conglomerate, that is also going to affect my approach, because I kind of don’t like working with those companies. They tend to have enormous budgets, so if you can convince them to work with you or become a preferred vendor, but that can take months. They usually require that you have special insurance, there’s a huge procurement process, they have horrible payment terms; there’s also some bad things on the other end of the scale.

So for me, it’s really about not just asking dumb questions on the phone. There’s some prequalification, like I said, but it’s more about getting on a conference call where I don’t want the CEO or the CTO to waste time explaining what their business is in front of five other people from the organization who are just like tuning out. I want everybody to be tuned in immediately so I can get on the call and be like, ‘You know, I understand that you guys are whatever – a five-million dollar company, and that you service this industry and you get these kinds of things.

Starting from there, what is it that I can do for you?’ It’s not like a spy game. I’m really just trying to make that 60-minute phone call go quicker and make myself look professional and that sort of thing. There’s definitely no rocket science to it. I’m not like seeing who’s linking to their sites or anything like that.

Right. You’re just trying to find that the places where you think you can add value and find the places where you can have the conversations, or where you can make the conversation work.

Right. So I will look for – maybe I know someone that works there and if I did, I would talk to them and be like, ‘Hey, what do you guys think you do? What kind of stuff do you think you do?’ So there’s that, as well. See what direction in to the conversation is there. If it’s a mobile gig, I’ll check and see if their mobile site is horrible or great – that kind of thing. It’s just simple basic research. It’s very specific to my industry and to the customer who might be –.

But it’s just basic like you can get into the phone call and immediately start adding value, keeping everyone engaged, and – oh, here’s another thing, it also allows you to ask really smart questions, which in my experience are some of the most convincing things you can do on a meeting like this is ask a really smart question. It’s worth talking about the kinds of things that each of us are pitching and see if there’s a difference, because I know that we’d both do different things.

Yeah, let’s go ahead and talk about that. I think there is – because I think you can talk about this – but I think what you bring is you bring an expertise in specific areas. I don’t know how much handson development you actually do where that’s mostly what I’m selling. I’m going to go and I’m going to do this work and I’m going to deliver – it’s not so much of a result than it is almost a product.

Oh, ok. So when you say product, can you just qualify that a little bit?

I have a tangible deliverable. I have code that I deliver.

Right. I would – I think that’s the prevailing mindset for people who code for a living and I’ve been a web developer for a decade, so I definitely know where that’s at. And there’s sort of easy money in being a pair of hands that types Rails, or a pair of hands that type PHP.

It’s really easy to quantify if somebody knows when they need a Rails developer that’s why they contacted you. But the problem with that is you immediately get into a bit of a commodity market and it’s getting worse. So yes, you could be, ‘Oh, I’m a member of the Rails core team’ and you can have some demonstrable expertise.

Maybe you wrote a book about Rails, or wrote a book about working for the vertical like a restaurant industry doing Rails absolute restaurant industry or something and a restaurant calls you. But all of those things that I just mentioned, the reason why they will differentiate you from other developers and raise you above the commodity pricing that you’ll end up faced with is that you’ve got demonstrable expertise.

So really, what they’d be paying for, if they’re paying premium for you, they are paying it because you are recognized expert for some reason in their industry. So you’ve got the expertise which allows you to charge your premium – probably charging by the hour, or probably Westerners are charging by the hour – but really, it’s kind of like half-commodity, half-premium based on expertise. ‘You can trust I’ve got all these clients; you can call any of them; they can say how professional I am, and how fun I am to work with, how my quotes are bullet-proof, how I do disaster recovery, everything is easily maintainable’; and you can sell all of those things, but everybody can say a lot of those things whether they’re true or not.

So the third part of a demonstrative expertise is like, ‘I do have a book. I am on the Rails core team.’ Those sorts of things carry a lot more weight. So I think over time – I guess this is two conversations – but over time, what you should do is focus on those differentiators and do more of that and you’ll end up hiring – you’ll end up hiring Rails developers that are just a pair of hands and you, as the expert, you will be attracting the clients and you can charge a premium because you’ve got a reputation that’s on the line to deliver this high, high quality end result.

You're not – before you say your deliverable is code, that’s not your deliverable. If you think code is your deliverable, then you haven’t had that proper value conversation, in my humble opinion. Because people will ask for code, but nobody wants code that’s just like, ‘Oh, thanks for the code. I’m just going to leave this in my laptop sitting here’. Right? They don’t want that. It’s not like a book. They don’t want to just read your code and be like, ‘Wow! That was great’.

They wanted to do something, so in that sales call and in the preliminary email, you will do well, you will be able to raise your fees whether you charge by the hour or not if you are asking those questions about like, ‘Ok, but why do you want me to setup this website?’ or ‘Why do you want this e-commerce thing?’ or ‘Why do you want me to setup this API?’ and the more you can do that, the more you can increase your profile, your expertise, your rates, everything.

And then you’re moving away from being a laborer and you’re moving into being an expert. So it’s kind of a cop-out because the question you ask me was ‘how do I do that if I'm just delivering code’, and I answered that by saying you can’t. [Chuckles] You have to deliver something besides code. You have to realize what you’re really delivering.

It’s totally true. I mean, ultimately, what I’m delivering – right now, for example, I’m working on a social network for one of my clients. It’s a custom thing, it’s a big project, they’ve got all kinds of plans for it, and what I’m delivering isn’t a pile of code. You’re right. I mean, what I’m delivering is I’m delivering them a new business or a new avenue or a new way of doing things. And that’s what they’re buying from me. Sure, they’re telling me what they want, but ultimately, what I’m delivering for them is something that works that does what they want.

Yes, right. So the trick – and I think that’s always the case. When somebody gets called to code, that’s always the case. The trick is to make sure it’s in the prospect’s mind consciously because if it’s the subconscious, usually they’ll come to you as like [inaudible] or whatever. I’ll speak in terms of me because I know I’m right about those situations.

So a situation with me, somebody would call me up and say, ‘I need you to retrofit this – our desktop’s site for mobile’. The first thing I’m going to say is, ‘I know I can do that. They’re probably talking to other people as well. But I’m not going to just get into that hourly rate conversation because the thing I want to avoid is – I want to avoid a situation where they say, ‘Hey, we need you to retrofit this site’. ‘Ok, my rate is $300 an hour, and that’s kind of high, but you did write the book on it, so we’ll go ahead with it’. And then only later find out that it’s either a company that’s so small it’s not going to benefit them dramatically, or it’s not just that – it’s a goal that was not thought through. So somebody said, ‘We need a mobile site’ and so the CEO drops the hammer and everybody is crazed around and they find someone and like, ‘Oh, I’ll never get in trouble for hiring this guy. He’s the expert on this’. And then, alright, if I did it by the hour, or that I’d just be going in and charging a bunch of money with no one knowing – no one involved in the transaction – knowing if there is an ROI at the end of the tunnel.

So that scares me. That scares the crap out of me, because then you end up with a situation where the customer is severely disappointed in you – maybe it’s not your fault – but they’re severely disappointed with the outcome because they lost money on it, frankly. I don’t know how that is going to go. I don’t want to be on the end of a lawsuit. I don’t want to have an upset customer. My goal is to have happy customers that hire me over and over. So if I’m not 100% sure of what the real goal is before they engage me, it’s really scary and it has a hundred other negative impacts on my business that we’ve been bringing up, which is that your commodity, that you're like a pair of hands, et cetera, et cetera.

Yeah, I think when I approach coding projects I tend to sell the end result that they want. So I’m not selling them a pile of code, I’m selling them a solution to their problem. But when it comes right down to it, I’ve always thought of the end product once I start building it because that’s – when I get into the thick of it, that’s what I’m doing is this chunk of code that does their thing.

At what point do you have that conversation? Is it before the proposal or is it part of the, ‘Ok, you got the gig. You’re going to be like whatever invoicing us weekly in arrears for your hours. Now, let’s start talking about what we want you to build’.

I do all of that before. So the deep dark details, the nitty-gritty, ‘Ok, that needs to –’, like the little behaviors, the small details, I usually don’t go into that. But I do get a pretty comprehensive view of what the project is and what it means during the sales process, because I want to make sure that it’s something that I can do. I want to make sure it’s something I can do well, it’s something that I can deliver on time, and I want to make sure that I understand exactly what their needs are, so that if I need to bring somebody else in, I can.

I’ll keep going on that, which is you want to also understand if the technology choices – even a good one in the first place, and you also want to –.

I have turned work away because it wasn’t a good fit for toolset that they’d picked, and because they weren’t willing to bend on that particular set of tools.

Right. That happens to me a lot. When people come in, they already know what they want – whatever. ‘We want a sense of touch, or we want response of web design’, and it’s like ‘Why?’ And if they’re not willing to be flexible on that and I don’t think it’s a good fit, then I’m not going to get involved with it. It’s a huge red flag.

You’re just asking for trouble at that point.

Right. And to take it back to your earlier conversation. But what if I need the money; and then, ok, I’ll take the gig because I need the money. But it doesn’t change the fact that it’s a bad gig and it’s going to end up horrible, and it probably would’ve been better for me to continue rolling the dice waiting for a good client, because it’s just accruing future debt by pulling in a bad project that you know is bad.

Yeah. Hi guys. I just was able to join now; this is the last few moments. Yeah, I’ve definitely been there where I’ve taken projects because the money seemed good and I wanted it and I said, ‘Yeah, I know there are all these problems, but I’m sure we can work it out, and they can’t possibly be as crazy as they seem, it can’t be possibly be that the things will be as bad as I think’.

And of course then, yes, those things are all possible. [Chuckles] And yes, they could be all that crazy. And yes, they do really pay you not on time. But the thing is, it takes a while for that to make itself clear, right, or maybe not if you have clearer eyes at the beginning, or clearer vision at the beginning. But it’s only after the first payment is late, or I know I should be getting payment in advance, which I’ve started doing; it’s like magic.

I just # – I have a new client where I said, ‘Well, you have to pay me in advance’, and they said yes. Oh my god, I can’t believe it. Right, that just removes that problem right away. But if you have easy clients, then recognize that it’s just going to cause you pain. And even if it doesn’t cause you pain in the first month, the breakup will be so painful and so time consuming that it’s probably not worth it.

It could put you out of business. I’d rather be late on my mortgage payment than have a nightmare client for six months that could potentially just sue me in the end and completely obliterate my business. I’d rather borrow the money from my parents or something. It’s like I recognize that it’s a very painful and embarrassing situation when cash flow gets tight – I’ve totally been there and I’ve totally done the wrong thing sometimes, and it just burns you every single time. So the moral of the story is keep some freaking money in the bank so you don’t have to put yourself in that position. But if you do end up in that position, find another way to cover the cash flow, because taking on bad clients just leads to more bad clients.

04]

Go on, go on.

A friend of mine, he did a fixed bid on a project, and it turned out that he had severely underbid it, but he needed the money right away. And yeah, he was explaining to me how it completely wiped him out. So in order to avoid getting completely wiped out, he took a gig that eventually wiped him completely out. And it was just because the client wasn’t a great client, the project wasn’t a great project, and he was so desperate for it that he underbid it. You can’t afford to do that.

Yeah. It’s either going to result in a nightmare client or you losing a good client, because underbidding or being needy or desperate, it’s you’re just going to lose you the good client. And it’s going to attract the bad clients. The bad clients are the ones who will ignore that, the ones who want to compete on price. They’d be like, ‘Ah, this guy is desperate. We can nickel and dime him down to nothing and then fight over every invoice, and he’ll give it up because he’s desperate.’ It’s not just – you can’t negotiate from that standpoint. You just can’t. It’s a downward spiral that you’re better off solving in a different way. I recognize it’s a major problem when you’re in that situation, but solve it a different way; don’t solve it through your clients.

One thing that I want to ask then, because we are talking about sales conversations here. So we’ve put up a bunch of don’ts, we’ve put up a bunch of dos, but what do you really want to communicate to the client? Let’s say that you have found out from them that they are a good fit, that it looks like they’re going to work out splendidly, they're going to pay all their invoices on time, their work is going to be challenging and good in a fun way, and it’s the type of work that you’ve been dreaming of doing, what do you need to communicate to them to make it kind of like a nobrainer to hire you?

I’ll give you a specific example; it’s very fresh in my memories. Last week, I got a random email through my website from a software company that I’ve never heard of who wanted me to come in and do a talk – an internal talk – in an event they were having.

That could be anything; I’ve done this for the Federal Reserve, and I’ve done this for new ones, just little – some startups, some gigantic government organizations. So you have no idea what their expectation is or what they're getting into, you have no idea how complicated it’s going to be, how much – you have no clue. So I’m like, ok – so I do what I said before.

I’m like, let’s see what this company is. Ok, it seems like a successful small software business – small to medium software business. I’m trying to get a sense of how many employees – that kind of thing – and trying to learn their vertical a little bit just so I can ask smart questions when I get on the phone. So I’m like, ‘Great. Could you just answer this half a dozen questions about your business and the event itself and how many people are going to be there? How long would I be expected to on stage? Is it a more of a workshop or a panel –?’

Like details; like paint me a picture of what it’s going to be like when I get there on that day. And I click on this link and I pick an hour for my schedule; whatever is convenient. And as we get on the phone call, it’s the president of the company, the lead developers, the CIO, the high-level smart developer guy, and I think there's also a marketing type person there or possibly the person responsible for organizing the event.

Weirdly, when we get into the conversation about their product and they were explaining to me about what the product was like – and it’s a software product, and it’s for mobile, and it’s bankingrelated and all these things – and I’m kind of listening and taking notes, but I wasn’t sure what it had to do with anything. It was like, ‘You’re not asking me to pitch your product to people, right? How is this relevant?’

But eventually, it became clear, after extensive questioning ‘why do you need me to come and talk about that’ or ‘why do you need me to know about that’, and eventually, it became clear that the product that they have is sort of in my wheelhouse. It’s like kind of a phone gap type of mobile application, native hybrid application mix.

Once I understood that, it was like the first 30 minutes of the phone call was kind of a waste, because it was basically a long lead up to why they found my name, but I didn’t know that while it was happening.

So then, ok, I came right out and said, ‘Ok, I understand now why you picked me’ and why they had noticed a couple of talks on my site and they were interested in these talks. ‘Doing something like that for this event, can you tell us about those talks and what the content is like?’ So I did that real briefly, but I was like, I finally came out and said, ‘What’s the goal of this event? Like if it was like a homerun, like if I came in and just knocked it out in the park, what would I have to do to make it like a huge win for you guys?’

We could’ve talked all day long about details about where it is, and what time I was going to setup, and what was going to be in the talk, and do I have a Mac or pc, and do they have a projector that – all those little details – but all I really needed to know was ‘Why do you want me to do this? Why would you spend –’ and I always say this – ‘why would you spend all the money to have me come up there to do a talk like this? There’s got to be some kind of an ROI for you’.

And weirdly, the guy said, ‘No, not really. We just want to make the customers feel like they don’t – that we’re not just pitching products to them all day long. We want someone from the outside to come in and be like an outside expert that is of a like mind with us’. So I was like, ok, so what he’s really saying is that is a sales thing, but they want a sales thing that’s not coming from their sales people, right? So, I’m like, ‘Ok.’ And they barely shared with me who their customers were and they're gigantic. So I was like, ‘Ok’.

So basically, I’m doing a sales thing for them for huge customers, which presumably are paying fees that are in the six, five and six figures, for sure. Alright, so then when you turn around and look at it, it’ll take me eight hours – tops. There’ll be couple of phone calls leading the prep and blah blah blah.

I said, ok, I got all these information; the proposal is where the answer to your question comes from. In the proposal, the information that I wanted to convey to them is that I do professional speaking all the time. And I’m not going to say to them, ‘I do professional speaking all the time’. What I’m going to do is I’m going to demand of them certain things that a professional speaker would demand.

So in the proposal I said, ‘Thank you very much for this opportunity. I think this is an important event. It would be great to meet you and great to meet your clients, and I’ll look forward to having a very successful relationship. Ok, great’. Here’s the pitch. ‘Here’s what I’m going to do. I’m going to come to town the night before because I don’t want to risk any possibility of being late for this important event. I want to arrive as much as an hour or more early for the event. If you have someone on site that can let me in, I want to meet with a dedicated AV person. I want to –’ all of these things; all these things that they're probably not thinking up because they don’t think about doing professional speaking events all the time.

They don’t normally put on events. So the thing that I want to convey by demanding things of them, what I’m conveying is that, ‘I do this professionally, you can trust me, you’re not taking a risk with me because I’m telling you how to put on your own event. Here are the things that you need to do to satisfy the speaker requirements’. And so that goes for that. And at one point, I was like, ‘Can you – I want to stay at the closest four or five-star hotel near your location’, which conveys to them that it’s very important to me to be close to their event; I don’t want any weird unexpected delays. And also conveys to them that I’m not going to stay in a motel six that I’m accustomed to. Be a little prima donna at it. Be like, ‘I’m accustomed at staying in a really nice place, just like I’m sure all your customers are going to be staying at, so let me know where that is, et cetera, et cetera’.

So far, what I’m conveying is I’m an expert public speaker, we’ve already determined on the phone that I’m a domain expert for what they want me to talk about, and now I’m saying I expect to be treated like an expert and not like someone who’s just going to stay at a motel six. I’m not doing that. I’d rather not do that gig. So that was all very clear and then by the end, it’s a hundred percent clear what’s going to happen. It’s a hundred percent clear that what they're getting into and what I’ve done, I think, hopefully what I’ve done is completely minimize any sense of risk about hiring me by the time they get to the end of the proposal.

And at the end of the proposal, it’s like, ‘And here’s the price’. So by that time, all I’m hoping is that they’ll look at the price and be like, ‘Oh, I thought it was going to be more’. But if I just said to them, ‘Yeah, I’ll show up, I’ll do two-hour phone calls before, I’ll show up for four hours before, then I’ll leave’, they’ll be thinking ‘Oh ok, like six hours. Maybe if you charge like 500 bucks an hour, it would be whatever. You know what I mean?

You’re setting expectations not only as a domain expert, but as someone who deals with large companies and have the expectations of the large companies’ most high-ranking outside consultants and advisers also expect. And so they're putting you – they are psychologically putting you in a category of their fancy lawyers, fancy accountants, fancy other advisers rather than, ‘Oh yeah, the programmer we hired for a few hours to get some mobile information from’.

Exactly. You nailed it.

So I have some proposer’s remorse. I don’t know what you called that, but –. [Chuckles]

That’s seller’s remorse.

Basically. So there's a company that recently reached out to me to do some training on site for their folks. And so I just kind of pulled together and I said, ‘You know what, here’s what I’ll talk about, here’s what I plan on doing, here’s what I’d like to cover, here’s some of the things that I would like to do in order to make sure that it’s a valuable experience for you’, but what I didn’t put in there was I have to fly on this specific airline, and I’m going to stay in a hotel, and basically what you did while I’m doing this training and basically put across I’m a professional and you need to treat me like one and oh, I do this all the time and even though I’ve done this a few times, but not on the level that they’re talking either.

So by acting that way, I wouldn’t have had to necessarily tell them I haven’t done this a zillion times. But I could’ve come across as somebody who was professional and expected to be treated that way.

That doesn’t sound – I wouldn’t call it remorse level. I mean, I suppose it depends on the –.

I know, but I wish I had done something different. That’s what I’m saying.

You don’t want to be a jerk, obviously. You guys all saw Elf, right – the movie Elf – with the scene where Miles demands that they be picked up in the airport in a Mercedes that is exactly 72 degrees interior temperature. You don’t want to be that guy. [Crosstalk]

I could’ve said I wanted to fly Delta form Salt Lake to Atlanta, and I want to be put up in a hotel, like you said, so that it comes across as ‘this is the way I do it’.

Let me add one thing that I didn’t explicitly say. I asked the question about the four or five-star hotel, right? But I don’t make them pay for it. Like at the end of the quote, I say, ‘Here’s my fee. This fee is one hundred percent inclusive of all travel, lodging and administrative cost, and you will not pay a dime over this fee for anything that happens on the way’.

The four-star hotel thing is – they are not expecting me to say, ‘I’m going to pay for the hotel’ – so the point of the four-star hotel thing is to say, ‘I am a pro at this. I’m old, for god’s sake. I’m almost fifty. I’m not going to fly around and stay at a crap hotel in my twilight years’. So it’s about that. It’s about setting an expectation. And then you get into the bottom and I let them off the hook for the price. It’s rolled down to the fee, so they don’t have to worry about it – the fees raised. I mean, they are paying for it, but the point is that it’s not going to be – they don’t have to worry about that getting the expense report and like, ‘Oh my God, he had three bottles of champagne the night before the show!’ [chuckles] and all that stuff.

travel, hotel, food, the entertainment, everything. You don’t have to worry about anything with me. Just send me the check and you can forget about money with me’. But the point of the hotel is more about making – it’s preventing sticker shock later.

Yup.

And that initial impression you give people can definitely be a challenge for me. I was just recently doing some training for them, and they asked me how much I charge. And, of course, I have the amount that I charge – in Israel, but this is going abroad and I sort of hedged a little bit and I realized that if I had been much more confident and stayed in a high figure and say, ‘This is what I expect because I’m really good at what I do, it would’ve [inaudible] as much better instead of me saying ‘Well, this is my charge here, but I probably charge more elsewhere’. Better be confident and high and wrong, than demonstrate a lack of confidence, I think. And of course I realized that after the words left my mouth.

How did that question get raised? That’s interesting. Can you describe that situation?

Basically, I’m talking to – I’m now doing – that’s a month ago – I’m now doing training on my own instead of doing it for a company in Israel. And a company abroad contacted me and said, ‘Hey, we’re interested in having you to train through us’. They were very impressive; I really like them, and I think I’m going to end up doing work for them, or whichever to describe it. I’m continuing to negotiate with them and talked to them about all sorts of things. But they said – one of the questions was, ‘What’s your training rate? What’s your daily rate?’ and I told them what my daily rate outside of Israel. And I did say, ‘If I’m going to go abroad, I’m going to have to be compensated more for that’.

27] in Israel, well obviously I don’t want to mess with your margins, but at the same time, I can give you a lot of value’. So not only did I say things that I thought were stupid, but then I sent an email which I think is stupid, and now I’m thinking, ‘Ok, I’d better knock the socks off of them in my next two conversations and then we can reach a higher rate’.

But truth be told, I think if all works well, then I’ll make lots of money and I’ll make them lots of money, which is of course my goal. My goal is not to – I’m totally ok with them making lots off of me if I’m also doing well. My goal is not to sort of stiff myself. And the lack of confidence that I demonstrated – it’s funny because it gets so long for me need to think about how much do I charge for outside of Israel because I just haven’t done it for – I don’t know – years. Other people have been pricing for it for me. [Crosstalk]

So for people that are listening, this is actually – I’m glad you brought it up because this is a pretty common situation where someone puts you on the spot. It could be in a product, it could be in an initial sales call or someone is like, ‘Can you just give me a ballpark’ or something like that and they’ll put you on the spot. And if you don’t have an answer ready, do not answer. Just be like, ‘Oh well, we can talk about that’. It’s different for different things. When somebody says, ‘what’s your hourly rate or what’s your daily rate’, I say I don’t have one, and just be like, ‘Ok, how do I know how much you charge?’ and I’m going to be like, ‘It depends on what you want me to do. I don’t know what you want me to do yet.’ Just avoid answering that question in a polite way.

The funny thing is I was convinced I did have an answer, because I’ve now been telling everyone, ‘This is my daily rate; four courses, [inaudible 51:03] courses, twice that; for eight courses, 4 times that.’ But in a situation that I sort of hadn’t anticipated, but as I thought things through, I said, ‘Huh’.

Actually, first of all Israeli companies are cheapskates, another company’s going to pay more. And second of all, I mean, I guess I’m not as old as you, Jonathan, but thankfully you joined the show, so I don’t feel like the dinosaur right around here or the only one. But I also like, as much as I enjoy the travel, I enjoy being with my family more and I don’t want to put burdends on my wife and on my children. And so if they're going to get me to go abroad, it should really be worthwhile for me.

Let me put words in your mouth for the next time. Next time you’ll have an answer because you have thought about it, but you could have said something to position yourself for a large quote later by saying something like, ‘My domestic rate for in Israel is this. But I never go out of country. I never fly internationally because I’ve got a family. It’s just not worth it to me. So you’d have to pay some astronomical amount of money to convince me to do that’, and just leave it at that. And just leave that idea in their head.

It’s not manipulative; it’s honest because like what you just said, I’m in the same boat. I’ve got little kids. I started late. So for me to leave town overnight, even locally, is a major undertaking in terms of baby-sitting coverage – it’s a pain in the butt. Any overnight gig is sort of parabolically more expensive than a one day in town gig. I’ll [inaudible] you three hundred bucks to go to your office if I can get there and back in twenty minutes, but if I have to go to Montreal or whatever, if I have to pull out my passport, it’s kind of like a – I don’t have a fee schedule for it, but it gets exponentially more expensive the farther and longer away I am going to be from home because my cost goes up. So I have to charge accordingly.

Right. In this particular case, they knew that I’d been doing training abroad and I didn’t want to sort of drag up the whole, ‘Oh you know, I stopped working with the company because I felt like I should be making more’.

I mean, to a certain degree, I guess it’s obvious. I think it’ll work out just fine. But, right. And look, I’m still in the negotiation phases with them, and I think it’s going to work out very well for everyone, but [inaudible] fumbling in a foolish way, [inaudible] saying, ‘Listen, if I’m going to leave home, then it should be worth it for all of us but certainly worth it for me’, because I’m no longer willing to take the same rate flying with my family with same daily rate going to Beijing, as much as I love it there, for a week, as taking the train to Tel Aviv in the morning and coming back for dinner. It’s no longer acceptable to me.

Right. I say to coaching students all the time. Learn your lines. It’s a game. It’s like all the stuff. You know what people are going to ask you, and you got caught off guard there because you’re in a new situation. But there's no excuse for not learning your lines.

Just like – can I get back for a second on the question that somehow earlier you asked Chuck, ‘how do you demonstrate your value to people?’ I think part of it is just – I would say that almost every initial meeting I’ve had with a client, especially on development projects, but also I’m just like database optimization projects, or even like teaching projects where I come to give a course, they will ask you a question at some point that for them is like brimming and really important and if you can hit it out at a park on that, then you sold them.

So I mean – earlier today. Earlier, I was meeting with a new client, and I [inaudible] WITH them – these are people paying in advance in everything. That’s really the kind to go with. And I just saw something colossally so crazy terrible in their software.

Of course it’s wonderful I can point fingers at the previous guy who’ve been working on it. It was so outrageously, ridiculously bad and I went through very clearly, ‘These are the reasons why it’s bad’. And I think that was it. I think in those moments, they realized, ‘Ok, this is the guy we want to have’.

And so, to some degree, it’s a matter of knowing your lines, like Jonathan said, but it’s also a matter of knowing they're going to ask you a question and being prepared to answer it and not think about, ‘Are they paying me for this hour, or these two hours?’ Rather, ‘Can I really demonstrate the value I’m going to give them because it will pay for itself many, many, many times over?’

Yeah, big plus one for me – if you can toss off a simple response that’s very low cost for you that gives them huge value. That’s why I do podcast, that’s why I blog; we’re giving this away for free, right? But it’s fun and it’s not a massive undertaking. It’s fun for us, Reuven [chuckles]. But yeah, if you can deliver them value in that sales meeting, whoo, forget about it.

Yup.

I just had a meeting with a company. I guess it’s like two weeks ago or three weeks ago, and I sat with their guy. He was talking about database stuff. I talked with their guy and basically said you want to do this and that will speed up your queries, but like a thousand times. Is it ok I’ll try it? And then – of course the CTO comes in, he says, ‘So how much do you charge?’ I told him and he nearly falls off his chair, and that was the last I’ve heard of them for about two weeks. I said, well, they don’t really have the budget for it.

What do you know? Yesterday, they gave me a call to say, ‘First of all, that [inaudible] you gave us, wow! That was amazing. Number two, when can you come in next?’ [Chuckles] Right? So just by – you demonstrated the value and they want to work with you. Luckily, they gave me a softball to work on.

Yeah, there's a lot of ways you can prove your value. You directly proved it in that case. You literally directly proved that you can make their lives better. Typically, I don’t – I’m not in that situation anymore because I’m not doing that much hands-on dev for money, so what I end up doing is I rely a lot more on social proof, and then when I get into the meeting, I rely a lot more on, basically, being professional and mitigating the risk, so the sense is sort of amplified – the social proof, the external validation is amplified. For me, it’s a little more squishy, but it’s still extremely real.

Alright. Let’s go ahead and start with the picks. Reuven, do you have some picks for us?

I only have one pick this week, which is a new podcast. It’s still getting off the ground called Talk Python to Me. It’s got a lot of Python work, a lot of Python training, and it’s very nice to see that, finally, someone decide to try again to do a python podcast. They tried to do it in the past – this one seems to add some legs, but we’ll find out in a few months, I guess. It’s on Twitter @talkpython – I’ll put the – I think it’s talkpythontome.com, but I’ll put it in the show notes, and hopefully they can provide some useful information to Python folks out there. Anyway, that’s it for this week.

Alright, cool. Jonathan, do you have some picks?

Yes. I recently had two books recommended to me that completely blew my mind. One is a sci-fi book called The Martian, which I don’t think I mentioned last week – I hope I’m not repeating myself – but it’s just the most fabulous hard sci-fi book I’ve read in as long as I can remember. It’s super great. If you’ve had friends refer it to you, I second the motion. It is a fabulous book about a United States’ astronaut that gets stranded on Mars and how he deals with that situation. It’s great. So that’s one thing.

More business-oriented – another friend, Kai Davis, in fact, recommended a book called Pitch Anything by Oren Klaff, and it is a must-read business book for anybody who is persuading people in person. So if you are in a pitch meeting, or if you are doing sales meetings in person, you’re doing like what we described earlier – the phone calls that I typically do – it is just the most amazing book.

For me, it’s because it puts sort of a neuro-science behind stuff that I just know to do in gut instinct. So he was kind of like putting words to my feelings. I know, in a certain situation, I just had this gut instinct that I should say this thing next; this book absolutely breaks down exactly why I thought that without me ever having understood the underlying premise.

And if you’re familiar with Seth Godin talking about lizard brain, this guy, Oren Klaff, talks about the crocodile brain – same thing; he just have a different name for it – I don’t know which one is accurate. But for people who are trying to – whatever – like I said, pitch deals, close deals, make sales, sell clients, convert prospects, you’ve got to read this book. It’s absolutely amazing.

Very cool. I’ve got a couple of picks that I’m going throw out there this week. The first one is a book series. It’s called The Reckoners by Brandon Sanderson, and I’m enjoying that. The first book is Steel Heart, the second book is Firefight; and yeah, I like it. It’s kind of a fantasy sci-fi book series; has superheroes with superpowers. Actually, they're all super villains. And then there's a group of people called the reckoners that go and take them down.

I’ve also been listening to The Magic of Thinking Big by David Schwartz, and I’m really enjoying that, as well. It really kind of outlines a lot of things that you need to go after those big audacious things that you want out of life. And there are strategies for overcoming some of the roadblocks to that and some others ways to kind of gain in those areas, and I’m really enjoying it. I’m listening to it on Audible, but I’ll put a link to Amazon and stuff, if you want to get it that way, in the show notes.

And plus one to the pick of The Martian. It was awesome.

Yeah. I listen to it on Audible, as well. I recommend Audible, especially for that book. It was so great.

I guess we all pick Audible. That’s all I’ve got. Anything else that we should mention before we sign off? I know you're working on some stuff, Jonathan.

I am. It’s just about up – it should be up by the time this podcast goes live, so I’ll just risk it and announce now that I’ve moved – I offer coaching services for dev shops and freelancers to agencies – that kind of thing, talk about the kind of stuff we talk about on the show – and I’ve actually moved that to a dedicated site now called expensiveproblem.com. And if you went there right this second, it would be a very flaggelling pricing page, but by the time you hear this, it should full bore and there's a range of options for people. If anybody’s interested in going more in-depth on some of these things with me in a private setting, I would love to hear from you and do that.

Alright, very cool. Well, I don’t think we have anything else. We’ll wrap up and we’ll catch everyone next week.