All revenue is not created equal, and contrary to popular belief, not every sale is worth “the old college try.” Last month, I turned down $10,000 in sales, and it earned me an additional $50,000 in revenue.
Generating revenue is about calculating your opportunity cost and having the right mindset.
Most business owners believe there are two types prospects: those who need to work with you and those who don’t.
I would challenge that there are, instead, three types of potential clients.
During the past year, I established my agency coaching and support business. In the beginning, I identified a specific niche. Then, I remained focused, resulting in a 75% conversion rate. I sold prospects the products they needed and remained careful not to steer them toward what I wanted them to want.
The vast majority of my clients this past year are happy with the results from the tools and coaching I provide. However, there were some clients that saw little-to-no results. I re-evaluated those clients’ cases and looked for the areas in which I had failed them. Unfortunately, I found one consistency among them: they weren’t willing to do their share of the work.
At the risk of sounding overly confident, I’ve come to the conclusion that it’s not me -- it’s them. (You might relate to this when looking at your own clients.) This exercise helped me discover that there are actually three types of prospects:
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Those who want to work with you.
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Those who do not want to work with you.
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Those who want to work with you and are willing participants.
No matter your industry, your ideal client can’t just want it -- they must desire it.
This change in how I view different prospects led me to bring in an additional $50,000 in revenue last month. Here are two different scenarios that highlight how this change led to increased revenue:
Month A with the “close every deal” mentality:
40 new prospects X average sale price of $1,000 = $40,000 potential revenue
$40,000 potential revenue X 75% conversion rate = $30,000 closed revenue
40 prospects X one hour consulting = 40 hours
40 hours per month = $30,000 revenue
Month B with the “sell to those who desire it” mentality:
40 prospects
20 pre-screened prospects X average LTV of $3,000 = $60,000 potential revenue
$60,000 potential revenue X 75% conversion rate = $45,000 closed revenue
20 prospects X one hour consulting = 20 hours
With an additional 20 hours in my month, I was able to develop a new campaign, which resulted in $50,000 in new revenue.
40 hours per month = $105,000 revenue
As you get more specific and really hone in on your ideal client, the lifetime value of each client will increase.
Try calculating your opportunity cost. Can a change in your mindset more than double your monthly revenue? Remember: it's about quality, not quantity. Don’t just chase revenue. Seek profit.
