Refresh Austin: Getting Paid What You’re Worth in Business Development

In a Getting Paid What You’re Worth panel at Refresh Austin in November 2014, Adam McCombs, Tim Hamilton, and Anthony Armendariz shared how to discuss negotiating, choosing the right rate, and crafting retainer agreements. Here are my notes from their panel:

• How would you define “business development”? 
  • Business development is growing existing business.
  • Internal business development that your products you can create to sell, giveaway
  • External business development is work from new clients.
  • Business developments is about meaning mindful of client relationships
  • Business development is attracting new clients. 
    • Most of business development comes from the work and personalities of your designers and developers
• What’s your current strategy? 
  • Take a look at your known network, i.e. the number of people have you emailed in the last 5 years, and turn those connections into seedlings and see if they grow into opportunities.
  • If we’re going to be successful on Google, you have to be focused, niched. 
    • We focused on “Drupal” because our target customer
      knows that term.
    • It’s limiting if you want to work on other projects,
      technologies beyond a “Drupal”, for example.
  • Referrals are the biggest ways to find new work. 
    • Finding, meeting other agency owners to find new or
      overflow work.
  • We depend on others to refer new clients to us. 
    • If their clients don’t fit them–too big, too small–they
      refer.
    • We spend a lot of money on coffee, beers–we don’t spend
      money on marketing.
  • Work well with the clients and employees that you have
    because they help bring in new business.
    • Follow through on referrals you are given.
• Should you separate client manager, client executive from the
  person in charge of getting new business?
  • What we do is trial by error 
    • It’s hard for me to give up that role to someone else
      since I’ve done it for so long.
  • Yes, and you should find a partner outside of my industry that’s not rooted
    in the tech industry.
    • Establishing a connection outside of the tech is hard.
  • Project managers, product developers are more like
    farmers, introverts.
    • Sales lead developers are more like hunters.
• How do you weed out inquiries? 
  • Grammar and punctuation is important in client communication. 
    • Are they not emailing from a gmail.com account?
    • Mostly it’s finding people, clients that you can relate with and be honest with
    • They don’t have to laugh at your jokes, but know it’s a long term relationship. They have to find you funny at some level.
  • You have a limited time to generate new revenue, so make that time most effective 
    • I’ve passed on work that’s been great for another agency.
    • And I’ve worked hard to get work that didn’t pan out.
  • We use core values: 
    • We do a project together with a client 
      • If client is not willing to go into tradeoff discussions when discussing scope creep, it’s probably best to end relationship.
      • Core purpose:
        1. Find work that pushes us beyond our current skillset.
        2. Potential to provide the client wonderment
      • If we don’t get to one of those two things from a potential project, then we won’t take the client.
    • When people work with us charge a fixed monthly fee and work agile 
      • We work on a retainer
      • We work on projects that do good for human beings
• How do you get paid what your worth? 
  • If a client’s decision to work with us comes down to money then I have failed. 
    • We are don’t judged against offshore team
    • We are judged on our full solution capabilities 
      • We charge a flat rate
  • Continue to raise your rate till no one will pay you anymore.
  • Look at pricing calculator 
    • Your value is whatever it’s worth to pay it.
    • Price your rates to the market you are going after.
  • We started from 2 people to 10 in a year, so we had to figure out what company to be early on. 
    • We wanted to be a lifestyle company
    • In order to do that, we have to be flexible with our pricing structure
    • We shoot for 50% profit margin
    • We keep that cash on hand so that we can be picky about clients.
    • With money comes stress.
    • Never appear as a dollar sign to a client.
    • We don’t want to be thought of in terms as an hourly rate.
    • We aim for engagements that our 6–12 months and longer
• How do you convince a client to work with you? 
  • Usually within 30 minutes of showing our work and apps, that usually helps lead to a deeper discussion.
  • A lot of it dependability. 
    • Who will they call when there are problems?
    • Support part of business is often overlooked
  • We are going to meet our customers’ expectations 
    • Then you are going to meet their desires
    • Then meet their unrecognized needs
    • Ask your clients able visualize the success of their project?
  • We position ourselves as a partner rather than an agency 
    • Agencies are still doing waterfall process
    • Once we think we can fit with the client, we do a three month trial to see if it will work.
• What would happen if we published our rates on our web site? 
  • Probably nothing.
    • Put a lot of work into that thing, but clients don’t look at your web site.
    • Rates would collectively go down.
  • One of the approach as an agency or as a freelancer is to show little as possible. 
    • Get clients to have a conversation with you, get the facetime.
    • If you do show everything on your site, you get based on a client’s gut reaction to your site and not you or your team.
    • They will then hold what you say against what is written on your site rather than listening to what you have to say about their project.
• What are the top issues your agency struggles with? 
  • Business development
  • Finding the right talent
  • How are we get our revenue to grow
  • Creating a rainy day fund
  • Finding office space, keeping overhead low