If you're running a business, you'll know how important income consistency and predictability are. Because you can't grow and scale your business unless you have the guarantee that you have money coming in that allows you to hire the right people and move forward. So here are a few tips to help you create income predictability in your service-based business.
Be consistent and predictable
I like to use the analogy of a mirror when it comes to business - what you put in, you get back. So in order to create consistency and predictability in your business, you need to behave in a way that's (surprise, surprise) consistent and predictable.
How? By managing expectations and offering a consistent customer experience that allows your clients to feel they're in safe hands. By delivering your services with consistent speed and quality. Or by continuously reassuring your clients that they're working with the right business. And in turn, your clients will start trusting you and stick around. If you are unpredictable, then your clients will become unpredictable. And so will your income.
Create the need for repeat purchases
For service-based businesses, this isn't easy. Services can be very intangible, and the rules of the game vary depending on the type of service you offer. But what you want to achieve here is a way for your clients to buy something regularly from you.
So if you own a nail salon, for example, you could charge £40 per visit or £120 for 4 visits - you get the idea. Or, if the type of service you offer allows you to do this, you could sell a certain amount of hours to your client every month. They will buy these hours upfront, and this will give you some income predictability. So think about creating mechanisms of repeat money in your business.
Apply for tenders
This is something that's becoming more and more popular in the UK. Organisations that are involved in the public sector will often put out tenders, which are essentially invitations to bid for a project.
As a service-based business owner, you can sign up to specific websites in your sectors and get notified of different tenders of value to you. The idea is that you apply for the contract, and if you win the work, you'll be able to rely on a consistent amount of money coming into your business every year for a certain number of years. And that's a brilliant way to create income predictability in your service-based business so you can grow and scale.
Put your clients on a retainer
How many of your clients are on a retainer? The idea here is that every month your clients are buying your time, which is, as a service provider, your most precious asset!
Why retainers? Because clients on a retainer have priority over your time and over any other ad hoc projects you might be involved in. It's a great trade-off for the consistency and predictability that you get as a business from the retainer that the client pays you. And once you have retainers in place, you can confidently hire more people to take on even more work.
Similarly, when you create a subscription, you are creating that consistency and predictability. For example, you might offer building websites as a core service. But on top of that, you could also offer a subscription. This might be in the form of hosting, email or technical support, etc. If you’re a coach, then the subscription could cover access to additional resources, training courses, or mastermind groups.
The key here is to inform and prime the client when you first sell them the initial project or core product that additional services are available to them if they wish to purchase them. They don’t have to take the offer, but it's important you let them know that they’ll get more value if they do.
'Productise' your service-based business
This means turning your services into something more tangible, like a package with a specific name and a precise goal. Say you’re a golf coach, for example. You could be selling a package designed to improve somebody's swing. You give that package a name and maybe even a sub-logo and sell it as a specific product at a fixed price. And of course, this could be one of many that you sell in your business.
Once you have a number of 'products' set up, you can then start tweaking the parameters around quantities and prices. So you could run promotions at certain times of the year in order to sell a specific amount of a particular product at a discounted price. And this gives you income predictability.
Show your clients how good you are
Now we're moving into the territory of marketing strategies that can help you create income predictability in your service-based business. And the first tip I want to share is about reassuring your clients that you're good at what you do. You can do that with reviews, testimonials, and awards, for example. This is important because often services are intangible. How do you know if you're working with a good solicitor or a good marketing consultant?
So find ways to reaffirm to your clients that they're getting great service and have made the right choice in deciding to work with you. And if you ever doubt yourself and the quality of your own services, then take a look at others in your marketplace. And if you realise there's room for improvement, this is where training, learning, systems, or processes might step in. Do whatever you need to do to ensure your clients keep coming back to you.
Embrace account-based marketing
Account-based marketing has really exploded in the last 3-5 years in the UK and around the world. And this is thanks to some amazing digital CRMs (Customer Relationship Management) systems like Salesforce or HubSpot. The greatest benefit of using a CRM tool is that it can help you manage your clients at a micro granular level. This, in turn, allows you to provide better service to your clients at a larger scale while still making them feel truly looked after and special.
With CRMs, you can create what's referred to as tag taxonomy, which enables you to create customer profiles at a more detailed level. Based on the type of client and the activities they participated in (clicked on a link, bought one of your services, etc.) you can trigger autoresponders or event invites. By looking after your clients at a much more granular level, you can create more opportunities for income predictability.
Identify and track your KPIs
Once you have your CRM tool fully set up, you can start looking at the data. When did your client contact you? Did they speak to someone? Did they click on an email link and purchase? How much did they spend? And what did they spend it on? Looking at this data and generating reports out of the information allows you to identify and measure your KPIs (Key Performance Indicators). And by looking at these numbers and how they change you can start to create income predictability in your service-based business.
Soon enough, you'll be able to say with fair certainty that if you invest X amount into a specific segment of your customer journey, you will have a specific (and predictable) impact on your sales and profits. And when you have excess profit you can consistently rely on, you can start to take more risks in your business to move forward and scale.
If you run a product-based business, check out this video about creating income predictability in your product-based business. And for more tips and inspiration, subscribe to my channel.