The traditional view of the proposal is that the professional must wow the customer with his expertise. A contrary view is the proposal is a collaboration between the professional and the customer. A collaboration that explores the value they can create, the value they should create, and the most valuable way to do it. WordPress developer and business coach, Curtis McHale, has achieved a high closing rate with his proposals by focusing on the results for the customer. His entire sales process, from the first email to the proposal presentation, is an inquiry into why the customer needs what he can provide. In this episode, Curtis explains what a good proposal is, and is not, and how focus on what really matters to the customer.
A Proposal Is…
- What is the most important thing you can share about pricing?
- Find the value for the customer and then relate the price to that value.
- Not finding the value is the worst mistake people make with proposals.
- If you do not discover the value and tie it to your price, you will guess whether it is a good price for the customer.
- Software developers tend to jump into the technical requirement too early.
- Going slower allows you to build trust over time so you can learn the real value of the project.
- He does not usually accept “rush” customers.
- What is a proposal?
- As Alan Weiss defines it, a proposal is a summary of the agreements that you have already made in your conversations.
- As you talk to prospects, you can get to the real value by asking a series of why questions.
- Ask why five times.
- The customer is not an expert in your profession.
- Slowing down helps to establish you as an expert.
- As Tim Williams said, it is part logic and part magic. The customer will pay for the magic.
[clickToTweet tweet=”Not finding the value is the worst mistake with a proposal. #pricing #software #sales” quote=”Not finding the value is the worst mistake with a proposal.”]
Components of a Proposal
- What should you exclude from a proposal?
- A proposal is not a summary of every task you are going to do in a project.
- You do not want to appear tactical, rather than strategic.
- It is not to establish credibility or to win work over someone else.
- For the scope, Curtis and the customer write a Google Doc without prices or timing.
- The objectives are different from the scope/task list; objectives define the project's success.
- By making it a collaborative effort with the customer, it creates an opportunity to identify problems and create more value, and thus improve your bottom line.
- Not taking the time to build the relationship will create a desire to put your company's history in the proposal, which is a mistake.
- What are the 6 key elements of a proposal?
- Define the current problem.
- List the objectives– high level focusing on the desired outcome.
- Gauging success statement.
- Three options, with option 1 fulfilling all the requirements of the project.
- Timeline, based on the options.
- Accountabilities for the customer and the provider.
- Defining the elements:
- Objectives are about the bright future, e.g., “to get more sales by driving more traffic” – like a sales letter to a specific customer.
- Gauging success through metrics demonstrates that you are not just dreaming.
- You can usually pull that information from your notes.
- Gauging success needs to be something you can control; e.g., “we will be ready for responsive on mobile devices.”
- Require action of your customer to help them succeed, when necessary.
- To push through the fear of making requirements, take the time to think and say what is most accurate.
- Do not forget the customer is paying you for your expertise.
- Experience will teach you how to be confident in your expertise.
- Putting the customer's bad idea in a proposal is the equivalent of malpractice.
- What is a common reason a customer says “No” to a proposal?
- You do not find their true budget.
- Not making time to build the relationship with the customer.
- In rare situations, something else takes precedence (and should), like a death in the family.
- You realize that you did not talk to the real decision makers.
[clickToTweet tweet=”Putting a customer's bad idea in a proposal is malpractice. #value #pricing #sales” quote=”Putting a customer's bad idea in a proposal is malpractice.”]
Retainers and Requests for Proposal (RFPs)
- What is a retainer?
- A retainer is essentially an access agreement.
- A fixed price is paid for access to professional to help with problems.
- The rate varies depending on the need for the access.
- Having access to the knowledge and experience creates value.
- Individual access should be your most expensive offering.
- Why is an RFP a waste of time?
- There is typically a preferred provider.
- If you do no know it is you, then it is not.
- It is created by a committee and lays out everything for you.
- Curtis declines RFPs and occasionally gets business because he is contrarian.
- Usually, you will interact a committee in a large organization.
- To establish creditability, you need to be intentional with your positioning (speaking to the right audiences, write guest posts for the top 5 sites in the industry, create a short white paper).
- Why is it important to talk directly with the buyer?
- Most often with RFPs, you are only speaking with the tactical person.
- You want to speak with the person who, if he says yes, the project will happen.
- Slow down, take time, and ask strategic questions to ensure that you are speaking with the right person.
- No one can represent you better than you.
- The decision maker will get the best information by directly talking to you.
- 50% of projects fail in the software industry; 2/3rd are over time and budget.
- Part of being a professional is not being part of the statistics.
- The expert should have processes that are required to prevent failure.
- Look for customers who want quality over a hard end date.
- Sometimes, doing the right thing can be frustrating.
- What is one of your best stories about creating value for a customer?
- A nonprofit has been able to hire its first full-time employee, rather than just people who are volunteering, due to his work.
- He will reap a reward from the long-run performance.
- He has a lot of skin in the game and believes in what they are doing.
About Curtis McHale
Curtis McHale is an entrepreneur with 10 years experience and wins 90% of his proposals. He is a WordPress developer, specializing in membership sites. He is the author of two books, including his latest, Writing Proposals that Win Work. He is also a contributing writer to the Huffington Post, LifeHack.org, and Addicted2Success.