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.
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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.
- Curtis' Website: wcurtismchale.ca
- Curtis on Twitter: @curtismchale
Q: “What is the one thing that has helped you be more successful with your proposals?”
A: Slow down the conversation, and use the extra time to build trust, find out what’s behind the client’s need, and ideally to write the proposal collaboratively with the client. Similar to what Curtis was saying, excellent advice and well said.
Matt – Thanks for listening to the show. You summed up this episode very well.
In my line of work (engineering design), I find that clients (especially large organizations) usually can identify and articulate their pain points. However, these pain points are often just symptoms and to really deal with them, we need to head upstream to understand/identify the causes and propose solutions to deal with these causes. Sometimes, this approach causes a disqualification of our proposal (large organization with a separate procurement people whom are not technical) because we were not compliant (different scope) but that’s a risk that we have to take to provide value service.
Sam – You are right. There is risk in saying the tough thing. However, I would suggest it is tougher later if it goes unsaid. In other words, it is a trade-off between some pain now or more pain later. Thanks for your insight.
great podcast. thanks for the valuable information. It reminds me of road mapping of sorts. I wonder if Chris charges for his proposals.
Florian – Thank you for the feedback. I think Curtis and I work similarly. If I can determine the value and scope rather quickly, then I simply write and present a proposal. However, if it is more complex, which many software projects are, the first engagement is a paid roadmap or discovery phase, which concludes with a proposal.
Q: “What is the one thing that has helped you be more successful with your proposals?”
A: If there’s anything that the client might not like, make sure they hear it from you personally before they see it in the proposal.
Pete – This is so true. It is easier to handle objections in conversation. First, you can collaborate with the customer on possible solutions. Second, you can uncover a deal breaker before you draft the proposal. Thanks for stopping by.
The one thing which has been most successful for me in my proposals is highlighting the value of the project interms of their business like revenue or cost and provide atleast 2 options in pricing which helps to make an easy conversation.
Buyan – I agree that offering options creates a psychological advantage. The question shifts from “Will I work with you?” to “How will I work with you?” And, three is the ideal number of options although there are rare exceptions. Thanks for listening.
Most successful for me… Getting verbal confirmation on what we’re doing and estimated cost options before putting “pen to paper”.
April – It is amazing the impact this simple step can have. The proposal becomes something we (you and the customer) are doing together, rather than something you are doing for them. It helps clearly define value, scope and increase adoption. Thank you for your contribution.
Thank you to everyone who commented on this episode.
The winner of a free copy of Writing Proposals That Win Work is Pete Harris. (Pete – Please use the contact form to request instructions to receive the book.)
http://artofvalue.com/contact/
Q: “What is the one thing that has helped you be more successful with your proposals?”
A: Changing the style of the proposals from the traditional: “What We Will do?, When Will do it?, “How We Will Do it?…” to a new 10-point structure I been experimenting with:
1) Current Situation (This is a summary of the initial conversation, stating the status of the company and issue at hand that the client brought up… Even state the client’s specific pain point and their hypothesis of what will solve it”
2) Desired Outcomes / Client Expectations (this is a summary of what the client wants to see as the end result and their expectations)
3) The Project (this is the actual description of the work/engagements
4) Our Role in the Project (this explains what our role is going to be and what the client will be exposed to of the work we will do)
5) Your Role in the Project (Client’s responsibilities and minimum requirements)
6) Measurable outcomes (this is the actual results we are going to deliver)
7) Potential unmeasurable outcomes (these are the areas from section 2 that we could effectively affect, but cannot be measured or guaranteed)
8) Potential Additional Services Outside of Scope (where we try to list all possible items the that could come up and it was not implicitly excluded in the original conversation that are obvious out of scope items)
9 Service Limitations (this is similar to section 8, but this states the things that we just cannot do under ANY circumstances wether it is for legal or capacity/skillset reasons)
10) Price and Payments Terms (Discounted flat fee of upfront 100% payment or the regular price on 50/50 progress payment structure, or whatever was negotiated)
Thank you for sharing your framework Hector. I have actually simplified my proposal format to:
1. What do you want to do? (Current situation)
2. Why do you want to do it? (Desired outcomes)
3. How will we do it? (Items 3-10 above)
I like section 7, Unmeasurable outcomes. There are outcomes from a project that take time to develop and depend on the customer following a disciplined process, which is out of your control.
Another way to describe section 8 Services Out of Scope is, What are the problems this solution will not solve.
Wow! Epic post! Great job and I love all the different perspectives and ideas provided. Thanks for pulling all this together. Keep up the awesome work ?