Is Your Business Resilient Enough to Handle the Unexpected?

Retention as Profitability

Nikkie Achartz 0:00
We are in a very unstable climate right now, and because of that, it’s causing corporate spending pullbacks and and that is particularly dangerous for entrepreneurs that more than 20% of their revenue is generated from a single source, a corporate source that, right now is showing all indications of pullback. From a profitability perspective. You want to you want to do loss prevention, which normally is used to describe a retail shop, trying to stop somebody from stealing merchandise off their rocks. But in this can, in this context, I’m talking about like, how do we stop losing clients? So you want to protect and preserve what you already have, and one of the things you want to do that with is really establishing a high value to cost ratio, so having frequent meetings or reports that go to the decision maker that says, here’s the cost, here’s the value of what you’re getting from that cost. So this justifies so you’re keeping a very high value to cost ratio. Is really important.

Metrics to prove your value and position your business as indespensible

Gwen Beren 1:15
It’s interesting, because a lot of the new features and things like Google Analytics or Data Studio, which is now Looker studio, allows you to, like, pull in those metrics from a lot of different places into a report that it allows it to be a lot easier to be able to see from a marketing perspective, but from a lot of different perspectives. I mean, you can pull in stuff from your CRM to see how many discovery calls you had, how many you can pull in all of this data that can really set up like a business KPI dashboard for you that’s automated, so you’re not having a person who’s just in charge of populating a spreadsheet all the Time.

Nikkie Achartz 2:00
And I think when you get that data, it’s not enough just to have the dashboard. You have to turn around and have a real high touch experience to those decision makers, because that’s where you’re going to detect in those conversations, where they are in their risk tolerance. So if they’re starting to trend to a pullback, you want to be in front of them as much as possible, because you’re saying, I’m a vital piece. I’m not from nameless, faceless person that you know, provider behind this, that I can lob off really easily. You want them to have to face you, to contract your other things, to explain what those things

Gwen Beren 2:43
mean. Like you had 15 discovery calls, and you only had, you know, three closed proposals, and so, you know, where, where do we need to adjust in this, in this area? Or you had, you know, 500 visits to this blog post and no phone calls from it. And so maybe what we need to do is have an intermediate step in between, you know, people wanting to consume this information versus people wanting to pick up the phone. You know, maybe that’s that they need a workbook to lead them through the next steps and then say, okay, now I have this. Now I can give them a call, or now I can book that discovery call, or whatever.

Client Diversity to Preserve Your Cash Flow – Target market

Nikkie Achartz 3:25
You’re refining. You’re refining the process and and you have to do it without overturning the apple cart. Right, like you want to tweak, you don’t want to slash and burn, because if you slash and burn, you can’t tell what created the impact, because all of it went into it. So it’s like a doctor that prescribed you have symptoms of something, and a doctor prescribed you three new medication and pulled you off every other medication, and you end up with an allergic reaction, and you go, Okay, I ended up with an allergic reaction. I didn’t have it before, so we can at least isolate it to whatever the new drugs are, but I took three. Now I don’t know which one caused the problem, right? And because I axed out the other three, the only answer to this is to cut all three and slowly add one back in at a time, and it’s just, it’s sloppy, and it causes leaks and gaps, and it’s really cost. You don’t want to do that. Fast is not always better, you know, slow and methodical on something to determine what you’re doing. And in the end, sometimes we forget that you just need to change targets. It’s there’s nothing wrong with the offering. The target’s under pressure, so you need to pick another target to market to. Yeah. I mean, there’s just so many dynamics to what’s causing the problem, and there’s no, I know everybody wants a quick fix solution, but they’re. They don’t exist. They don’t exist.

Renegotiating Contracts & Re-entering the sales process

So staying in front of them to manage risk tolerance, and I would say, always have a fallback in them if that, if the client starts to show signs of this isn’t working, or were overextended that you give them a fallback of, well, let’s wean off. So let’s cut me down to 50% again from that one’s a loss prevention. You’re you know, something is better than nothing, so backing them down far enough and then checking in. So like, I had a client go through this where first the client was like, first my my client’s client was like, I want a two year contract. I don’t want to renegotiate this every year. Great. That was the first time we saw some inkling, after covid that somebody was willing to do a long term contract. We’re really excited. They signed it. Then apparently they forgot that they had signed a two year contract. Was they mend message? About six months later, they messaged my client and say, Well, we’re on our one year. You know we’re coming up on the one year. We only want to go by six months. And she’s like, she said to me, do you think they forgot they signed a two year contract? I’m like, Well, clearly. And then it was, oh, let’s pull back. So then she addressed it with them and said, Where would you like to cut? Where do you feel like your company can pull us back from? And they ended up going, okay, so nevermind. We’re not going to expand, but we’ll do this. We’ll leave it, but we’re only going to leave it for six months. And then she’s like, Okay. And so she met them where they were at, and then six months later, like, Okay, we’re good for the end of the year. And so what we realized was they’re gonna end up at that two year mark, but she has to re enter that sales cycle every six months, because she has to stay tolerating their risk, like, what they can tolerate in their risk, which is no more than six months, that’s that’s their comfort zone, um, and there’s a real risk, because this is going to come up at the end of the year, when we’re in such an unstable environment that she could lose them at the end of the year. So there’s just certain games you get to play on making sure they’re not the only pee in the pod, right? They’re not the only basket we’re holding eggs in, because if they wean off, and we’re already seeing a reactionary behavior from them, that’s giving us a red flag that we could lose this client. So it’s about repositioning and making sure enough new business is coming in to offset the risk of that one.

Balancing boundaries & clients

Gwen Beren 7:47
and also, like, I’m sure you could speak to kind of the other side of this weird time that we’re in, where you get a client who is really well connected and but yet, they’re going way outside your boundaries for how you like to work. So for instance, in my family, we’ve made a big effort to have, like, no cell phones from five to eight, because that’s family time on the weekends, as much as we can check our weekends so that we can spend time with a family, and as an entrepreneur, it’s, as you know, very difficult to be able to kind of hold those boundaries. And so when you get a client and you’re hoping that they’re well connected, this is going to lead to more business. And you want to be this high touch person and demonstrate that value that you’re talking about. But then at the same time, you want to be able to maintain your own work life balance, for your own sanity and mental health. You know, where’s the where it where are the lines? What should you be paying attention to when you run into a situation like that?

Nikkie Achartz 8:53
I look at it like from a two point perspective. And I mean, maybe you have other ways that you’re dealing with it. I took it. I look at it as like a two point perspective. One, it’s like the teenager throwing a fit over boundaries, but in the end, they actually secretly crave the boundaries, because the boundaries help them feel contained. So one of the things I notice is people who are not having healthy boundaries, like clients who are not having healthy boundaries, are typically in a chaos state, so they’re feeling very out of control. So by simply me putting a boundary up, they might fight at it in the beginning, but in the end, it helps them feel contained and safe, if that makes sense, like, oh, there’s a container I can bounce around in here, but I’m contained enough that I’m safe. There’s that aspect of it. The other aspect of it, okay, well, there’s three things, I guess, is, if you’re gonna treat me like this, like hangs out with like so do I really want your referrals? Because the people you’re. To refer to me are also going to be boundary pushing, and that’s not something that I want to do. So the the way I cope with it is that is a couple of ways. One, I ended up writing into my proposals a VIP package that says, Do you want me on demand? Then you’re going to pay this price tag. So and I got it. GWEN Beren, from your Yes. If yes, you can get me at six o’clock, when I’m we’re away from the phones. If you pay me, if we’re on a minimum of a $5000 or $6,000 retainer per month, or you can sign on for this. You can interrupt my space one time a month outside of hours, and you’re going to pay this price tag for that. After that, I don’t respond, and so I blend it like just so you know, from five to eight, our family has the commitment, but we are not on our phones. So it won’t matter if you reach out to me in a 911 I won’t see it because I’m disconnected, right? And I am not ignoring your needs. I am paying attention to the needs of my family, and I think that’s a really important refrain. I’m not looking at it and going, I’m ignoring you, because that can be triggering. You’re saying I’m paying attention over here, and so you’re showing them what you are paying attention to, versus telling them I’m not paying attention to you. So there’s that piece is yes, if yes, you can get to the if, and within these parameters, so within these these guidelines, but

Managing your business through the chaos state – replacing that income & using positive reinforcement

Gwen Beren 11:39
also thinking about, we were having a conversation earlier, about somebody who is working with someone who is very like frantic in that chaos state that you had mentioned there, how do you really, how do you measure, really, that social capital of, you know, seeing, is this boundary pushing, not only monetary, monetarily worth it, but is it also worth it in the long run, to be able to see, is this really, is the juice really going to be worth the squeeze or squeeze or or what boundaries do you put in place for yourself to be like, Okay, we’re doing this for six months, and if I get nothing from it, or I’m doing this for a year, like, yeah,

Nikkie Achartz 12:26
you know what’s really interesting? It because I am a behavioral profiler, you have to be careful. Because you go, Yes, I like that. And I used to say, okay, 90 days. We’ll give you 90 days to see if we can’t calm you down. The challenge that I found is that in that 90 days, we’re training them how to treat us. So if at the 90 day mark, you say, Okay, this is not a little longer worth it, or the six month mark, you go, now they’re like, Wait, what happened? Like you didn’t say anything before. So I think it’s okay to do that, but you have to choose, as Brene Brown says, You have to choose discomfort over resentment. So instead of resenting them for crossing the boundaries, you have to have the uncomfortable conversation to say, Listen, it sounds to me like all this is very chaotic right now, and it’s very destabilizing, and you’re you don’t really know where you land, and all this, it’s way outside scope. This is not how I normally do business. I’m willing to give this 90 days to see if we can calm everything down and get back to the way we tend to do business, with the caveat that after 90 days, if we can’t calm the sound, then we have to have another discussion as to whether or not we’re a fit for you. And then you have 90 days to find a way to replace that income. Yeah, and you’re and you’ve called it out so it doesn’t blindside them, right? You don’t go, what? You just go, hey. And then you know, when you’re doing your monthly check ins, to go, here’s all the conversations we have within scope and within boundaries. And here’s everything we had without and then give the positive reinforcement. If, in the first 30 days, they went outside of boundaries 16 times, and in the next 30 days they only did it eight times, you’re like, look, we’re getting better. See we’re going in the right direction. We’re gonna

Gwen Beren 14:16
be using positive reinforcement. Correct,

Nikkie Achartz 14:18
yeah, correct. Yeah, 100% and I think if you frame it not about you, but you make it about them, that’s the other thing is, you say, Listen, I’m holding this boundary, and it’s in your best interest that I hold this boundary. Because if I’m exhausted, if I’m resentful, if I have other stuff going on in my life, because I’m ignoring my other commitments. I’m not showing up for you in the way that I should be. And so it actually benefits you client that I hold these boundaries, because then when I’m with you, I am with you, I am focused, I am not exhausted. I. The team is well organized. If I need to tap the team for something I’m not now violating their boundaries. And one of the things that a lot, I don’t know if everybody in the US is aware of this, but there’s some movements, and this has occurred in Australia, and this just got passed. I don’t know. I can’t remember, what’s country. I want to say may have been the UK or one of our states passed it. I think California is about to pass it, which is employees are actually legally protected from being contacted by their employers in any way, shape or form outside of working hours. And it’s sad that we actually have to get a law for that. There’s an actual law in Australia, and so when this law came up, I want to say it is California, a Californian who’s got a friend in Australia said, Hey, this is, this is up on a ballot. Like, this is coming up. Like, what kind of impact did this have in Australia? And do you want to know what the response from the Australian was? Was it didn’t make much of a difference for us, because we’re not crazy, like you guys are. We don’t our employers didn’t violate our boundaries in the first place. The

Gwen Beren 16:22
meme that goes around where it’s like, oh, you know, Europeans the rest of the world, is like, Oh, I’m gonna take three weeks off to to recharge and relax and and then Americans are like, I’m gonna take three days off while I recover from heart surgery, and then I will be back online from my bed, yeah, and they said that

Nikkie Achartz 16:43
they’re like, we surf in the morning. We’re going out to eat at night. Um, we leave our phones at home. So even if the employer reached out, we’re not, they’re not going to get us because we’re surfing around to dinner like we’re not around. And so it was just a very interesting concept of that. So I mean, in the end, as this becomes more and more visible, it will be impossible for us to actually contact our team outside of that hour, those hours, to put out a fire. And oftentimes it’s not really a fire. It’s a fire in their mind, fire.

Gwen Beren 17:16
And I think that that’s the important part about setting a boundary is like, before they hit, before they send that message, they’re like, oh, you know, well, I did, I mean, I did this for a client last night. I was like, I wanted to work on this project, and then, you know, I couldn’t, because a website was down. And so I was like, Okay, I’m not gonna message them right now because it that’s crazy. I’m not messaging them at 11 o’clock their time to get this message like this can wait until the morning. So I think that’s part of the boundaries too. Is it? It? It sets the boundaries for everybody, which is, like, it’s not appropriate to send a message at this time of the day. Okay? Well, um, what final takeaway for people who are experiencing a lot of this, like uncertainty and behavioral changes and things like that,

Business Continuity – client diversification, banking profit from those VIP deals to be able to float the business, marketing funnel primed

Nikkie Achartz 18:03
I would say 100% we need to not put all the eggs in our basket. We need multiple clients. I think you shared earlier and when we were talking earlier, no more than 20% of the revenue. And and really, that percentage is going to be set on how, how close you’re running to break even. If you’ve got a good, healthy 20% profit margin, you can afford to lose 20% and still be okay. If you are, if you’re right on the edge, like you are making exactly the amount that you need to make to survive. Then there’s other steps you have to take into place. You need to build in a healthier profit margins. And then you need to adjust to make sure that no one client exceeds that safety net. One of the other things that strategies that can occur is you can bank it so you roll enough of a healthy profit from that client that’s sucking all of your time and resources, and you stick it in a bank account that says, if this person contracts, I now have a six month safety net. I have a six month safety net that I can generate more clients in that six month period and not lose the business. So there’s lots of strategies for how to insulate a company our business is from that type of of a situation, and it and it can be more than just get a bunch of new clients, but the goal here is, no matter what, don’t ever be fully pot committed to one client,

Gwen Beren 19:39
or even 50% committed to one client. Yeah,

Nikkie Achartz 19:42
100% but I’m just saying, like, no matter what, if you’re all your attention is going, this is a fat paycheck. I have a one client that’s making six figures from this one client, and she’s like, we still have in place that she generates one to two new clients every month because. She wants that sales process, that purchasing funnel, that pricing structure, that marketing funnel, they primed so it’s still generating. Because if you let it die completely, I don’t care if you have six months in the bank account, it takes more than six months to regenerate a funnel. So

Gwen Beren 20:17
many people in the last four months, we’ve had, like, I need new clients right now, we’re experiencing all this and like, that’s great, and it’s going to take a few months to be able to get the whole process going for regenerating your marketing. You’re not going to, like, turn on the faucet and it’s like a fire hose coming at you.

Nikkie Achartz 20:39
It doesn’t. And anybody that thinks they can go on social and just post an offer and all of a sudden all this money is going to come rolling in is is not living in in the real world, because that’s just not how it works.