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    Strong differentiation #1: be faster

    Strong form of differentiation #1: Complete the work or achieve the project goal faster.Remember that weak forms of differentiation are claims that almost any of your competitors can credibly make. “We have a great process.” “We have a great team.” That kind of thing…If you can actually complete the project faster, that means several very important things to your client:They can start benefitting from your work faster. This might make them more money, save them more money, allow them to seize some time-sensitive opportunity, or improve some important situation more quickly. All good things from their perspective.If you bill hourly, you know that benefitting your client in this way harms your revenue. Them’s the breaks. There are other ways to price your work, and you’ll have to move away from hourly billing if you want to differentiate your business based on speed.It costs them less of their time and attention. All things being equal, the longer it takes you to create the desired outcome for your client, the more of their time and attention they have to divert to manage the project. I don’t know about you, but time and attention are my most precious resources. I’d bet money that many of your clients are the same.Imagine two approaches that create the same outcome:a) 1 month of full time work and your client agrees to meet with you for 4 full-day 8-hour planning meetings up frontb) 3 months of part-time work and you break those 32 hours of meetings out into 32 separate 1-hour meetings?Which approach would be better?For many clients, the latter option would be like “death by a thousand cuts” except it would be “death by 32 meetings” that could have been replaced by 4 days of intense work. Sure, it’s not easy to get 4 full-day meetings with a client, but if that’s what it takes to dramatically shorten the project I bet you can make a pretty strong argument for something like that. This particular example is just a hypothetical to help you think about how you might approach things differently so that you can legitimately claim to be faster.Time for some tough love: if the stuff you build for your clients delivers no additional value if it’s completed faster, it’s likely that what you do for clients is a commodity service. In other words, if you can’t create additional value by creating the desired outcome faster, think about changing your business to focus on something that does associate speed with value.Sure, there are times when the start of a software project needs to be delayed, or the project structured as multiple smaller projects so it can better align with some other process that’s naturally slower-moving or not quite ready yet. But your ability to get things done fast when that speed does deliver more value is a compelling differentiator.You actually can do that. Change your business, I mean. You can make decisions now that are based on objective information that you have now to make your business dramatically better in 6 to 18 months from now. It starts by narrowing your marketing focus, which I teach you how to do in http://thepositioningmanual.comTomorrow’s post is about the risk differentiator.Talk to you then,-P

    Strong forms of differentiation

    Here they are… forms of differentiation that are way stronger than the 4 weak forms I mentioned yesterday:

    1. Complete the work or achieve the project goal faster
    2. Reduce risk to your client
    3. Be easier for your client to work with
    4. Propose and deliver something that benefits their business more than what they originally thought was possible
    5. Provide better advice to your client
    6. Say no to bad ideas that your client doesn’t know are bad ideas
    7. Provide the client with additional resources they need but don’t have access to themselves
    8. Help your client spend money more wisely
    9. Include unique IP in your engagement
    10. Pricing (premium/budget, predictability, flexibility)

    That’s it for today. Print this list out and MEDITATE on it over the next few days. :)Over the next 2 weeks I’ll offer some comments on each of these forms of differentiation and examples of how you might apply it to your business. Stay thee tuned to this station!The TPM Positioning Troubleshooting Guide tells you:

    • What to do if you have many interests or previous clients and I can’t choose one to focus on.
    • Why you want to avoid “betting the farm” on a new market position and how to avoid doing that.
    • How avoiding talking to clients is harming you.
    • 7 simple questions you can use to begin providing more value to your clients.
    • And lots of other useful troubleshooting info for you if you’ve gotten stuck with positioning.

    The TPM Positioning Troubleshooting Guide is part of the Complete Bundle version of http://thepositioningmanual.com. Pick up your copy now.-P

    Weak forms of differentiation

    The following are WEAK forms of differentiation:

    1. “Our team is the best”
    2. “We care more”
    3. “Our technology choices are better/more thoughtful”
    4. “We have a GREAT process!”

    What makes these weak is that almost anybody can credibly make these claims, or they are over-used hollow claims (#2 is the primary example of this, and #1 is subject to the Illusory Superiority bias).You know that often-cited study about how WAY more than 50% of drivers in the study said they were in the top 50% of drivers in terms of skill and safety? That’s the Illusory Superiority bias at play there. Do you really believe your team (if you have one) is that much better than anyone else can put together? I mean, maybe it is… but how would you prove that?Really think about that question for a moment. How would you prove that your team is better than the competition? However you would prove that is a far better form if differentiation than merely saying you have the best team.Demonstrations always beat claims alone. Saying the Ginsu knife is amazing is less convincing than showing the knife sawing through a tree brach, cutting a soda can in half, and then perfectly slicing a ripe tomato.If you use one of the forms if differentiation above, don’t feel bad. Almost everybody starts with one or more of those but as you mature as a business owner… you can do better.We’ll look at options for doing better in upcoming posts.While you’re waiting for that, make sure you really understand differentiation. This book can be read in a few hours and will transform how you view your business strategy. Get to it: http://thepositioningmanual.comTalk to you soon,-P

    Meaningful differentiation

    Differentiation is critical, but it’s easy to get it wrong.In yesterday’s post, I told you about how I hired a cheaper contractor to build a deck and the very painful results of that decision.Part of the difference between those two contractors was how they made decisions that would have long-lasting effects on the thing they were building. In a way, their worldview was part of their difference. I suspect the same is true of you.To the cheaper contractor, crappy screws that would not last long in the harsh Oregon coast environment were functionally equivalent to more expensive screws, or even better because the cheaper screws saved him maybe several hundred dollars.To the more expensive contractor, using premium screws was part of his justification for charging a higher price for the project. For example, when he came out to give us an estimate he mentioned stainless steel screws, which are very expensive. This contractor was not going to absorb the higher cost of the premium screws; in fact he was going to pass that cost right along to me and charge me a higher hourly rate for making this–and many other similarly better–judgement calls.That, in a nutshell, is differentiation. Differentiation is the answer to the question: “How are you different than all the others out there with similar skills?”When it comes to marketing your expertise in building software, differentiation is tricky. How do you help potential clients understand that you will make dozens, hundreds, or thousands of better judgement calls that may cost more in the short term but deliver significantly better results in the long term? And how do you do this without vomiting too many technical details all over them too early on in the marketing process? And how do you focus on stuff that actually matters to your clients?By the way, a worldview that is focused on software quality is not the only effective differentiator. Speed may be another good one, or raw expertise may be yet another. I’m just talking about software quality here as an example of how you think about differentiation in general.You can’t just punt on the differentiation question. If you do, you’re saying in effect: “I can’t tell you why I’m different than the ocean of developers out there with similar skills so I’m not even going to try.” When you do that, you agree to be viewed (and priced) as a commodity. As yet another Rails, NET, Java, or full-stack developer.An effective differentiator depends on you (your way of viewing the world of software development) and your clients (what’s important to them). That’s why I can’t just type up a list of great differentiators for you here. It’s the Venn Diagram overlap between you and your best clients, and it’ll be different for every person.Why does differentiation matter? Aside from helping you stand out from others with similar skills, it helps contextualize your pricing. In other words, it can help justify a premium price for your services.I’ll continue this thread in tomorrow’s email.In the meantime, buy my book. Positioning is the absolute foundation of effective differentiation, so you need to understand it: http://thepositioningmanual.comTalk to you soon,-P

    $300 for a backpack !?!?

    I’ve noticed that when I see something for sale that has a significantly higher price than other options in the same category, it challenges part of my mind to understand why the price is so much higher.The first time I saw the $300 price for GORUCK’s GR1 backpack, I was kind of shocked. “$300 for a backpack!?!?! You’ve got to be kidding!” I literally had sticker shock.By the time I bought one a few months later after literally saving up for it, I had done a TON of research to understand if that price was justified. Along the way, I completely educated myself on that company’s unique approach to designing and building backpacks, their unique lifetime guarantee, and every other bit of their marketing message.The higher price challenged me to fully investigate GORUCK’s differentiation, and it worked. But that’s the world of B2C products, where the price is usually one of the first things you see and spending decisions are perceived more as costs rather than investments.What about B2B services, where price is custom or usually not revealed until partway through a sales conversation and the context of a good deal is getting a return on investment? How can you use differentiation to support a premium price, and to prevent sticker shock when that price is revealed?Part of the answer is that you can focus on discovering the value of that project during the sales process. If you’re not already regularly doing that, go to http://expensiveproblem.com, sign up for the Value Pricing Bootcamp there, and start learning how to.The other part of the answer is your marketing. You can market your services in a way that differentiates them from cheaper options.I’m going to give you some high level ideas now, and then drill into some more specifics in upcoming emails.Here are three basic approaches to differentiation:

    1. Understand what benefits your clients associate with premium services, and focus on that in your marketing. This could be level of touch, could be responsiveness, could be quality, could be expertise, could be almost anything else. You really have to understand your clients in order to know!
    2. Know when to say “we’re expensive” or “we’re probably going to be the most expensive option”. I know from experience you can do this artfully through your marketing message and branding, but if you’re going to literally say the words “I want you to know that we’re expensive” you should almost certainly do it via a realtime voice conversation–not via email–and you should be very careful about how you say it.
    3. Position your business as a way for your clients to get more valuebecause of your unique background, experience, inventions you’ve developed, etc.

    If you’re not sure how positioning relates to value, you definitely need to read: http://thepositioningmanual.comMore tomorrow on differentiation,-P

    2,400 rusty screws

    When I lived at the Oregon coast, my wife proved to me beyond a shadow of a doubt that she is a patient, determined badass.We had paid an out-of-work unlicensed contractor to build a deck for us. The deck was 60′ long, 10′ deep, and made from 3″ wide Ipe decking and pressure-treated wood for the support structure.The contractor was a nice guy but took some shortcuts without asking us. I think I’ve mentioned this guy to you before. There was always some reason he couldn’t work a full day. One day the reason was that his brother had shot himself in the leg with his own gun; twice.Anyway, one of the shortcuts he took was to use the cheapest Phillips-head screws he could find instead of premium ceramic-coated star-drive screws.His excuse for this shortcut was that we were paying him a flat rate for the project and he needed to keep his costs down.We just wanted the deck built and went along with it.6 months later, half of the cheap-ass screws he used were beginning to rust. This, of course, was a 100% predictable outcome of using the cheap screws.My wife unscrewed each of those screws and replaced it with a premium ceramic-coated star-drive screw that had an actual chance of surviving the 8 months of rain per year the deck would be facing for the rest of its life.I figure there are 2,400 screws in that deck: 4 boards per foot x 60 feet, 2 screws every 2′ for the length of a 10′ board = 2,400 screws.My wife went out each day for an hour or so and unscrewed rusty old screws and replaced them with new ones until the project was done. It took a lot of days. Like I said, she’s a patient, determined badass.Everything about this story makes me think about custom software projects and how you market your services.

    • We just wanted the deck built without having to care about the details of how, like what screws were used, so we turned a blind eye to some of those how choices. But… I had to actually live with the results of the builder taking shortcuts in how they built it. How could that have gone better? For example, when would have been the right point in that project for the contractor to get our signoff on the kind of screws used?
    • We had spoken to a far more expensive contractor before we hired the one we went with. How could that more expensive contractor have better communicated to us that they would not take shortcuts like using cheap screws and that it was worth paying them over twice as much? And how could they have done that without making it seem like a scare tactic?

    How do you market your expertise? How do you assure your clients you will get the project done quickly but without using “cheap screws”?If you don’t market your services because you don’t have to, congratulations! If you don’t market your services because you don’t know how to do that effectively, check out http://thepositioningmanual.com. It’ll help you with the very first step, which is defining who you focus on and what you do for them.Talk to you soon,-P

    Test: Trigger link for TPC evergreen promotion

    Here they are… forms of differentiation that are way stronger than the 4 weak forms I mentioned yesterday:

    1. Complete the work or achieve the project goal faster
    2. Reduce risk to your client
    3. Be easier for your client to work with
    4. Propose and deliver something that benefits their business more than what they originally thought was possible
    5. Provide better advice to your client
    6. Say no to bad ideas that your client doesn’t know are bad ideas
    7. Provide the client with additional resources they need but don’t have access to themselves
    8. Help your client spend money more wisely
    9. Include unique IP in your engagement
    10. Pricing (premium/budget, predictability, flexibility)

    That’s it for today. Print this list out and MEDITATE on it over the weekend. :)Over the next 2 weeks I’ll offer some comments on each of these forms of differentiation and examples of how you might apply it to your business. Stay thee tuned to this station!The TPM Positioning Troubleshooting Guide tells you:

    • What to do if you have many interests or previous clients and I can’t choose one to focus on.
    • Why you want to avoid “betting the farm” on a new market position and how to avoid doing that.
    • How avoiding talking to clients is harming you.
    • 7 simple questions you can use to begin providing more value to your clients.
    • And lots of other useful troubleshooting info for you if you’ve gotten stuck with positioning.

    The TPM Positioning Troubleshooting Guide is part of the Complete Bundle version of http://thepositioningmanual.com. Pick up your copy now.-P

    KaBoom!

    The water heater at my house blew up yesterday, and it made me think of you.My wife and I live in a smallish house with two cats and my ancient dog Malcolm. Because the house is on the small side, the gas-fired hot water heater is located in a metal enclosure outside the house. It looks like a giant gym locker that’s 7 feet tall and 3 feet wide.It’s been raining a lot here lately. When that happens, water can accumulate in the bottom of this enclosure, and if there’s enough water there it can extinguish the flame in the hot water heater.Yesterday my wife was taking a shower and heard this very loud bang outside the house.I went outside to investigate and smelled a strong burning smell, but nothing was on fire.I’m speculating here, but here’s what I think happened:Water accumulation in metal enclosure extinguished flame of hot water heaterFor some reason, gas safety shutoff didn’t kick in right away, allowing gas to accumulate inside the enclosureSome other part of the hot water heater was hot enough to ignite the accumulated gas, causing a small, loud, but ultimately non-destructive explosionThis makes me wonder if you have a “safety valve” in your business to protect you from “explosions” like clients firing you, low lead flow, projects going south, etc.There are lots of potential safety valves, but I favor the following:Multiple forms of revenue. Not a bunch of projects going in parallel, but multiple different but related ways of making money.Sufficient profitability to allow you to weather unavoidable dry spells.An excess of inbound leads so if you suddenly have availability you can temporarily become less selective in order to restore cash flow quickly.A blend of fast-acting and slow-acting lead generation techniques at your disposal so that you can shift your focus to fast-acting ones when you see a slow period coming up in a few months.You know what I’m about to say next. You’re mouthing the words silently even as you read this…All these “safety valves” are easier to build for your business if you have a clearly defined, strong market position. I’d love to help you with that: http://thepositioningmanual.com.Talk soon,-P

    Two interesting things about the New York Times

    I actually don’t know everything, even about the areas of expertise I’m 100% focused on in my business…….OK, now that you’ve cleaned up the coffee you just spit out on your phone or keyboard, allow me to explain…Of course I don’t know everything there is to know about positioning, lead generation, and email marketing for self-employed software developers. Nobody really could, even if they focused 100% on it for years like I have.But that’s really what keeps it interesting. There’s always more subtleties to discover, even when you go narrow and deep.In this email I want to direct your attention to two phenomena that are still sort of mysteries to me. I understand parts of them but not all of them, particularly why they work the way they do.Mystery #1: Email MarketingI came across an article from 2015 on Digiday about how The New York Times is using email marketing. Some relevant quotes from that article:—The New York Times has caught the newsletter fever. In the past year, it has launched a dozen of them — it now has a total of 33.But with everyone seemingly launching a newsletter these days, the Times has to be mindful of the competition for inbox attention. That has meant taking a closer look at what readers are actually interested in….“Historically, the newsletter has just been based on our sections,” said Dork Alahydoian, executive director of product at the Times. “We realized that’s not necessarily what people are interested in. So we’ve been exploring two ways of looking at it — going beyond sections to lifestyles and different themes. The other approach is going much narrower. It’s no longer a one-size-fits-all.”The Times wouldn’t say how many subscribers it has but shared some numbers that suggest its approach is paying off. Subscriber volume has grown 14 percent in the past six months, with the number of newsletter subscribers ranging from tens of thousands to several million depending on the newsletter. Average gross open rate (which, unlike the uniques open rate, which is typically lower, counts duplicate opens) for weekly newsletters is 50 percent, with some of its newer ones including Kristof’s, the Times Magazine, Booming and Motherlode have gross open rates topping 70 percent. The gross open rate for media and publishing newsletters is 38.5 percent, according to email marketing company MailChimp. (The Times wouldn’t provide its unduplicated open rates.)…Times users are twice as likely to become paid subscribers if they signed up for a newsletter first….“Inbox clutter is something we’re sensitive to,” said Nicole Breskin, a digital product director at the Times. “Because it’s so saturated, it’s important we produce something of value.”—The key takeaways for me:Times users are twice as likely to become paid subscribers if they signed up for a newsletter first.The emphasis on going narrow and producing something of value.I see similar patterns in my business when it comes to email marketing.The mystery to me is exactly why the highly saturated venue of the email inbox so dramatically outperforms other also-saturated marketing channels like social media. I think I could cook up some bullshit theories about why, but at the end of the day it’s still sort of a mystery to me. I know what works, but I’m not 100% sure why.Drip interviewed me today for an article they’re writing on people who email their lists every day.I speculated a little bit about this question with them, but at the end of the day I honestly don’t know exactly why anyone from little ole’ me all the way up to behemoths like The New York Times can make effective use of email marketing by going narrow and striving to provide value, but I do know it works.And you could be doing it too, if you’re not already. :)This leads me to the second mystery.Mystery #2: The Trust ReservoirAdexchanger published this bit of info earlier this year:—The New York Times saw its highest subscriber increase since 2011, the year the publication introduced digital subscriptions, following the November presidential election.It added 296,000 digital subscribers in the fourth quarter, up 19% from the previous quarter and a 45.9% increase year over year.CEO Mark Thompson said digital subscriptions had accelerated even prior to the election because consumers will pay for quality news products. Providing content worth paying for is part of the Times’ long-term strategy. Subscriptions now account for half of the Times’ revenue.—The broader cultural environment–at least among the subset of people who have the ability and inclination to think critically about issues like where you get your news–has included a lot of concerns about political propaganda, misinformation, and thinly veiled advertising, otherwise known as “fake news”. If you think that your problem is fake news, how do you find a solution?I theorize that you seek the “high ground” of trust. In other words, you ask yourself “who do I trust the most to not publish fake news?”. If that’s the question, then I think The New York Times is the answer for many.The Pew Research Center put this chart together in 2014:Trust Levels of News Courses by Ideological GroupThe New York Times is not the most trusted news source across the board, but if you look at news sources that appeal to liberals more than to conservatives and those that emphasize subscription revenue (this excludes a lot of the more trusted-by-liberals news sources that are purely ad-revenue driven broadcast models) you’re left with a small group that includes The New York Times.Whether or not this fully explains The New York Times recent explosive growth in subscribers, what does this imply for your business?What could you be doing to develop a reservoir of trust with your ideal clients?I’m pretty sure building up a reservoir of trust will work very well for you in the long term.The New York Times is pretty clearly focused on the audience of liberals. What type of client are you focused on serving? If you don’t know, how will they find you? How will you know when you find them? Get some answers to these critical questions: http://thepositioningmanual.com.Talk to you soon,-P

    Hawks have to hunt even when it rains

    In Sonoma County, CA where I live, there are a lot of hawks.It’s been raining a lot here lately, and I noticed today that even when it was raining some hawks were circling above an apple orchard hunting for food.The relationship between project work and lead generation activities can be so loosely coupled that we forget that we need to “hunt” for leads even when it’s raining money and you’re slammed with project work.That’s why more and more I’m recommending that my Positioning Accelerator Program students choose marketing activities that are inherently enjoyable. Fun, even.Doing this makes it easier to keep up the hunt even when it rains.Hunting for leads is 5000% easier when you know what you’re hunting for: http://thepositioningmanual.comTalk to you soon,-P