In my last article I began to describe how PinPoint Positioning can lead to highly refined processes that give even greater weight to your positioning and bolster the trust that prospects have in your expertise. Refined processes can really seal the deal as you describe them to prospects.
But I also alluded to another benefit of refined processes—they can have substantial impacts on your bottom line.
If and Only If…
When you are able to refine all your processes into an overall methodology that leverages your past experience, you can build significant efficiency into your projects. And, assuming that your pricing is based on quoted project fees and not estimates of billable hours, you get to pocket the difference between the value of your fee, reflected in your pricing, and whatever differential there may be between that and your target hourly rate.
Of course, maybe I should not assume that you’re billing based on project fees. If you’re not, then the value of efficiency to your bottom line gets flipped on its head. If you bill by the hour, efficiency results in getting paid less, since your experience enables you to work more efficiently. Less money for more value—that’s not a good incentive structure. While hourly billing may be a good option when you’re just getting started, you’ll want to move toward a fee-based pricing model as soon as possible. And when you do, every ounce of efficiency translates into greater profits for your practice. If you want to think more about the trade offs of your pricing model, check out this article, What’s the best way to price your creative services?.
Once you’ve established value-based project fees, efficiencies become extremely valuable. And a refined methodology is the path to greatest efficiency. Let’s unpack some of the ways such efficiencies improve your profit margins.
Lower Cost of Customer Acquisition
PinPoint Positioning is the key to customer acquisition, period. But not only does it deliver leads, it also reduces the time needed to convert a lead into a client. Having a deep and detailed knowledge of your prospect’s industry, audience, and competitors will significantly smooth out new business conversations. You can ask more targeted questions, and draw out the answers you need in order to follow up with a detailed proposal. And such targeted questions not only make new business calls efficient, they also, at the same time, signal to your prospect your deep understanding of their specific concerns and needs.
And of course, all this experience makes proposal writing much easier. Rather than bloated proposals full of generalist boilerplate, you can write accurate, specific, and detailed proposals that get right to the point and build even more confidence in your expertise.
Capturing the Full Value of Strategy
While your focused expertise will give you insights that pertain to your client’s needs, every client and project is unique in one way or another. That’s why the early stage strategic discovery process, and all the insights you deliver from the start, are so valuable. Project fees should always reflect this. You should always charge a premium for strategy. And so the more experienced you become, the more you can charge for your strategic work. All the while, your ability to detect and define excellent strategies that identify, diagnose, and prescribe solutions will take less time.
Finally, when you repeat similar projects for similar clients, you will build efficiencies into your production process. While you would not likely recycle old designs, you will find tools and techniques that you can reuse, such as production templates and processes that also increase your efficiency and add to your profit margins.
Avoiding Costly Mistakes
Lastly, in addition to leveraging experience to decrease the time it takes to deliver value, your experience and methodology will help you avoid costly mistakes. We all have war stories of mistakes we’ve made that cost us big. We learn from these mistakes, and hopefully we don’t repeat them. But if every project you do involves new kinds of deliverables that you have not produced before, or focuses on marketing and brand problems you’ve not previously engaged in, then the risk of error is high in every project. But you can leverage past mistakes, if you repeat similar projects, and thereby minimize the risks and costs of mistakes stemming from inexperience and ignorance, then avoiding mistakes gives a huge boost to your margins.
When your PinPoint Positioning enables you to establish a focused methodology, you not only improve your sales and marketing, you also elevate your bottom line. There is really no operating principle so connected to building a thriving and profitable creative practice than moving toward PinPoint Positioning.