Do this wrong, you fail.
I know that’s a rather dire and absolute statement, but I’m growing ever-more convinced of its truth.
In a moment here, I’m going to tell you about the one thing that I’ve come to realize is THE most critical element of business.
And this is doubly, triply true of any business based on selling SERVICES. (Copywriters, consultants, coaches, and so on — I’m talking to you.)
It’s still critical in product businesses, but it’s even more so by multiples when it comes to actually selling your time.
What is this most critical element of business?
Supply versus demand — it will crush you, or launch you to new heights.
Let me give you a couple formulas. They break down this concept to its most simple, most fundamental level.
Supply > Demand = Failure.
Demand > Supply = Success.
It’s really simple. And yet, I’ve come to realize that far too few people understand it. And of those who do, far too few master it.
And yet, if you master this one simple thing — if you get it working in your favor — you have the keys to the kingdom.
— You get off the roller coaster ride of the feast-famine business cycle…
— You can ask for — and get — higher fees for what you do…
— You can fire bad clients, knowing they’ll be readily replaced…
— You get more respect from clients, and trust to be “the expert…”
— Nearly everything in your life is easier, more enjoyable…
As you see, there are many benefits!
The Supply-Demand Ratio — minutes to learn, a lifetime to master!
Think of this like the game checkers. You can learn checkers in a couple minutes. There is nothing too complex about it. The rules are simple, easy to understand.
In fact, U.S. tournament-level checkers has just 16 short rules.
But the most elite players have complex strategies with names like “the double-ended trapping trio trick” and “forced capture policy.” Learn these and other top strategies, and you’ll discover that the thinking rivals that of top chess champions.
It may take minutes to understand checkers well enough to play your first game. But it takes a lifetime of experience to reach this level of mastery.
That’s how you should think of the supply-demand ratio in selling and business.
Its simplicity is striking.
If your supply of time and talent is less than the demand for it, you’re at all sorts of disadvantages.
If the demand for your time and talent out-paces your supply, you have all the power.
It’s likely overlooked because it’s obvious and too simple.
Just like you may choose to play chess over checkers because chess is more mentally-stimulating.
But within the simplicity lies an opportunity for greatness, if you choose to pursue it.
Demand generation: what you can do to win in business and in life.
Let’s talk Musical Chairs.
For those unfamiliar, the short description. Imagine a class of 12 children. In the middle of the room, the teacher sets up 11 chairs — one less than the number of children. The children form a ring around the chairs. The teacher turns on music, while the children walk in a big circle around the chairs. As soon as the teacher stops the music, the children rush for an open seat. The child who doesn’t get the seat is out.
The teacher removes one chair — now it’s 10 children to 11 chairs, and the game continues. The final round is two children, one chair, and the winner is the child who sits in that chair when the music stops for the last time.
Supply and demand is a game of musical chairs. You ALWAYS want there to be less chairs than there are clients looking to sit in them. Better if it’s 20 clients for 5 chairs. Even better if the clients KNOW it’s 20 clients for 5 chairs, too. They have to see the chairs, and the other people going for them, and know that they have to fight for it.
That’s your goal.
You will always have a limited supply of your time and talent. There are only so many hours in your day. Only so many spots on your calendar. That’s the number of chairs.
Your challenge then is to find out how to get more clients into the room, playing the game, than there are chairs to sit in. Preferably a lot more.
This is the opposite of what most freelancers, consultants, copywriters, and other service providers do. Most look at the number of chairs, and are happy to fill one. If they can fill them all, that’s great. They don’t try to put more people in the room than there are chairs. They see that as pointless. And yet, it’s EXACTLY what you need to be doing.
This means you have to get off your butt and do things to bring potential clients into your game of musical chairs…
Again, most service providers suck at this.
They do NOTHING consistently to bring folks into the fold. They do NOTHING consistently to ensure a steady stream of leads and prospects for their services.
For the most part, they’re too cheap. They don’t want to invest their time or resources in stimulating demand.
They charge too little, and they need it all, so they don’t roll any money back into getting the next client, and the next, and the next.
They don’t advertise for their services, they don’t create products or publications that will attract ideal clients, they don’t do ANYTHING!
When they do expend energy related to the supply-demand ratio, it’s energy spent complaining that it’s so far out of their favor, that there’s no good clients, and that the whole world is stacked against them.
Here’s another formula…
Responsibility = Control.
It also works the other way…
Control = Responsibility.
The level of control you can exercise over a situation directly reflects your willingness to take responsibility for how it is now, and where it’s going.
If you want more control over where you are, take more responsibility — both for the state of things now, and their direction into the future.
You can’t change the past. You can’t change where you were born, your parents, or your genetics. You also can’t change macro-economics — the state of the economy as a whole. But you can take responsibility for what you do with them, now and into the future. Yes, there are real constraints in any person’s life. But usually the real constraints are so far outside of the psychological constraints that they’re fundamentally inconsequential.
To achieve maximum success, you must take total responsibility for continuously generating more demand than you have supply to fill it.
That’s a quotable quote, if I’ve ever written one.
Stick that on your wall and make it a driving principle of your business.
Who is your ideal customer for your services? Who would be willing and able to pay you the kind of fees you want, in exchange for whatever it is that you can offer them?
Now, what do you need to do, on a regular basis, to be known to them? To put yourself in front of them? To make them know what it is you offer, and why they should be interested?
This shouldn’t necessarily be one-on-one. As I mentioned yesterday in my article on positioning, putting yourself out there in person actually communicates that you have more supply than demand. Even when that’s true, it shouldn’t LOOK like it.
Instead, focus on media. What kind of media can you use to continuously attract your ideal customers? This could be media you own. It can also be media you appear in. What can you do to bring them into the fold, and become known for what you need to be known for to stimulate business?
There are very complex models for this. Selling information as a front-end for selling higher-end services.
There are also very simple models for this. A funnel in which you send paid traffic to a webinar, which directs them to apply to work with you.
There are a thousand variations that are all “right” in so much as they can be made to work.
What’s not right is not doing anything at all. Relying on hope to fill your pipeline. Doing little things, here and there, wishing for magic to happen.
Those things don’t work. They’re too passive.
Do something ACTIVE to make this happen.
Once you are stimulating all that demand, you have to know how to manage it.
That’s what we’ll talk about tomorrow.
Yours for bigger breakthroughs,
Like This? Get More...
Get daily marketing tips by email... Enter your info below!