All Audiences

Selling advisory services is a 100% profit margin business.

You show up, sell your time, keep all the money.

Right?

Not so fast. You have to include things like:

• Your time, which is limited and valuable
• Opportunity costs (you could be doing other things)
• Sales conversations (see: your time)
• Bookkeeping and virtual assistance
• Transaction fees
• Professional development (coaching and education)
• Software expenses
• Insurance and legal
• Design, development, and other contract support you need
• Office space and equipment
• And a variety of other little things you might not be thinking about

Advisory work is a high-margin business, to be sure. But it’s not all profit. If you’re lucky, it’s closer to 70%.

Running a business is more expensive than people think—even high-margin businesses like advisory services.

Plan and charge accordingly.

I’m reading a book called Thinking In Systems by Donella H. Meadows. It’s fascinating to hear the mechanics of a system that can be applied to just about anything.

Two of the mechanics described in the book are stocks and flows.

Stock is how much of something is in a system. Flow is the change of stock, either up or down.

With a bucket of water, for example, the water inside is the stock. When water enters (inflow), the stock goes up. When water is poured out (outflow), the stock goes down.

This is the essence of a system. And there are systems literally everywhere.

In your business, when you have a lot of clients, your stock of clients is high.

But when that happens, you can get so busy that the outflow of your marketing can slow down. Suddenly, you’re not spending enough time marketing yourself.

And that means the inflow of new clients will slow down. When your clients eventually attrition (outflow), your stock of clients goes down unless you increase your marketing outflow again.

If you’re not careful, you’ll lose the equilibrium in your stock. In other words, clients will flow out faster than you can replace them, leaving you low on client “stock”.

The key to a good system is balance. To keep your flows at a pace that sustains your business at the level you need it to be.

There are at least two things you can do to optimize this process.

1. Keep marketing outflow high so you can “restock” clients whenever needed.
2. Create more leverage so you can sell more products and services without working more hours.

There are lots of ways to do these two things, but the main goal is to do both so you can keep your business’ equilibrium in check.

If you need help with that, consider joining Mindshare or working with me privately.

Do you feel overwhelmed with all the things you could be doing but aren’t?

It might look like procrastination. Or delay. Or inaction. Or even “busywork”.

You’ll notice it in your clients, too. They’ll promise massive action one day but nothing gets done by the next time you talk.

Or, a whole bunch of things will get done, but nothing from the top of the list you agreed was important.

Why is that? What’s really happening?

Chances are, you’re trying to do too many things at once. 

We all have a different threshold for what “too much” is. The less comfortable we are in a particular area, the smaller that threshold will be.

Which means we need to move slower.

When you notice this behaviour—in your or your clients—bring the focus back to a single most important goal.

Then, pick the single most important next task that will help accomplish that goal. See that task through to completion, then repeat the process.

It doesn’t have to be a perfect goal or a perfect task. It just has to be a good one for right now. 

Accomplishing a single important thing now is better than failing at several important things later.

Doing less is sometimes doing more.

Yesterday, I wrote about the risk of fractional CMO positioning.

As with many things, there is another side to the coin. In fact, there are several benefits of fractional CMO positioning.

Here are just a few.

1. It positions you as a senior leader, which you are

People with high stakes and high-value projects are looking for senior guidance to help oversee their marketing program.

A CMO title—fractional or not—implies seniority. And that’s a strong first impression to make.

2. It makes it obvious what you do

Not everyone knows what a marketing strategist, advisor, or consultant even does.

Explaining it in terms of being like a part-time chief marketing officer is a great way to articulate the type of strategic work you’ll bring to the table.

3. It implies a long-term relationship, not a “one-and-done” project

Nobody plans to hire a CMO (fractional or otherwise) for a single project or short period of time.

Clients who are attracted to a fractional CMO see you either as being a long-term fixture on their team, or at least a medium-term solution until they have the means to hire a full-time person.

Either way, longevity in your relationships can be a good thing, as long as you don’t let it devolve into an employee-like situation.

4. It allows you to create a high price anchor

My definition of a fractional CMO is one that may involve a combination of high-level strategy, some proof-of-concept tactical work, and even some day-to-day management of the marketing program.

And because of the executional nature of that work, it should be priced high—both to position you and your skills as a premium offering, but also to make your advisory tier (the one you should be selling most of) seem cheap by comparison.

And by the way, you don’t need to do any of the tactical stuff I described in my definition above. But there is a market for it, so I include that as the top-level idea.

These are just some of the benefits to a fractional CMO positioning. Overall, it can help shorten your sales processes, charge a premium, increase lifetime value, and get more traction on all your services by clarifying what you do more quickly.