(Plus Advice on How to Use This Approach to Get a JOB or Sub-Contract)
(Powerpoint Slidedeck, https://www.old.dramatispersonae.org/images/negative-cost-selling-keynote-speaking-consulting.ppt)
I teach negative cost selling–how to convince someone to buy from you by understanding their business almost as well as they do and being able to demonstrate this to them, usually with a spreadsheet. What you are trying to prove is that the cost of buying your product or service is less (hopefully a lot less) than the profits generated by it or less (hopefully a lot less) than the reduction in their costs that results from buying from you or some combination of both.
Now I use the technique myself and it seems to work most of the time. I get inquiries about doing keynote speeches and they always ask (shyly if they’re Canucks or Swedes, say, boldly if they’re Americans or Aussies), “Emma chisit, mate?” That’s Aussie strine for, “How much is it, friend?”
I could answer this way, “It’s $3,000 for me plus travel and hotels. Plus you have to add HST if you are in Canada.”
Or I could answer like this, “What’s your target group? What are you trying to achieve? Is this a fundraiser of some sort?”
Hmm, I can tell you the second answer is better… from experience.
Recently, I got asked to speak in a small Ontario town and this is what I sent them–
Cecil, here’s how to organize your keynote event–
1. Target 150 attendees at $50 each for breakfast. You should try to get a few sponsors too so it looks like this–
Revenues:
Tickets $7,500
Sponsors $2,500
Silent Auction $2,000
Total raised: $12,000 + HST
Expenses:
Speaker $3,000 (that’s for Prof Bruce)
Breakfast $3,000
Misc $1,000
Total expenses: $7,000 + HST
2. Usually you’ll give some of the proceeds to local charities. Attendees like to know that a local charity or not-for-profit is benefiting from their support. Organizers are usually able to raise at least $5k when I do these sort of things…
3. We help you with promotion by providing you with nice marketing collaterals.
Cheers, Bruce
ps. it’s always nice to let someone from general admission sit at the head table not just sponsors who pay for the privilege or members of your organizing group. The fairest way to do this (and it adds to overall fun) is to enter everyone who buys a ticket into a draw for a seat at the head table…
Alternately, the organizing committee could offer a lottery for two tickets (say, $5 per ticket or $10 for 3) with winners to sit at the head table. If they sell 100 of those with 50 people buying one ticket and 50 buying three, they would get another $750 for 2 spaces at the head table…
It is obvious that I am using a negative cost selling approach since I am essentially showing them it will cost a negative $5,000 for them to hire me.
I teach my students to use this approach when selling themselves to a prospective employer or, as my British friend and sales training guru Trevor Wilkins () prefers to say, when they are helping an employer decide to buy their services, i.e., give them a job.
My students study potential employers in advance and go in prepared with lines like, “I’ll pay you to hire me. Here’s how…” They know that if an employer is prepared to pay them $55,000 annually because they are expected to produce $110,000 in marginal revenues (the average for the company’s first year hires deduced from their financial statements), it’ll be a lot higher if, say they can show that they can generate $150,000 in new revenues and find ways to cut another $50k in costs.
In the consulting business, potential employers love hearing from sub-contractors, i.e., recent grads or students about to graduate. Why? It’s because every time consulting enterprises put another cv in their system, it’s like printing money.
They only hire sub-contractors when they have won a job and they markup their daily, weekly or monthly rates by anywhere from 15% to as much as 100%. So their cost of hiring a sub-contractor is almost always a negative cost. Money for nothing.
From the sub-contractor’s point of view, it’s often the fastest way to get experience and then a full time JOB. For the employer, it’s like a trial (try-before-you-buy) marriage.
Alternatively, many of my former students like the independence and lifestyle of being a sub-contractor so they make it a permanent condition–they develop their own website, social media presence, marketing plan, customer base, niche. And the numbers for highly prized IT specialists can get pretty big. Some of my students charge $20k a month, not the worst outcome ever.
Robin Chahal, former student and mega successful sub-contractor/consultant reports, “I am spending most of my time these days working on a large project for the RCMP. I still can’t seem to figure out how to keep my work week down to 40 hours. As a consultant, if I cost my client $1 and one unit of time, I need to make sure that client gets at least $2 and two units of time worth of benefit. If I can’t do that, I risk destroying my reputation. If I deliver, I’ll never have a shortage of work and can bill high rates. The largest mark up I’ve ever encountered on a consultant was over 1000%. IBM was billing $10k a day for a guy they picked up off the street and were paying $900 a day. I’ve done a few contracts for IBM; they sure know how to make money.”
According to Kevin Dee, CEO of
Eagle Professional Resources Inc*, “The biggest difference in moving to an independent contractor status is to recognize that you are basically now a business owner, NOT an employee. You will create business agreements with your clients (or their agencies … like Eagle) and these are NOT employment contracts. You will want to operate like a business… incorporate a company, get a lawyer, get an accountant who truly understands the independent world (they all say they do). Get business cards, a website, insurance, etc. One good resource is the accounting firm CA4IT (Wall and Associates) who have specialized in this independent contractor world for more than 30 years.”
Bloomberg Businessweek (in its annual
Design issue, April 6, 2014) reports that welders graduating from Troy, Ohio-based Hobart Institute of Welding Technology’s 9-month program are earning $17 per hour or around $36,000 annually. However, recent graduates like Eric Bankson, who plans to work as a sub-contractor for oil and gas companies in Pennsylvania and West Virginia, expects to bill $150k per year, nearly 5 times what an employee makes.
There you go, you are now a Zen master of Negative Cost Selling, even
yourself.
Whether you find work as a sub-contractor or you get a JOB, one of the things that you must pay attention to is your reputation. Nothing is more important in today’s world than trust. Rachel Botsman in her TED Talk,
Young banker Daniel Casal says, “I think Ms Botsman is completely right in claiming that reputation is crucially important in the marketplace. I see this every day given the nature of my work-life; a good reputation leads to referrals and added business. I find it a not-so-coincidental coincidence that my boss at the Bank where I work actually pulled all my social media (twitter/facebook/linked etc) before hiring me… She said she was impressed. Prof Bruce, I will have to give you a handshake since it was you a few years back when I was at another company who coached me on getting twitter and posting financial ideas there.
"Adding to that, someone bought my motorcycle via a kijiji ad, for full price ($5k), after he was able to check my facebook/twitter accounts since I have them open to everyone.
"But what really blew my mind was the concept of reputation capital and how it could secure your future whether you are in a job, working as a subcontractor or starting your own e-commerce business.”
@ ProfBruce
* For more information about Eagle, please contact VP Dave O’Brien, d.obrien @ eagleonline.com.
ps. later, I taught Cecil how to reach out to a local sports organization and do more negative cost selling. Our convo went something like this:
What I am thinking, Cecil, is ask for the suite for free. Then you either auction it off during your event or sell draw tickets, say, 1 for $5 or 3 for $10. If you offer to give half the proceeds to their Children’s Foundation (you keep ½ for to help you with the costs for your event), they’ll probably give you the suite for nothing.
So say you sell, 400 tickets at $5 each and some for $3.33 each (i.e., 3 for $10), and say the average is $4. You’ll make $1,600, half of which goes to the Foundation and ½ to the event.
Of if you get $1,600 in a silent auction, same thing–$800 to the Foundation, $800 to the event.
Capiche?
ppps. I learned to respond to the how-much-is-it question with my own probing questions from keynote speaking agent par excellence, mastermind who makes Colombo look thick as well as my coach and wife
ppps. if you too would like to book Prof Bruce for a speech for your organization or city at a
negative cost, please contact Ms Nina Brooks, ninabrooks @ rogers.com. More about Prof Bruce keynote speaking at,
https://www.brucemfirestone.com/speaker/
