Mindset: Man on the Moon
25th November 2021
Mindset: Rubber Band Model
11th January 2022
There are many things to consider when writing proposals, we have put together this guide to how to write winning proposals to assist with the process.
Gaining conceptual agreement
Prior to writing an effective proposal you must gain conceptual agreement for the services you are offering. This involves having an in-depth discussion with the customer or client (preferably face to face) covering seven things:
1. The opportunity / problem: the opportunity to capitalise on, or the challenge or problem they are facing.
2. The objectives of working together: what they are wanting to achieve as a result of working together.
3. The measures of success: how we will know we’re achieving the objectives.
4. The benefits or value: what the customer or client will gain from working together and how this outweighs the costs.
5. The deliverables: what we will deliver for the customer or client to meet the value they’ve identified.
6. The timing: when you can deliver the value for the customer or client.
7. The pricing options: the different levels of service and the prices associated with those.
Discussing price is a very important step in gaining conceptual agreement. If the customer or client agrees to the price, they are convinced that the value of achieving the objectives is greater than the fee you are charging.
If there is a price objection, your customer does not see the value in your product or service. For further support on articulating value we recommend you ask your Accountant to go through ‘The Formula for Change’ and the ‘State Your Price and Shut Up’ resources with you.
The nine components of a compelling proposal
SITUATION APPRAISAL
This is a brief outline or background about the issue we are we dealing with.
This is best referred to in the covering letter to the proposal you are writing. Below are some examples:
a) For a health and safety consultant: ‘As discussed at our recent meeting, there have been major changes in health and safety legislation. As a result, your systems need a thorough review to ensure that you remain compliant and are not exposed to the strict penalties that now apply…’
b) For a geo-tech consultant: ‘Further to our meeting yesterday please find attached a proposal to assist you to develop a feasibility study for the land development at Paradise Valley. The land has great potential for development so long as the risks associated with thermal activity and soil types are mitigated…’
c) For a recruitment consultant: ‘Thanks for meeting with me yesterday to discuss your goals for your business. We discussed the fact that it is so much more likely you will achieve your goals if you have the right business manager in place. Getting the right person is all about casting the net wide enough to attract ideal candidates, shortlisting and interviewing in a way that allows you to carry on with your core business with minimal interruption…’
OBJECTIVES
This is a brief outline or background about the issue we are we dealing with.
This is best referred to in the covering letter to the proposal you are writing. Below are some examples:
a) For a health and safety consultant: ‘As discussed at our recent meeting, there have been major changes in health and safety legislation. As a result, your systems need a thorough review to ensure that you remain compliant and are not exposed to the strict penalties that now apply…’
b) For a geo-tech consultant: ‘Further to our meeting yesterday please find attached a proposal to assist you to develop a feasibility study for the land development at Paradise Valley. The land has great potential for development so long as the risks associated with thermal activity and soil types are mitigated…’
c) For a recruitment consultant: ‘Thanks for meeting with me yesterday to discuss your goals for your business. We discussed the fact that it is so much more likely you will achieve your goals if you have the right business manager in place. Getting the right person is all about casting the net wide enough to attract ideal candidates, shortlisting and interviewing in a way that allows you to carry on with your core business with minimal interruption…’
METRICS (MEASURE OF SUCCESS)
These explain how you’ll measure progress towards achieving objectives in a qualitative or quantitative way.
How will the change or impact of your product or service be observable? Measures of Success should tell us whether our objectives:
- Achieved the results your customer expected (the value they wanted to achieve)
- Produced results your customer didn’t want or expect (took them away from that value)
- Should be changed, or continue as is
- Should be measured in other ways
These indicators should show that you and your customer are moving towards achieving the objectives you have set in the proposal.
Let’s say you are a Health and Safety Consultant and you’re creating a proposal for a Health & Safety Review and implementation plan. An objective might be to: Identify weaknesses in your existing policies and procedures. The Measure of Success could be: New policies and procedures set in place within 60 days of the Health & Safety Review.
Measures of Success relate to the project work that you’re going to do – not necessarily the outcomes of that project work. You shouldn’t include a Measure of Success that you do not control. For example you could directly reference KPIs: Improved KPIs due to more efficient process, but do not include a specific KPI target: Serious accidents reduced to no more than 1 per annum – as you are only in control of what you are delivering to your customer.
VALUE
This outlines the benefit of the product or service specifically to your customer.
Capture value in the words of your customer. You might ask them:
- ‘What will it mean to you if you get the all clear to proceed with this land development?’
- ‘If you recruit a suitably qualified and experienced Business Manager, how much do you think your profit will increase by?’
- ‘What will it mean to you and your family if you reduced your weekly working hours from 60 to 40 and achieve the same profit?’.
Capture customer responses as the value to be gained by working together. Remember the three freedoms when seeking to capture value:
- Mind freedom: less stress, measured in value terms as better sleep at night, better relationships with loved ones or colleagues or the ability to innovate and come up with fresh ideas
- Financial freedom: more money, measured in value terms as giving you more choice to spend or invest as you want to (e.g. upgrading vehicle in 12 months, buying a boat, taking a family holiday or purchasing an investment property or new plant or machinery).
- Time freedom: the ability to work smarter not harder, measured in value terms as more choice time (e.g. a weekend away with the family, a guilt free day off each month).
ACCOUNTABILITIES (EXPECTATIONS)
This is your opportunity to clarify mutual accountabilities, the expected behaviours of each party to achieve a successful working relationship.
TIMING
Clarify what the probable duration and timing of the project (or projects) will be. This encourages the customer to sign and accept the proposal promptly, helping to maintain a bottleneck free workflow.
DELIVERY (PROPOSED SERVICE)
This is where you clearly explain the methodology or process behind how the service will be delivered. If you are offering more than one service option, state the potential options for your customer in this part of the proposal. We recommend providing up to three options in each proposal, with option 1 being be the cheapest.
Only include the options you have discussed with the customer, and have gained conceptual agreement for. When discussing the options, explain that there are several ways to achieve their objectives and that while all of them will work, some provide greater value. When writing how each option will be delivered be very clear about what you will deliver e.g. ‘a half-day facilitated Health and Safety Review meeting at your offices’ or ‘a land feasibility study including X number of soil tests over an area of Y’.
Note: If not all objectives can be achieved by option 1, clearly state this in the Objectives section of the proposal, e.g.:
- ‘Develop a process to ensure your business is compliant (if option 2 taken)’
PRICING AND PAYMENT OPTIONS
The price comes after stating the proposed service (or service options). This is the first time the customer will see the different fee and payment options. You will have discussed pricing with your customer at the conceptual agreement stage, but this is where you must be specific. Be clear on whether your price includes or excludes VAT and if there are any additional costs which will be priced separately, e.g. your travel costs, or if an external provider is responsible for part of the work.
Offering the customer options (for service and payment) provides them with a choice of ‘yeses’ in the form of increasing value, allowing them to migrate up the value chain to more expensive fees.
There is psychology behind providing options. One option allows for a yes or no decision, while if there are three options the customer is more likely to accept option one as the minimum so the question becomes ‘which option will I choose’ rather than ‘will I accept or decline.’
When offering multiple service options make sure you include check boxes to tick – both for the service options and payment options the customer / client prefers.
ACCEPTANCE
Adding an acceptance deadline provides urgency for the customer to sign and accept. It also helps to ensure you don’t have multiple proposals accepted at once.
As a final administrative note, make sure that the signing part of the proposal doesn’t run over a page – it is essential that the service and payment options chosen and the acceptance signature are all on the same page in case the customer only sends back the signed page.
*The 9 step proposal writing method has been based on material supplied by Alan Weiss
We have also written a guide to leveraging your technology, you can read it here.
