We bring you an article written by Naor Narkis on Facebook that really caught my attention - after doing a particularly fascinating experiment in which he tried to accurately measure the differences, effects and rewards of working with clients who agree and refuse to pay for an initial paid appointment:
The eternal financial dilemma of small business owners, freelancers and freelancers: Should you agree to meet with potential clients for a free first date or not? I think I came to a conclusion here after an experiment.
I decided to take this thing seriously and using numbers. Here's the experiment I did: for two months I took a total of 20 business inquiries. In all of them I offered to meet for a fee with the clients by default, but those who did not agree and said that they do not usually pay for a first meeting - I agreed to meet with them anyway.
This is how 20 diary sessions were created for me:
10 meetings with clients who paid about 300-500 NIS for the first meeting
10 free meetings - with potential customers who have claimed that they do not pay for a first meeting
Then I started the measurement process:
What was most important for me to measure was the income that each of the sessions provided me within a month and to find out if there was a relationship between the amount of the initial payment per session and the final amount I would receive. But I checked a few more quality parameters related to customer behavior and discovered through the numbers amazing things that completely changed the way I manage my diary.
Here are the numerical results:
The meetings that cost customers brought in 12 times (!) More profits than the meetings I held for free.
2. The customers who did not agree to pay for the first meeting and in the end also did not put in almost any money generated about 3001 TP1T more email traffic, requirements, requests to write contracts, quotes (I measured this by the time I invested in it) compared to customers who paid.
3. The highest priced deals - closed the fastest, within 48 hours of the first meeting
Here are also some fascinating qualitative results I noticed:
The customers who paid for the meeting came to it ready, with a notebook or laptop, wrote things down, came ready with clarification questions. Customers who did not pay for the meeting came for a fun day at a coffee shop or office, with no advance preparation or early goals.
2. Customers who did not agree to pay for the meeting often sent me WhatsApps, email traffic, etc. - but the second something had to be closed, they started the disappearance process (and I do not chase people)
3. Clients who paid for a first date have become clients that I like more and are more comfortable working with in the professional aspects as well.
My personal conclusions from the experiment:
1. People who refuse to pay for the cost of an initial meeting probably do not value me or my time and are therefore willing to pay zero for it. Gives up on them.
2. People who pay for the cost of an initial meeting expect to get something of value from it in advance, so the chances of them closing a deal are much higher.
3. The amount of time wasted on free meetings with potential customers is a big financial danger for small business owners as the chance of these meetings to generate revenue is low but the chance that they will waste a lot of time is very high.
Some additions and caveats:
1. Something that can make it easier: For all clients who pay for an initial consultation meeting, I say that if a transaction is closed, the amount of the initial meeting is reduced from the total amount - this is a great way to test a client's seriousness.
2. Large organizations: Sometimes it is difficult for large organizations to meet with an initial cost from a bureaucratic point of view (opening suppliers, etc.) - you can compromise here but charge the money when a deal is closed and request a Skype call before a physical meeting.
3. Exceptional: Obviously there is. Some very serious people are not willing to pay for an initial counseling session. But they are a minority. And I'm not lucky enough to fall for them, I only have a strategy and according to my strategy the likelihood is too low to generate revenue from them so it is better for me to adopt a cost collection on an initial meeting.
4. Intuition: If you have a really strong intuition that works for you (in terms of results) and you want to meet someone who is not willing to pay - do it. I do not have it and envy you, so had to work with strategy
In conclusion - I believe that this reinforces the conclusion that there is great importance in requesting payment for an initial meeting when you come to provide a complex service to a client - or to work with him on a price proposal that requires a complex characterization - our advice is to always evaluate first of all that you are coming to receive a service from him - after all" Neat demands neat fulfills"...
Want to consult about how you meet with clients - or are interested in working on your initial work meetings with clients - you are welcome Contact us - and we will be happy to help.
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