Barter—Part 4: How Does It Compare to Cash?

Question from a reader: Would you ever perform a service for “trade dollars” when you can get an equivalent amount of “real dollars”?

Answer: Of course, if there is a choice, cash is usually preferable. However, I have accepted trade dollars when I could have been paid in cash. For example, the writer who was originally referred to me by a trade exchange periodically has trade dollars to spend. I always accept trade at those times because he would not be my client if the trade exchange had not referred him to me. Any time I get business from the trade exchange, I accept trade dollars from that person/company for future business. Also there are times that I am trying to build my trade dollar balance for a specific purchase (such as when I needed extensive and expensive dental work) so I would choose trade dollars over cash dollars.

I first joined a trade exchange more than 20 years. I was quickly hooked on barter and have been happily trading ever since. Just like cash business, sometimes I want more trade business … and sometimes I have more than I handle. A milder version of the notorious feast or famine cycle of freelancing. But, like freelancing, I would never give up bartering.

This whole series resulted from an e-mail exchange with a reader who wanted to know more about barter. If you want to know more, ask your questions in comments so everyone can read the replies. Even if you don’t have questions, read the comments—there are excellent ideas there from readers.

Barter—Part 3: Who Does It?

Question from a reader: What percentage of small business owners would you say uses a trade exchange? And what is the typical small business owner’s perception of the concept? I ask because at first, I really thought it was a stupid idea. I mean, who wants to go through the hassle of bartering (and pay real cash fees too!) when you can get hard cash! But now I see that the system is actually quite slick.
You have people who want to get some ancillary revenues out of their business, at relatively small cost and effort. And once you get the trade dollars, you really want to spend it quickly, because that enhances your cash flow. This dynamic actually greatly enhances the velocity of transactions in this little ecosystem, and creates liquidity!

Answer: I think a lot of businesspeople have the same reaction as you did until they learn more about barter. Although I don’t have any firm idea of the percentage of small businesses that engage in bartering through a trade exchange, my guess is that it is relatively small because most don’t understand its value.

However, I believe a large percentage of small businesses barter directly from time-to-time because they understand the value of trading goods and services rather than spending cash. The problem with this approach, however, it that two businesses needing each other’s goods/services in the exact same amount is rare so businesses who are willing to barter don’t often find a match for their needs. They may be reluctant to pay fees to a trade exchange because they don’t realize the trade exchange will bring them business—they think only in terms of how they’ve done direct trades and don’t understand that the trade exchange is a third party “matchmaker” and banker.

I know that once a company gets involved in bartering, they usually do far more than they originally expected. I belong to two trade exchanges, and there are many businesses that are members of both to get more trade business.

Of course, bartering is generally more advantageous to service businesses because they don’t have to spend money for products to sell (though their time and/or labor costs are certainly expenses). Barter is great for freelancers during those inevitable slow times—and often trade clients are willing to wait longer for a project. Businesses with very small markups usually don’t barter, because it’s not cost-effective for them to pay the trade exchange fees from their small profit margin. I think you will find a much higher percentage of service businesses belong to trade exchanges than the percentage of businesses in general.

And while small businesses certainly predominate in trade exchanges, some large companies, including major corporations, also barter. They may offer specific items—such as overstocked inventory or older models—rather than offering their complete line, but if the trade buyer is not determined to have the latest model, he can get a good deal.

You can learn more at the Web sites of the two trade exchanges I belong to: Alamo Barter Corporation  and ITEX. You can also find a good definition of the barter industry in an article at Barter News; scroll down the left column to the article: Wallach Offers Definition Of Barter Industry.

You can also do an Internet search for “trade exchange,” “barter exchange,” “how barter works,” or similar terms and find lots of explanations at sites of various trade exchanges.

Be sure to read the comments on the posts in this series to find interesting and helpful information.

Barter—Part 2: What Is the Benefit?

Question from a reader: One of the examples that you used [in Trade Exchanges] was that you had some “used plants” that you sold for half price on “trade.” However, why couldn’t you just sell them for half price, except get cash? It seems to me that cash is always better than “trade dollars,” because you can use cash anywhere, and it is not restricted to this very specific circle.

So is the benefit of a trade exchange simply a way to tap into a pre-existing pool of relationships in order to source new business (sort of like Facebook pre-internet)? Or is there something more?

Answer: The value of trade exchanges is that they bring new business that you wouldn’t ordinarily get. One of the rules of all trade exchanges I know of is that you cannot convert a cash customer into a trade customer—the point is to find new customers.

On occasion, I tried to sell used plants for cash. However, the time and costs involved in doing so made it far less profitable and far more work than selling them on trade. I had to store the plants until we had enough to have a sale. We did not maintain a retail operation—our business was strictly putting plants into commercial businesses and maintaining them for the clients. We had a relatively small greenhouse, large enough to store inventory to replace plants for our clients promptly but with no extra space to accumulate used plants. Then there was the labor involved in maintaining them, advertising costs to get customers to come out to buy, and staffing to work the sale. We were not set up to sell from our greenhouse—most of our staff worked out in the field caring for plants at client locations. Our office and greenhouse employees weren’t skilled at sales, and waiting on customers took them away from their primary duties.

Selling used plants for cash was not profitable for us, and until we started selling them on trade, we simply threw the plants away. The replacement cost was built into our pricing, and the plants had been already been expensed. However, we found that selling used plants to trade customers for trade dollars gave us additional income that was pure profit. We didn’t have to warehouse the plants for long periods of time—the trade customers understood we weren’t in the retail business and didn’t expect a large inventory of used plants. We kept a small section of the greenhouse for used plants, and our trade broker kept trade exchange members aware of the availability of these plants. Since we had customers buying used plants only occasionally and one at a time, our warehouse or office staff could handle the sales without significant interruption in their normal duties. If we ever had a significant number of used plants, our trade broker would notify trade exchange members, and we could get rid of them quickly. Selling used plants for cash involved more time, effort, and expense than we made; selling used plants for trade dollars gave us income from something that would otherwise have been thrown in the trash.

The trade exchange is a way to tap into a specific group, like your Facebook example. However, more than that, trade brokers are actively promoting trades. If I am looking for something in particular, they will try to make it available on trade, and they actively promote my products and services to other members. Just like my used plants, they help companies move specific merchandise—last year’s model when the new models come out or an item that is overstocked. Trade members always expect to pay full price—no sales or discounts, so it’s better to get the full price in trade dollars than a deeply discounted price in cash. (Selling used plants for half price does not contradict this because they were used and usually sold for less than half the price of a “new” plant.)

The ability to spend trade dollars only with members works to the advantage of members. Once members have accumulated some trade dollars, they want to spend them—building up a large balance in trade dollars is bad for cash flow. So sellers have a market that has money (trade dollars) to spend and an incentive to spend it (because they can’t pay their rent or utilities with that money and don’t want to build up a huge balance they can’t use).

The seller is always in complete control of what and how much they trade. In my plant business, for example, I offered plants and standard containers as well as maintenance service for full trade. Anything that I did not normally maintain in inventory (expensive brass containers, for example) required cash. Trade exchanges want their members to be successful so they continue as actively trading members so merchants set the terms of what they offer on trade. However, the trade exchange does want this spelled out so they can tell members what is and what isn’t available—no surprises for a customer expecting to buy on trade and being told they can’t.

Members can also go on standby and not accept any trade business. If a business makes a very large trade sale, they may go on standby for awhile until they spend down their trade balance. Maintaining a balance of trade and cash business is important. Trade business should never be too large a percentage of business or create cash flow problems. It should be an addition to business and help with cash flow.

Also, for big ticket items (the specific amount varies among exchanges), the seller can accept part trade and part cash.

The key to successful trading is to join an exchange that has members offering products and services that the individual or company wants or needs. Services are usually more readily available than products because a professional who has any open space in their calendar can generate income from time that would otherwise be lost as far as income is concerned while merchants have to spend cash for product inventory. My doctor, dentist, and CPA are trade exchange members, and I have used the doctor and CPA for more than twenty years—all on trade. However, my husband has a favorite mechanic and won’t let anyone else work on our cars, so we don’t use any of the mechanics available on trade.

Most trade exchanges have lots of advertising available because once the minute is gone, the radio station has lost its income potential. Once the newspaper is published with no advertising on a page, there will never be another opportunity to sell advertising in that issue. So advertisers are motivated to accept trade dollars for unused time/space (and they almost always have some time/space that is unused). Spending trade dollars on advertising to generate cash business is a wise investment.
Trade business can also lead to cash business in other ways. One of my current clients was referred by a trade exchange for book editing. I edited the first few chapters on trade, then he ran out of trade dollars. I have since done tens of thousands of dollars of business with him in cash. I have also had trade clients refer cash clients.

The contracts state that members should do their own due diligence, take bids if appropriate, and choose products and services on trade in the same way they would cash. However, on the rare occasions (maybe two or three in close to 30 years) when I have had a dispute with a supplier on trade, the trade exchange has mediated and resolved the problem.

Note added 8/25: Be sure to read the comments in this series—Rita shares how individuals as well as businesses can barter effectively as well as creative ideas for folks who think they don’t have anything to trade.

Barter—Part 1: What Is It?

A few months ago, I received an e-mail from someone who had read my post Connecting – Part III: Trade Exchanges. He asked several questions that I thought others might find interesting. In this post, I’ll discuss what barter/trade exchanges are, then in subsequent posts, I’ll answer the questions.

Just about everyone has heard about the ancient practice of bartering. The farmer would pay the doctor with a chicken or the carpenter would repair the lawyer’s house in exchange for legal work. However, it’s not often that two businesses need each other’s goods or services in the same amount. Trade exchanges, also known as barter clubs, make bartering possible for almost everyone. The trade exchange acts both as a matchmaker and a banker—finding goods and services for members and maintaining records of the “trade dollars” or “barter units” members spend and receive. The exchange charges a transaction fee (in cash) for providing the service; most exchanges charge a one-time, annual, or monthly membership fee as well.

Often businesspeople find bartering attractive because they think they don’t have to pay taxes on trade income. Unfortunately, that is a misconception. Trade income is taxable exactly the same way cash income is. However, if you spend trade dollars for business expenses, the expenses are deductible just as if you had paid cash.

In the next installment, we’ll talk about the value of being a member of a trade exchange.

Job Search: Part 3—Interviews

Your cover letter did its job and got your resume reviewed. Your resume did its job and got you an interview. Now what?

Don’t just expect to show up at the appointed time without preparation and get the job. If you want to be successful, you need to prepare for the interview.

You will find it helpful to know what kind of interview you will be having. In addition to the traditional interview where one person—probably your potential supervisor—meets with you to discuss your experience, you may encounter several other types of interviews. Especially if you are applying for an executive level job, you will probably have several interviews before a decision is made.

Some of these kinds of interviews may be used together—you may be interviewed by a panel that asks behavior-based questions, for example—or you may go through a series of different kinds of interviews.

• Telephone Interview: The employer may use a telephone interview to narrow down the candidates for an in-person interview or to save travel expenses when interviewing out-of-town candidates.
• Panel Interview: The panel may include your potential supervisor along with higher level executives and representatives from Human Resources and other departments you will interact with if hired. Each of these people will have different interests and concerns.
• Behavior-based Interview: This type of interview—sometimes called the competency interview—is based on the theory that past performance is the best indicator of future performance. You will be asked questions about specific challenges you have encountered in your previous work life and be asked to described how you responded to them.

 You will need to be prepared for any or all of these kinds of interviews. 

• Research the company and the interviewer(s). You should have researched the company for your cover letter, but you may want to dig a little deeper to be prepared for the interview. If you know the name(s) of the person(s) who will be interviewing you, do some research on them, too. Congratulating an interviewer on a recent award or sharing that you volunteer for the same charity will make a favorable impression.
• Know your resume backward and forward. You may have had to research to find details and numbers for your resume. Remember, the interviewer may be looking at your resume during the interview and will catch any discrepancies. Be sure you have everything on the resume committed to memory or have it front of you and know where to find any piece of information immediately.
• Be prepared with questions of your own. After you answer the interviewer’s questions, you will be given an opportunity to ask questions. Questions prepared in advance will keep you from being caught off guard. You want to ask questions about the company and the job, not about salary or benefits at this point. Raise those issues after the job offer—asking during the job interview makes the interviewer think that you are more interested in how much you will make than in what you will be doing.
• Be ready for typical questions. In addition to being able to address everything on your resume, you will need to prepared for other questions. See sample questions and suggested answers at Quint Careers. You may not know you will having a behavior-based interview, but you need to be prepared to answer those kinds of questions. A typical competency question might be, “Tell me about a time in a previous job when you faced a difficult challenge.” The best answers to these kinds of questions are stories of your experiences that follow the SAR format: S=Situation (the challenge or problem), A=Action (what you did about it), and R=Results (what happened).  Mentioning a compliment from your boss or other third party reinforcement of the good results makes your story more powerful.
• Practice for the interview. Give a friend or family member a list of typical questions and ask them to be the interviewer in a mock interview. Every time you answer a question, you will become more comfortable, and when you’re in the actual interview, you will be prepared for suitable answers. You can find mock interview guides for a variety of jobs at Job-Interview.net.
• Dress appropriately. What is appropriate depends on the kind of job you are applying for, but you should dress in the kind of attire you would wear on the job or slightly more formal if that is work or casual clothes. Even on a telephone interview, many people feel that dressing up gives them more confidence for the interview. Put extra effort into your grooming as well.
• Plan your schedule and logistics. If you traveling to an in-person interview, even if the trip is only a few blocks, allow time for construction and other delays. If possible, check out the location in advance so you know exactly where you’re going and the best route to get there. Plan to arrive in plenty of time to make a last-minute stop in the restroom and still check in with the receptionist several minutes before the appointed time. Realize that you might be observed as you sit in the waiting room—sit up straight, smile, and look relaxed and confident. If you are expecting a phone call from an employer for an interview, eliminate distractions such as barking dogs and loud music. Use a corded phone or be sure your phone battery is fully charged and give yourself a chance to relax and take a deep breath before the phone rings.
• Have everything you need with you. Have extra copies of your resume. Although the interviewers should all have your resume, be prepared if someone doesn’t. Also have notepad and pen to take notes.
• Introduce yourself and shake hands with the interviewer(s). If you are in a panel interview, shake hands with each interviewer. Ask for business cards or write down each name so you can address the person by name during the interview and send them a thank-you note later.
• Give your full attention to the interviewer and answer questions distinctly and honestly. Don’t rush or mumble your answers. Look at the interviewer as you speak. If you are addressing a panel, give your attention to the person asking the question at the beginning and end of your answer and look at each person on the panel during the answer. If you don’t know the answer to a question, say you will get the information and get back with an answer. Make a note to be sure you remember to follow up.
• Ask your questions if they haven’t already been answered. The interviewer(s) will give you the chance to ask any questions that haven’t been covered. Taking advantage of the opportunity demonstrates your interest in the job.
• After the interview, send a handwritten thank-you note to each interviewer. You can also include any additional information that you would like the interviewers to know, elaborate on any of your answers, or emphasize how you can contribute to the company.

Do you have any advice for job-seekers on how to succeed in a job interview? Share them in comments.

Good luck to you job seekers. Tell us about your success.

Job Search: Part 2—Cover Letters

When I wrote the post about writing a resume, I did not intend to create a series. That post has become the most popular I’ve written. Part of the popularity, of course, came about because the post was part of a group writing project and was Stumbled several times. However, there does seem to be a strong interest in job search advice, so I decided to make that post the first in a series of three about the job search process.

Today, we’ll talk about cover letters. The resume is a sales tool to get an interview; the cover letter is a sales tool to get your resume read. These tips will help ensure that your cover letter gets the right attention from the hiring manager.

• Address the letter to the right person. You may need to dig a little to find the right person, but your letter will more effective if it is addressed to a specific person—the person who will be reviewing your resume.
• Customize the letter for every job. Several commenters on the resume-writing post recommended that the resume be customized for different jobs. While this may be helpful, it is more important to customize the cover letter. After all, the cover letter is what the hiring manager sees first and what will determine whether the resume is reviewed or not. If your resume doesn’t include relevant experience and qualifications, revise your resume for this position. If your resume includes the information, highlight the most important elements (experience, skills, education, certifications) in the cover letter.
• Use letterhead stationery with your complete contact information. If you don’t have stationery, you can create it on the computer. It doesn’t have to be fancy, but it should look professional. If you sending the cover letter by e-mail, format it like a letter in the body of the message.
• Keep the cover letter to one page. Include the important information in a short, concise document.
• Capture the reader’s attention at the beginning by explaining why you are applying at this company. If you’re not familiar with the company, do some research so you can address why you are a good match for the company and/or the position.
• Emphasize how you will contribute to the company. Stating you want to work for the company because they have the best benefit package of any company won’t make a favorable impression. Telling the employer your experience in quality control will contribute to the company’s new department will impress.
• Show how your qualification match the employer’s requirements. If you’re responding to an ad or job posting, mention specific requirements (such as x number of years of experience, license, degree, knowledge of particular equipment) and demonstrate how you meet or exceed those requirements. If you not responding to a specific job listing, mention your strongest qualifications for a job in the industry or type of job.
• Conclude with a strong close. Let the employer know you are eager to meet her to discuss the needs of the company (or how you can contribute to the company’s goals). Repeat your contact information for your preferred method of contact as well as when you are available.
• Proofread carefully. If possible, ask someone else to read the letter both to catch grammar and spelling errors and to be sure the letter makes sense and flows smoothly.

You can read examples of the various elements of the cover letter at How to Avoid the Four Most Common Cover Letter Blunders.

Next, we’ll discuss interviews.

Job Search: Part 1—How to Write an Interview-Winning Resume

Job-seekers often think they need a resume that will get them the job. However, the purpose of the resume isn’t to get you the job. The purpose of the resume is to get you the interview.

For most positions, hiring managers are faced with a formidable stack of resumes. Just like editors reviewing writers’ query letters, they look for any excuse NOT to consider a resume. Often they glance at each one for only a few seconds before deciding to reject it or to put it aside for review in more depth.

Your first goal, then, is for your resume to make the cut so the hiring manager takes a closer look at it. Your second goal is for you to be called for an interview after the review of your resume.

Following these tips will give you a much better chance that both of those goals will be achieved. 

• Assemble all your information. Review old job descriptions and performance evaluations, school transcripts, awards and compliments you have received, and other documents related to your work history, education, and community activities.
• Don’t give the hiring manager any reason to reject your resume out of hand. Provide the information the employer needs and make it simple to find. Be sure your complete contact information is at the top of the first page and your name and phone number and/or e-mail address is in a header on the second page.
• Format the resume so it is easy to read. Use a clean, simple font, preferably in 12 pt but no smaller than 11 pt, on plain white or cream-colored paper. Make margins at least .5 inch all around; 1 inch is better. Reduce the line spacing between paragraphs rather than the margins or font size. Use bold, italics, and underlining to make headings stand out. Ensure that the formatting is consistent throughout the document, and present information in bulleted lists so the resume is scannable. Keep the document to no more than two pages.
• Begin with a profile or summary of qualifications. ”Objective” is passe - emphasize what you have to offer an employer, not what you want. Many people don’t like to toot their own horn, but if you don’t tell the hiring manager what you will contribute to the company, your resume will land in the Rejected pile. If you’re too modest to brag on yourself, review evaluations from previous employers, recall compliments you’ve received from customers and coworkers, and ask associates what they think your strongest attributes are.
• Include keywords. Often employers are looking for specific attributes and experience and will scan the resume for those words. If your job title (such as Vice President for Southern Region) did not readily identify what you did, include a more descriptive noun (Regional Sales Manager) in the profile or job description.
• Focus on your accomplishments, not job descriptions. Use short sentence fragments beginning with a strong action verb. Describe what you did (without using “I”) and what the results were: “Handled customer service calls, resolving complaints and building customer loyalty.” Quantify your accomplishments and results whenever possible: “Administered $2 million construction budget and brought project in under budget” or “Increased sales by 31% in a 2-year period.”
• Be completely honest but position yourself in the best way possible. If you normally supervised 12 employees but supervised 30 people for six months during a special project, say “Supervised up to 30 people.” If you have related volunteer or hobby experience, include it as well as paid work experience: “Managed 3 fundraisers for Local Charity, raising over $500,000″ or “Coordinated summer reading program for Children’s Club; 75 children read 10 or more books during the summer.” List continuing education and seminars, if applicable to the job you seek, as well as formal education.
• Consider a functional resume if your work history is less than stable. Employers generally prefer chronological resumes, in which jobs are listed in reverse chronological order. However, if your experience is limited or if you have gaps in employment, a functional resume, in which accomplishments are broken down by function rather than by employer, may be more effective. However, a blended resume may be better yet - list your accomplishments by function, then list your employers and dates of employment. The hiring manager isn’t left wondering where you worked and when, but your accomplishments may capture her attention before she reads far enough to see the gaps in your work history.
• Proofread thoroughly and have another person review the resume. If you can, get input from a coworker or someone who knows your accomplishments. Another person may recall something you’ve overlooked or point out the significance of an accomplishment that you took from granted.
• Create a text-only resume. When you apply for jobs online, you will often be asked to submit a text-only resume. Many employers want a scannable resume so they can search for keywords without taking the time of a live person. Be prepared by saving your resume as a text document and removing all formatting. Left-align everything; use capital letters instead of bold, italics, and underlining for emphasis; and add terminal punctuation at the end of every bullet point and statement. Otherwise, everything might run together.
• Remember: it’s all about what you can do for the employer. Ask yourself if you would want to interview the person who submitted your resume. If not … start revising.

For more information about what to include in a resume and how to gather the information, see my Information for Resume Clients.

This post is an entry in An Island Life’s How-To Group Writing Contest.

Note (added 7/15/08): Be sure to read the comments for some great advice from our community.

Note (added 7/29/08): This post has been so popular that I decided to expand on job search advice and create a series of three posts, of which this is the first.

Building Long-Term Client Relationships - Part 6: Nine Tips for Success

In previous posts, I’ve described how I build long-term client relationships. My goal was to provide examples that might be helpful to other freelancers. This final installment in the series will summarize the key points from the previous posts in nine tips:

• Focus your business on providing services that you enjoy, that you are good at, and that your clients want and need.
• Begin with the end in mind. Start off each client relationship in a way that will lead to a long-term, mutually beneficial relationship.
• Operate with total integrity and honesty, and always treat every client with respect.
• Take time to get to know each client and understand his projects. This will build confidence and trust in your client as well as making your job easier.
• Offer suggestions and expert advice that will be helpful to your client.
• Become a valuable resource to your client. If you don’t perform the service the client needs, consider outsourcing it. At the very least, offer a referral to help the client find a reliable service provider.
• Stay in regular contact with your client, whether you are working on a project or not. E-mailing interesting and useful information periodically will benefit the client and keep you top of mind.
• Strive always to make the client’s life easier.
• Treat each client, even on a small job, as a valued long-term client because every client has the potential to become a long-term client and to refer other long-term clients to you.

My long-term clients are the foundation of my freelance business, and I love to hear them say I seem to be able to read their minds.

I hope these tips have been helpful to you. Please share your own tips for building long-term client relationships in comments.

[tags]long-term client relationships, freelancing[/tags]

Building Long-Term Client Relationships - Part 5: Example - The Relationship Continues

I’m sharing the story of how I developed a long-term relationship with a hypothetical client, Susan, who is really a composite of several clients. As in the previous post, I’ll share my client experience and intersperse comments about how a long-term client relationship developed.

Now that Susan’s book was edited, we discussed the next steps. She had read the Self-Publishing Primeras well as several of the resources listed in the primer. She had registered her company name, got a mailbox and a business phone line, and opened a business checking account. Although she had the information she needed to purchase her ISBNs, she gave me her credit card number and asked me to place the order online. She didn’t mind making phone calls or even going to the county office to register her business name, but she wasn’t comfortable placing an order online.

Susan had developed enough trust in me during the editing process that she was more comfortable giving me her credit card information than placing an order online herself. By respecting the confidentiality of her information and ensuring the order was placed properly, I reinforced her trust.

I offered to provide Susan with a list of cover designers, formatters, and printers. However, she asked if I would get quotes and give her my recommendation in each category. Along with the quotes, I showed her samples of work done for other clients. I gave her a quote from a formatter who had many years of experience in book layout, and I gave her a quote for me to do it. The price quotes were the same, and I pointed out to Susan that the other person had more experience than I did. However, she said she preferred for me to do because she knew me and trusted me.

She chose the cover designer and the  printer that I recommended. In comparing printers, I had asked for quotes for 500, 750, 1000, 1500, 2000, and 2500 copies. I shared with her in general terms - without identifying individual clients - the quantities of books my other clients typically order. She should consider the following in determining how many books to order, I suggested: the unit cost, the total cash outlay in relation to her budget, her available storage space, and the amount and kind of marketing she intended to do. I also mentioned that other clients who had written similar books had discovered new information they wanted to add or other changes they wanted to make in a second printing, which was much easier if the original order wasn’t a huge quantity.

Susan had a statistician help her determine the number of descendants of her ancestor who was the main character. She learned there were probably at least 10,000 living descendants, and she expected that descendants of other characters in the story as well as people interested in history of the period would also be potential book buyers. Although the unit price was the lowest for 2500 copies, Susan decided that 1000 copies was the best quantity for her.

Giving Susan the information she needed to make the right publishing decisions showed her I was working in her best interests and continued to build a collaborative working relationship. Susan felt that I was as interested in the success of her book as she was.

Throughout the process, I was available to consult with Susan on any aspect of self-publishing. I gave her feedback on the cover design and proofread the text in final format. We discussed the timing of the release of the book and scheduled it in time for Susan to have copies available for a family reunion. I suggested a news release about the book; Susan agreed, and I wrote a release for online distribution as well as for local media and the media in the community where the family reunion would be held.

I registered Susan’s domain name, provided Web hosting, designed her Web site, and installed the shopping cart. To encourage early orders, she took my advice to offer a free e-book that could be downloaded immediately when someone ordered a print book. Susan asked me to create a business card with her contact information on one side and the book cover and blurb on the other. I also made up a pre-order flyer that we sent to Susan’s family mailing list. At my recommendation, she offered a discount for books ordered in advance for her to deliver at the family reunion. We started a blog on her site - Susan sent me draft blog posts in e-mail or dictated them over the phone.

Susan began to think of me first for whatever advice or services she needed for publishing or marketing her book. By this time, she felt that I knew her book as well as she did so I could do a better job of just about anything to do with the book than someone who had not spent months getting to know Susan and her book.

Since the book was published, Susan has continued to call on me - to send out review copies of the book; to register with Amazon.com and with a distributor; to submit her book to contests and promotional sites and her blog and Web site to directories; to maintain her Web site and to edit and post blog posts; to send news releases about booksignings; to make the initial contact for potential appearances …

Susan doesn’t have to learn to do these things herself, and she doesn’t have to look for a different provider for various projects she wants done. She is confident that if I can’t provide the service myself, I can recommend a reliable person or company.

I stay in regular contact with Susan and all my author clients. I have a distribution list in Outlook, and whenever I find something that I think would be interesting or helpful I sent the e-mail to myself with a BCC to my author client list. A marketing tip in a blog, a new promotional opportunity, statistics on the publishing industry, anything they might want or need to know. Often Susan and several other clients respond to these messages asking me to take advantage of the promotional opportunity for their books.

For example, an acquaintance e-mailed me asking for donations for a silent auction at a gala fund-raising event for a literacy organization. They wanted to keep the auction items related to books and reading and would provide good publicity for the donors. I passed the request along to my author clients, and I’m assembling a number of donations - individual books and a gift basket of several books. The literacy organization benefits from the income generated at the auction, and my clients benefit from the publicity.

The messages provide valuable information to my clients, and the regular contact keeps me top of mind. Several of my author clients give me anywhere from as little as two or three hours work to as much as thirty  or forty hours in a given month, depending on where they are in the publishing process. I keep a running tab of the hours worked (not charging for a quick phone call or e-mail but rounding everything else to the nearest quarter hour) and invoice monthly for all the work done.

Two recent comments, the first in an e-mail and the second in a phone call, exemplify my long-term client relationships:
“You make my life easier.”
“You know me and my book so well it seems like you can read my mind.”

In the final installment of this series, I’ll summarize tips to build long-term client relationships. Ask any questions or make any suggestions of tips of your own in comments.

[tags]client relationships, freelancing[/tags] 

Building Long-Term Client Relationships - Part 4: Example - The Beginning

I’ve talked in general about my business model. Now, let’s discuss my long-term relationship with a single client. To maintain client confidentiality, my example will be a hypothetical writer who is a composite of several clients. I’ll share my client experience and intersperse comments about how my actions helped create a long-term client relationship.

Susan was referred by a writing consultant friend who told me Susan was looking for an editor for her novel based on her family history. When Susan called, she said that another client had also recommended me.

Since two different people that she respected had referred Susan to me, she already had a favorable impression of me. Starting off with positive expectations is an excellent beginning for a long-term relationship.

I asked about her writing experience and learned this was her first manuscript. Susan had not joined a writers groups, taken a class, or done anything else to develop her writing skill. She wanted to get the book published, but she didn’t know anything about the publishing industry.

Taking the time to learn about Susan’s background guided me in how to best meet her needs.

I told her how difficult finding a traditional publisher is and explained that an edited manuscript would have a better chance of being published than an unedited manuscript … but the odds were still heavily against traditional publication. I also warned her that she might hear some things from me that she didn’t want to hear. If someone is going to pay me for my advice, I’m going to give the very best advice I can. If the writer is looking for someone to tell them their words are golden, I’m not the right editor for them.

Absolute honesty builds trust and confidence. Aspiring writers, like many other people, often hear all kinds of false promises and don’t know who to trust. Telling the truth is in the client’s best interest.

After Susan assured me she was serious about publication, I sent her information about how I work with clients along with a short questionnaire. Susan answered the questions - genre, word count,  how much self-editing had been done - and returned the questionnaire with a synopsis of the novel and five pages for a sample edit.

I edited the five page sample, using Word’s Track Changes feature and including lots of comments to explain why I recommended specific changes. Then I used my experience with the sample and the information Susan had provided to estimate how long the project would take.

Time and effort to ensure a good understanding of the project  by both parties before the prospect becomes a client pays off down the line.

I also added a general critique pointing out recurring problems: dialogue was written incorrectly (no paragraph breaks between speakers and improper punctuation) and there were numerous run-on sentences. If Susan would use the examples I gave to make corrections throughout the manuscript, I would revise the price quote since editing would require less time. I also suggested she would benefit from joining a writers group and getting critiques from other writers before hiring a professional editor.

Giving the prospective client alternatives that can save her money gives her the opportunity to find the services that meet her budget and also builds trust.

Susan decided she would rather pay me to edit the manuscript in its current state than spend more time and effort herself. She signed the agreement and sent me the manuscript and a deposit for the first two hours of work.

I edited the first chapter and returned it to Susan with an invoice. Again, I made extensive use of comments to explain why I suggested changes to ensure she understood my reasoning. My goal was to keep Susan’s voice and excellent story but correct grammatical errors and make the book more readable. Susan approved the revisions and sent a check for the balance due. This process continued one chapter at a time until the book was finished.

Working on one chapter at a time ensured that I didn’t get off track and that payments were made on time.  The frequent contacts also built the relationship.

While I was editing the manuscript, I encouraged Susan to learn more about her publishing options. I sent her my Self-Publishing Primer. Periodically, I e-mailed links to helpful articles or blog posts, and I recommended several resources on publishing and marketing. Susan determined that her ideal market was her extended family members, people descended from the main character in her novel, an ancestor from several generations back. She decided she could reach that niche market better than a large publisher targeting a mass market; therefore, self-publishing would the best route for her.

Providing useful resources to help the client make an important decision strengthened the relationship and built trust.

After the first round of editing was done, Susan took my advice and found three readers to give input on the manuscript. Two family members and a history buff could offer perspectives that I could not. To encourage the readers to respond candidly without fear of hurting Susan’s feelings, I sent the manuscripts and asked that the feedback be sent directly to me. Susan would know what they said only if they told her. We found that Susan had made a factual error, which the history buff pointed out. I verified the information and made the change.

Going the extra step to solicit other opinions produced a better product and continued to build trust.

I did a second edit of the entire manuscript. Then, since Susan is local, she came to my office for several hours a day for several days in a row for a read-aloud edit. Reading aloud reveals awkward phrasing and errors that were missed on the earlier edits.

Spending so many hours working together on the manuscript created a stronger relationship.

That completed editing Susan’s manuscript, but it didn’t end the relationship. The next post will cover what happened next.

Share your suggestions on building long-term client relationships in comments.

[tags]client relationships, freelancing[/tags]

Next Page »