Jay James, CEO of Big JJ, Inc. emails you about a potential consulting project he’d like your consulting firm to handle. At the end of your follow-up call with Jay, he suggests you meet with him and his senior team in person to discuss the consulting opportunity. Reaching Big JJ takes a solid half day of travel. Should you go?
Consultants frequently ask, “Should we spring for airfare to visit a consulting prospect?” The more pertinent query is, “Should we use an entire day to meet one consulting prospect in person?”
Meeting consulting prospects in person is an expensive proposition in terms of time, and results vary.
One consultant I work with built his $6 million firm almost entirely on in-person meetings. He and his senior colleagues spent the majority of their time on the road.
In contrast, I’ve rarely traveled to meet prospects while building my firm. But rarely doesn’t mean never. (If the in-flight meal includes tiramisu, I’m on board.)
The Travel Formula below includes four considerations to guide your travel decision.
[Size of Project] x [Likelihood of Winning] x [Sales Contribution] – [Value of Time]
If the result is positive, then travel to pursue the consulting project.
Otherwise, move the opportunity forward via phone, video meetings, and email.
|Size of Project||?||Give your best guess. Are you looking at $10k, $50k, $100k, $250k, $500k, or $1 million?
Do not include the value of any potential follow-on projects.
|Likelihood of Winning||X-25%||Another estimate. Do you think it’s very likely (i.e., 90%), a toss-up (50%), unlikely (10%) or somewhere between those?
Subtract 25% because you’re overly optimistic. Trust me, I know you and you think you win more deals than you actually do.
You can factor in the strength of your relationship, whether you’ve met the prospect in person before, and other influences into this one number.
|Sales Contribution||10%||As a rough rule of thumb, you should be investing around 10-20% of revenue into marketing (i.e., building visibility) and 10% of revenue into your sales efforts (i.e., pursuit of specific projects).|
|Value of Time||?||I’m not a big believer in day rates, but I do think you should have a rough idea of what a day of your (team’s) time is worth to you. Round trip to Big JJ’s site is a full day of travel time. It might even be two.
(Note, this is the reverse of the classic-but-misguided approach of determining your day rate based on your desired annual revenue.)
If Big JJ strikes you as a 50/50 shot of winning a $100,000 consulting project, and you want a typical day to produce at least $5,000 in revenue for the consultant(s) traveling to the meeting…
$100,000 x 25% x 10% – $5,000 = -$2,500
Stay at the office. Use that travel time to drum up a consulting opportunity that’s larger or more likely to close or both.
My suggestion: post this formula somewhere it’s easily accessible when the travel question comes up.
I’m curious about your experience. How much of a difference have in-person meetings made for your consulting firm?
Text and images are © 2018 David A. Fields, all rights reserved.