How To Pitch And Close Freelance App Development Clients (From Scratch)
Even though LearnAppMaking is a blog for indie app makers, I get many questions about freelancing and agency work.
So, I’ve decided to write up a long-form article about my experience with finding, pitching and closing freelance clients. In the past I’ve worked for multi-nationals, famous fashion brands, million-dollar agencies and the odd startup. How did I find these clients?
This article focuses on:
- How to find freelance clients from scratch, with no marketing budget, and no portfolio
- How to avoid the feast-or-famine problem
- How to price yourself and your services
- How to manage your acquisition pipeline
Ready? Let’s go!
The Building Blocks Of A Successful Agency Business
Getting started as an agency-like app development company is fairly easy, be it as a “freelancing” one-man-shop or a company comprised of multiple employees.
(A freelancer and agency are the same kind of company, but an agency has more than one employee.)
As a freelancer you typically takes on smaller projects, that are easier to manage, and as a multi-person company you can usually make more revenue per employee because of the synergy and increased productivity of working with teams.
Either way, you will want to have the basic building blocks of your business worked out:
- You need a website and a portfolio
- You need one way for potential clients to reach you, ideally via phone or email
- You need a development pipeline. Who’s going to do the work?
- You need a development workflow. What happens when and when is it done?
- You need a strategy to find, pitch and close prospective clients – that’s what this article is about!
It’s obvious to have a website, but many freelance app makers forget to update their portfolio regularly. Such a portfolio can be simple: a page with screenshots of apps you built is usually enough. You get bonus points for featuring well-known clients you worked with.
Your pitch to prospective clients is going to rely on a return path for the prospect. They need to get back in touch with you once you’ve contacted them. The easiest way to manage that return path is to only allow one way of clients getting back to you.
Instead of giving them your phone number, Twitter handle, Skype address and email, you give them one way of getting back in touch. What this is depends on your sales strategy, but the most simple is of course your phone number, email or contact form on your website.
Your portfolio, pitch and reach are the easy ones – how do you turn them into a well-oiled lead generation machine?
Your Development Workflow And Pipeline: Which Is For What?
Another no-brainer is your development pipeline. As a freelancer you’ll most likely do the development work yourself. It pays to team up with a graphic designer, either a contractor or hired employee. Most agencies call this “in-house”, and it has an added benefit for clients: when they work with you, they don’t have to source a freelance graphic designer!
Additionally, this separates the employee-type freelancers who are simply hired for a fee and don’t have a fixed employer and the entrepreneur-types who actively market themselves and aim to produce a complete product or production process.
Your development workflow is simply a plan you follow to complete projects.
- Do you expect clients to deliver you a functional project specification (a “spec”) at the start of the project, or will you write it yourself?
- Do you charge an up-front fee for creating a quotation for a project, or do you make such a plan for free?
- Do you need to research technical design options, or do you always work with the same back-end system?
- What do you do when a client requests a feature that’s out of scope?
- How do you decide if and when a project is complete? Do you require clients to sign-off on project milestones?
These are questions you need to answer. The Creative App Building Workflow may come in handy here – I’ve used it dozens of times to complete freelance projects.
Now that you’ve got your pipeline set up, how do you get the right kind of prospective client in there?
How To Effectively Spot And Eliminate Bad Clients
Not all clients are created equal. What’s the difference between the client from heaven and the client you want to steer clear from at ALL costs?
Let’s start with the clients you don’t want to work with. Here are some red flags:
- Don’t work with clients that start to negotiate your hourly or daily price down without talking about the project itself and its work. They’re usually window shopping, looking for the lowest possible price for a project.
- If you charge a discovery fee – a initial price for making a spec and quotation – don’t work with clients that don’t want to pay it. Be religious about this rule, because it eliminates clients that aren’t serious about hiring you for a project and it sets the right tone.
- Don’t work with clients that want a fixed-price quotation for a project that’s unclear. Bad clients tend to ask for a ballpark figure and then expect you to stick to it when they change the scope of a project. This only leads to bad things.
Ultimately, you’re looking for a client that …
- … is willing to pay you for services rendered
- … has a clear idea or goal for the project or allows you to discover it for them
- … understand that a fixed-fee price can only be given for a fixed project scope
Ideally, you’re also looking for a client who is either a business owner or a decision-maker in a medium-sized company. You don’t want to work with private persons or businesses with a bad reputation.
Don’t waste your time pitching to someone who is not the ultimate decision maker in the process of hiring you and your company, because you’ll have to rely on their skill to pitch to their supervisor or boss… often with detrimental results for your own acquisition process.
The Million Dollar Question: Pricing High Or Low?
As a general rule, you’ll want to work at the upper limit of medium-sized projects (as opposed to the lower limit of small-sized projects).
Most freelancers are afraid to set their price high. This is because they don’t understand that their yearly revenue is comprised of their hourly (or daily) fee times the number of hours they can work.
When you take on a bad client, who takes up your time unpaid, you would have rather worked with a harder-to-close but ultimately more profitable client instead.
Let’s break down your pricing. Say you want to make $ 60.000 USD a year. You think you can do 12 projects in a year, one a month. It takes you one month to go from initial contact to closed project, in addition to one month of working. You think you can close 1 in 3 projects, a 33% conversion ratio from leads to clients.
You can think about it in two ways:
- Aim for projects of around $ 5.000 in size, so you can close 12 a year and make $ 60.000. You work for 40 hours a week, 4 weeks per project, earning ~ $ 30 per hour. Every month you talk to 3 prospects, of which you close one by the end of the month.
- Aim for projects of around $ 10.000 in size, so you can close 6 a year. Instead of pitching 3 clients per month, you pitch 12 per quarter and plan 3 projects in advance. This will batch your pitching, and batch your work-months. (Batching is a solution to the feast-or-famine problem most freelancers have.)
Your conversion rate will ultimately go up. Even if your sales and pitching skills stay the same, you’ll get better at weeding out the bad leads and focus on the high-quality leads instead.
Ultimately, you’ll want to balance your client size and project size. If you only work with one or two clients you become to reliant on them, too specialized, and you’re more likely to spend too much time on their projects.
If you work on too much projects you spread yourself too thin and you risk tiring yourself in the rat race to get a lot of a little, instead a little of a lot.
Pro Tip: Charge Daily, Not Hourly
Pro tip: charge in days, not in hours. Literally set a daily fee for yourself and include it on a project quotation, for your clients to see. There’s a few benefits to charging by day:
- It removes a fine-grainedness from your quotation, and removes some of the details your clients are inclined to argue and negotiate about.
- It’s a level of professionalism to not fuss over details, but instead focus on what matters: the end results. Who cares if you spend 8 or 12 hours on a feature? Exactly, only the nitty-gritty clients you don’t want to work with in the first place.
- It’s a great way to invisibly charge a surplus for certain tasks or clients. I’ve had clients that took more time than others, because of the way they communicated or the way they took more time to send me their deliverables. Instead of charging them a higher hourly fee, I simply started charging a daily fee. What was 34 hours now became 5 days, building in a buffer for unforseen events.
The big question is of course: how do you measure time? Sometimes you work 6 hours a day, sometimes 10…
I’ve found in 8 years of freelance contracting work that I’ve never worked too little. Years back I would work 30% more on a project than I was paid for. Even though I managed to get that down, I resided in the fact that I would always work enough. It’s part of the Imposter Syndrome, perhaps, an incessant worry about being found out a fraudster (when you are not).
Don’t forget that your clients pay you for the outcome of a project and you simply value that by the hour or day. What if you started charging a flat fee of $ 50.000 per app project? You’d get the project done as quickly as you could!
Now that you can see the difference between a good client and a bad one, how do you find them in the first place?
How To Build A Profitable Acquisition Pipeline
OK, let’s get to the core of the game: finding clients!
First things first. You will want to work on your acquisition pipeline. Don’t see finding, pitching and closing clients as a one-off event you have to do once in a while. All your clients are part of a pipeline. You push in clients on one end, and they come out as converted or not on the other end.
When you close a client, have them sign-off on the work you will do for them, you will schedule them at the end of your current workload. This could mean they’ll have to wait, though! Since you’ve been up-front about that from the start, it’s not a problem.
The one thing you don’t want is feast-or-famine. You either have too much work, or no work at all. You don’t want that!
An effective acquisition pipeline is:
- Find a prospective client (more on this later)
- Pitch them on your discovery product: two one-hour calls or meetings to find out what they want, and a half-day task for you to write up the project specification and hash out a project quotation. You’ll get paid to pitch clients! Charge between $500 and $1.000, an effective $100 per hour. The best part? You haven’t lost a dime when they take your project spec and quote to a competitor.
- Follow up with the client over a 2-4 week period and try to get them to decide on a project planning. This is important, because it converts your project from a maybe to something that’s set to happen in the close future.
- When they decide to continue with the project, you schedule the work. Keep in mind you have other work to do, too, but if you get into the habit of keeping your clients inside their scopes and plan your current work well, you should be fine.
- Do the work when it is scheduled.
The cool thing about a pipeline is that it disconnects your sales and pitching efforts from the amount of actual work you currently have. It’s hard to gauge your future demand and supply when you’re knee-deep in hard work today. Who’s thinking about tomorrow’s dinner when you’re full and satisfied with today’s?
Exactly. You want to know tomorrow’s dinner is coming, and it’ll be good, regardless of your current state of affairs. That’s what the pipeline is for.
How To Find Clients (From Scratch…)
In the past I’ve used one strategy to find clients: networking! It can be very intangible: how do you put your ear to the ground to see who’s looking for an app development company?
Let’s focus on strategy: meetups. It’s simple:
- Go to a tech meetup close to you. You can find them with Meetup.com.
- Talk to everyone. Find out what their current goals, needs and wishes are. If you’re hesitant about walking up to someone, introducing and chatting, then force yourself to talk to everyone with red socks (or jeans, or a tie, or…).
- Learn how to filter out those who are looking for someone to work with. It helps to explain that you’re looking for new clients. Make up a story, appeal to emotions, and showcase your expertise by helping them out on the spot. Asking for frustrations, troubles or recent technical issues always opens the door to a potential work relationship. You shouldn’t go fixing their WiFi, but you surely know someone who can. BOOM! A networking relationship is born – the WiFi-fixer knows someone who’s looking for an app maker and thinks of you. (This is $100.000 advice.)
- Always follow up with everyone you talk to. Ask them how they ended up resolving an issue or remind them they promised you an introduction to an acquaintance. This means you’ll need to have access to their email address or phone number. You exchanged business cards, right? (Don’t hold on to all those cards. Copy them over to a customer relations management system and note down what you talked about, what industry they’re in, and what their current needs are.)
This is when your network starts to grow. The more people in your network, the higher the chance for beneficial relationships and opportunities.
At this point you’re most likely to get a lead thrown your way. Let that prospective client enter your acquisition pipeline. If you can’t dig up any leads, stick with it – this is the hardest part of finding clients! When you’ve built a relationship with someone in your network, you can also simply ask if they know someone who’s looking for an app development company. History favors the bold!
Maximizing A Project: Testimonials, Referrals And MRR
The fun doesn’t end when you close a project. It has just begun! Ultimately, you’ll want to complete the project in a reasonable and timely manner.
When the project is complete ask your client for a testimonial. You can do that on LinkedIn or simply put it on your website. Include a screenshot of the work you’ve done, write a small blurb about technologies and tools you’ve used and hey presto you’ve made a portfolio!
You will want to stay in touch with clients. Depending on the type, they could send more work your way in the future. Apps need updates and new features, or changes to the work you already did.
You can also set up a maintenance contract with a client. The easiest type of contract is a pre-agreed fixed number of hours you can spend on the project each month. You keep the app up-to-date for future iOS versions and fix small bugs. Say you maintain 10 apps for 10 clients, and they agree to 8 hours of work each at $60 an hour, that’s a reasonable $4.800 in monthly recurring revenue!
BONUS: The Rainmaker Funnel
What’s a rainmaker funnel? It’s literally a sales pipeline or funnel that will generate leads on its own, and qualifies them too.
In short, it goes like this:
- You start an authority website, blog or social media channel. Write about apps, create an Instagram following, or start a Facebook group. It doesn’t matter what, as long as it attracts attention from those who are looking for app development companies. Don’t make a typical agency website though – it needs to be a content blog.
- Put a form on the blog, or a link on your Instagram, and offer an hour-long free consultation via Skype. Depending on your availability you could do 20 minute, 30 minute or 40 minute increments. You can also charge a small fee for a consultation, given that you’ve got enough leads. You can even ask them to fill out a survey, to gauge their needs and interests.
- Do the consultation. Just like with in-person networking, follow up after. In the worst-case scenario you’ve lost an hour of your time, in the best-case you’ve just gained a new warm lead. Work on converting leads over time, and increase the quality of your funnel to minimize lost time on BS prospects.
That’s it! A great resource on the rainmaker funnel is this Udemy course by Tim Conley and Samuel Woods.
Are You A Closer?
So what’s next?
- Are you going to build up your portfolio?
- Are you going to check out a meetup near you and talk to people?
- Are you in the process of landing your first client?
- Have you just finished a project, and are you looking to maximize it?
Pro tip: looking for that magical first client to kickstart your freelance career? Tell them you’ll work for half-price, because you’re just starting out. When they like your work, you’ll upgrade them to 100% when the project is complete (be up-front about this).
Ask them beforehand to write you a favorable testimonial when the project is done and tell them you’ll write about the project on your website or blog. When you’re doing good work, and with a little luck, the project will spawn one or two referrals for you – and you’ve just closed your first portfolio project.
Why half price? At half price, a project fee of $3.000, you still make a reasonable amount for paying your bills. If you find yourself unable to close a project because you don’t have enough experience or because your sales pitch or salesmanship isn’t good enough yet, “cheating” by offering half-price is a good way to reel in a prospective client.
Don’t stay in half-price limbo forever! Splitting it halfway, or softening up a negotiation by only negotiating on price, is a very bad tactic.
Now GO! Get out there, and make it RAIN!
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