Not all sales are created equal…
And I’m not talking about the value of the fee but the value of the contract…
Take these scenarios for example…
Recruiter A secures a new client, 20% fee on an estimated 100K salary…
Recruiter B secures a new client, same fee, same salary…
Both are happy…
And celebrate with their family when they get home…
But the two deals are miles apart…
You see, Recruiter A secured his client on a contingency contract, 30-day net payment terms after start date…
But because it’s contingency there are 3 other firms working the same vacancy… And of course, although he’ll chalk this off as a client won, he’ll only actually generate any revenue from this sale once he fills the role…
Historically for a variety of reasons (99% of which are outside of the Recruiter A’s control) Recruiter A has a 40% fill rate…That’s a nice way of saying 60% failure rate and so chances are he won’t fill this role…
When he fails to fill a role it’s usually not his fault, but it doesn’t matter whose fault it is… he doesn’t get paid…
So he still needs to secure at least 2 more of these deals to ensure he sees any revenue for his labour…
Recruiter B on the other hand secured his client on an Exclusive contract (meaning he’s the only Recruiter working the vacancy)…
Plus he added a cancellation clause (meaning if the client cancels the search for any reason, including but not limited to simply changing their mind, Recruiter B will still get paid for his effort) …
Recruiter B has a 90% fill rate (simply because he’s always the ONLY firm working the vacancy) …
And the 10% of the time he doesn’t fill a role it’s not his fault, it’s usually because the client changes their mind, cancels or fills the role internally, so he’ll get paid anyway (because of his cancellation clause)…
Recruiters A’s contract terms means he needs 3x as many clients as Recruiter B to make the same revenue…
All things being equal…
That’s 3x the time spend on business development…
3x the time spent on delivery because he needs to find and interview 3x the number of candidates…
That’s 3x more time spent IN his business, away from his family…
But for the same revenue…
Not all sales are equal…. The contract you “sell” your client on is more important than making the sale itself…
Want help securing more high quality clients on better terms?
Here are four ways I can help…
- Join “Make More Placements for Recruitment and Search Business Owners” – It’s our new Facebook community specifically for Recruitment and Search Business Owners. Every week we host a free training centred around what you need to do to make more placements and scale your business. — Join Here
- Watch the Case Study – We recorded a case study interview with one of the Recruitment/Search Business Owners we help on how he doubled his business profits in 2020- Watch it here
- Get the FREE 6-figure game plan – How to add six figures to your Recruitment or Search Business within the next 12 months – Get it here
- Work with us privately – If you’d like to work with us privately to scale your Recruitment or Search Business reply to this email with the word “private” in the subject line and I’ll be in touch with the next steps
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