AnalyticBridge
Data Intelligence, Business Analytics
Dealing with new clients
I have received many requests for consulting help from new clients over the past 6 months. With small clients (start-ups and companies with less than 40 people), I have wasted most of my time: hours of free phone calls discussing projects, with no revenue at the end of the day. I would like to check whether you are experiencing the same problems with new, small clients:
- In a nutshell, a total waste of time
- They make you sign a NDA, you wonder whether the reason is to sue you later, since they have no intention of ever working with you
- They have no intent to ever sign a contract, they are just trying to steal IP and get free advice - particularly since we have deep expertize in a number of domains
- As a result, I no longer reply to these requests (if a new small client can't pay $1,000 upfront to jump start a project, I'm not going to even spend 60 minutes over the phone with them)
- I have plenty of returning clients and large new clients showing interest - some of them signing up, so it's fine with me (but some new large clients - Microsoft in particular - are just after stealing IP as well, and so I put them in the same blacklist)
- Being a small company myself, I face the same problem, when I ask for help: potential consultants require lots of money upfront - and since we have lots of expertize in many fields and can do everything ourselves, we no longer pay consultants: now we work very late every night, doing the job ourselves, to avoid paying absurd fees to consultants. It makes our quality of life worse, but our financial situation better. As this behavior (by small companies) becomes more prevalent, I would imagine that many won't be able to compete efficiently: when all vendors avoid you, you lack access to a number of competitive advantages.
Views: 49
Replies to This Discussion
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Permalink Reply by Vincent Granville on -
You should make your cost/revenue analysis. If you charge $100/hour per client, spend 10 hours with each client negotiating deals, and another 10 hours with 20% of your clients who actually pay you, then:
- For every 8 clients out of 10, you spend 10 hours, and earn $0
- For every 2 clients out of 10, you spend 10 hours convincing them to sign up (NDA, blabla) earning $0, then 10 hours actually working at $100/hour
You can try reducing your hourly rate, from $100 to $50, hoping that your sign up rate will go up from 20% to 60%. Also try to get more return clients -- no business can survive on new clients only, with a 0% return rate. -
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Permalink Reply by Sean Flanigan on -
I have experienced the same thing, with vetting conversations turning into non paying consulting engagements. Now that I have caught on to this, I exercise extreme caution and I am pretty frank about the value of calling my references to make sure I deliver on my promises, instead of spending about three hours explaining data driven strategies to executives.
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