32 Design Client Leads in a Day?!

Designer Nick Pattison tweeted some great brand work that he and his team have done recently for Strawberry, and then later he retweeted it and said, 32 project increase in one day off of this post. Lesson: designers, show your work. Heck yeah. But also, what do I do now? I wanna talk a little bit about what you can do if you're in this scenario. If you find yourself having some great success with your agency and the service business that you run, if you're a freelancer, you start to get a ton of inquiries come in. What do you do? It can be overwhelming if you've never had success like this, and if there's a bunch of things that you might consider doing, I have a couple of words of caution for you, and then maybe a couple of options that you might not have considered now that you're in this great opportunity. The first thing that I think a lot of people will do in this scenario is 32 project inquiries coming in. If we close half of those even, that's 16 new projects. I don't have the team, I don't have the time to do all those things. So what do you do? Staff up. I would not suggest that you staff up. I've seen that lead to more sorrow and woe than it does actual success. It's really great that you have inquiries coming in right now, but you don't know how sustainable it is. So lots of agencies will staff up when they get a lot of inquiries, but then what do they do once the inquiries start to die off? Maybe it's because they raised their prices. Maybe it's because the initial buzz just wore off. Maybe you were just on a hot streak and then you got a little bit cold. Well, most agencies will then staff up and then they'll shrink down by laying off all the folks that they just hired. And it really sucks for everybody involved. It sucks for the agency owner because your company is growing and shrinking, growing, shrinking really fast, and you have to accommodate those changes. It's hard to do. It also sucks for the people that you've hired and sucks for the people that you're laying off because you just don't have the work to sustain and to keep them busy all the time. So it's not worth you spending money in your company on that. So first thing, even though the biggest temptation probably is we gotta staff up to meet all of this demand, I would suggest that you don't do that. Which kind of leads to the next option. What happens if you get 32 new inquiries? What can you do about that? Here's a highly overlooked option that I think a lot of people maybe should consider a little bit more than they normally do. You can do nothing about this. It's totally fine to have a waitlist. In fact, that actually could be something that makes your brand more valuable when there is a waitlist. Just because people inquire doesn't mean that you have to provide services to them. You're under no contract or under any obligation to do it. If you're running a really good business, you're content with the money that you're making, you have the money that you need and that you want. I mean, all of us want more money probably, but if you're good with what you've got, it's okay to say, "I'm good with what I've got." Consider this the permission to just be okay with what you've got. If you're running a really good business, it's okay to keep it that way. You don't have to grow. I know everything is about growth hacking and super growth and all that kind of stuff, and that's where unicorns come from and all that stuff, and you can run a billion-dollar company. That's great. Or you can run a really calm company that actually makes you the money that you want to live the life that you want to live, and you can basically do nothing, just add people to a waitlist. Uh, one of my favorite restaurants in Philadelphia is called Royal Sushi, and Royal Sushi has 8 seats and they do 2 seatings a night, so 16 people per night. They have a waitlist, I think it's in the hundreds or thousands. Thousands of people, to the point where there are articles on places like Resy about how to get into places like this. Now when you think about places that you can't get in, places where tickets get sold out routinely, or products that you just can't get, what do we think of those brands? We think those brands are premium. We think of them more highly because there's a waitlist, not less highly because there's a waitlist. So if you have people that are waiting to work with you, that is an awesome thing for your business. You have conquered the basics of business, which is essentially supply and demand. You have created more demand than there is the supply for. That is an awesome, awesome, awesome thing. And I think some of us get to that point, and when we reach that point and people are inquiring, we feel like we're obligated somehow that we gotta serve them, we have to do work with them just because they inquired. That is not true at all. If people are inquiring and you don't have the space, that's okay. You can refer them somewhere else. You can say to them, "Hey, we'll put you on the waitlist and you can work with us when we have time." If they wanna wait around, that's up to them. Those are the mechanics of good business. And if you can have more demand than the supply that you have, that's an amazing place to be in your business. Okay, but maybe that's not the place that you're in with your business. You struck gold, lots of inquiries are coming in, and you're like, "I really could use more cash and more money." So what do you do with that? How do you feel that? I find it very useful to run the numbers because it's easy to get emotionally overwhelmed by that. "Oh, lots of people want me." It feeds our egos. It's awesome. It's a great place to be. But if we're just working off emotions, and we're not balancing that with some of the numbers and going, okay, what is a, a good pragmatic thing that actually does help my business more than just feeding my ego, which is important. We want to feed our egos, want to feel good about the work that we do. Let's make sure that the numbers work out too. So let's just do a little bit of simple money math just to see what are the ways that you can take advantage of an influx of leads and an influx of inquiries in a way that doesn't overwhelm you in a way that takes advantage of your supply against the demand. And also doesn't grow your business to the level that you don't want it to grow. It keeps it healthy, maybe keeps a little bit of a waitlist there still. So let's run some of Nick's numbers. Um, Nick runs a studio called Primary and, uh, they do brand sprints. And if you, if we go over to the pricing page, basically they lay it out for you here. They essentially do a flat fee, $40K for a 2-week sprint to brand, and they work on one project at a time. It's pretty straightforward. So let's run some numbers and just see how Nick is doing. Now, Nick is a friend of mine and we have talked money before, but I'm not even going to use any of the stuff that he and I have talked about. Let's just go with what's going on from the site and let's try to deduce what kind of business he's running with Primary. Let's do some money math. All right, there's a flat fee of $40K and that's for a 2-week brand sprint. Okay, so there are 52 weeks in the year, uh, and, and so if we divide 52 by, 2-week brand sprints, we get 26 sprints available for the year. And that's if Nick and team are working round the clock, uh, every week of the year. They're not taking any vacation, um, which may or may not be true. We'll see. So I'm gonna just round this down just to, for the math to be easier. I'm gonna call it 25 cuz it's just easier to do some, some math, uh, in my head with the number 25 than 26. So just based on this alone, if we've got $40K brand sprints, times 25 sprints a year, then what we're looking at is a million-dollar business. Now, we can look at this million-dollar number and we can project all of our own desires and wishes and all that kind of stuff onto it. Um, but it's helpful to know what you would do with that number might be different than what Nick does with that number. So a million-dollar business, is that a good business or a bad business? On the face of it, it's like a million bucks. That's a lot of money, but it's not a lot of money if your costs are $999,000. So the profit here is really important. Now, we don't know what the profit of Nick's business is because he hasn't published it on his website. So if he's making $1 million and he's— and that's a very healthy, profitable business. If there's $1 million of revenue and he's keeping 20, 30, 40, 50, 60% of that, you know, up to 90% of that, like, that's great. That might be great. But if Nick is running a million-dollar business and he's like, I'm actually running on a really thin profit, 5%, 10%, 2%, and I could use some extra revenue here, a 32-person waitlist is pretty amazing. We could do something with that. All right. So let's run a couple of other scenarios just in case, because we don't know. Maybe one of the things that has changed from what's on the website is maybe they do 2 sprints at a time instead of 1 sprint at a time. So even just doubling this number to 50 sprints becomes a $2 million business. Right. And so, so maybe they're somewhere in the range of this. If Nick is making a million bucks or $2 million, and he's like, I actually would like to or need to or a combination of both of those things, make more money. How could you actually do that? What could you do with a 32-person waitlist? All right, so here's where the numbers come in. In order to do, let's just use this one, 'cause I think this will be a little bit simpler of an example. If you're doing 25 sprints a year, then that means you're probably not closing every single client that comes in the door. Maybe some clients, the price is too expensive. Maybe for some clients, they're not the right fit even though they're willing to pay that amount. So what you want to do is you want to calculate some conversion rate. So let's say in order to have 25 sprints, maybe Nick and team need to talk to 100 clients a year in order to land a quarter of them. So this is, this would be a 25% conversion rate if they're talking to 100 clients a year and that gets them 25 sprints a year. That seems like it could be reasonable. Typical e-commerce conversion is, is usually somewhere from 1 to 10%, but Nick runs a pretty premium brand. Um, and doing work for very specific kinds of companies. And so I could imagine that his conversion rate would be a little bit higher. I don't know for sure. Um, I could be wrong about that, but let's assume that his conversion rate's a bit higher, maybe 25% of the clients that he pitches or that inquire actually they land and turn into actual paying clients. So he's got to talk to 100 clients a year in order to get 25 sprints. So here's a couple things that Nick can do. He's got, if he needs 100 clients, Right. And right now he's got some increase of about 32 clients, right? Or 32 leads, let's say. Right. They're not clients yet. They're not paying. Um, I would say that at any given time, if you want 100 clients a year, your pipeline should have about 25% of that in it. So that's what that means is somewhere between like 20 to 25 leads in the pipeline at any given time. Right now, Nick's got 32 leads in the pipeline. And actually, if we look back at his tweet, He didn't say there's 32 leads in the pipeline. He says 32 inquiries in one day. So that could be in addition to maybe he already has 30 or 40 in the pipeline, maybe a zero in the pipeline. So I think at any given point you want to have about 20 to 25 leads in the pipeline in order to talk to 100 clients a year in order to get 25 sprints landed and sold. So Nick's got at least 32 leads. He might have already had some stuff in the pipeline. So maybe there's more than that. So what he's got is he's got more leads in the pipeline. Than he actually needs to stay at this level. When you have more leads in the pipeline, that gives you a couple of opportunities. One of the opportunities that it gives you that's very obvious is to raise prices, right? Because when you raise your price, what that means is most clients or, or some amount of clients will go away, right? Because some clients probably signed up to, to pay $40,000, whereas if you raise it to $50,000, some of those clients might go away. So if it were me, one of the tests that I would run, if it's worth it to change a couple of things and experiment with a couple of things, is I would raise the price knowing that some of these leads will go away. Some of these leads will not be interested anymore. Um, but I would try to do it in a way that gets me closer to this number. So essentially I've got anywhere from 7 to 12 leads that I'm willing to have them go away in order to raise my price. And what— so why is that worth raising the price? Well, let's take this number. You know, $40K at 25 sprints gets to $1 million just by raising the price to $50K. And we do some math on that. What, what we've got is that turns it into a $1.25 million company. That's $250,000 extra dollars for doing nothing other than just raising the price. The process didn't change. The delivery didn't change. The amount of time that it takes didn't change. He didn't have to hire new people. The cost didn't increase. Nothing changed. So just by raising a price, that's the easiest way to just get straight up profit into your company. $250,000. That's just straight profit. There's no additional cost that comes with that. So that's why it's pro— it's not just revenue, it's revenue that directly translates into profit. So just by raising the price, you add more profit into the company. Let's see what happens if we go to $60,000. If we do $60,000 per sprint, then the math on that looks like we turn it into a $1.5 million company. That's an extra half a million dollars of profit. Profit that comes into the company. So if I were Nick, one of the things that I might try is what would happen if I raised the price to $50,000 or $60,000? And the, the key here is making sure that the number of leads that go away doesn't dip below this number, right? Because he might say, all right, well, sprints now are $100,000, right? And $100,000, if we do that math, now we're talking about a $2.5 million company. That's an extra $1.5 million from where he was before, but at what cost, right? To raise the price this much might mean 32 leads go down to only 3 of them are interested in buying at $100K, and that means he might not be able to sustain this 25 sprints a year number. That's— that number might go way, way down. And if that goes down again, let's run some numbers. Let's say he's only able to sell 5 of those now a year. Now we're running a $500K company, which is actually worse than where he was before. So there's always going to be price sensitivity as you test prices going up and up and up and up. And what you want to do is you want to make sure that it doesn't dip below what you need in order to hit the conversion rate to be able to be, to be better than where you are right now. Otherwise, if he ends up here, hey, I raised my prices, but most clients went away. And so now we actually ended up making less money, less revenue not even profit, less revenue into the company than where we were before, we should have just left good enough alone. So those are some ways that I like to run numbers to make sure that you're making the right changes in your business to be able to make more revenue, make more profit, and keep that profit without changing too much, without incurring more costs, without changing your process, without having to pitch longer, without changing the sales process or anything like that. Just by raising the price, if you've got the room, Right? If your inquiries actually are above where you need your pipeline to be, to, to just sustain, now you've got the room to experiment. It's not just enough to just raise your prices. You have to be able to have the room to sacrifice a couple of leads and still make sure that you're in the target zone that you wanna be. I hope that helps. If you like videos like this, I'll make more. Let me know. Have a good day.