What is a Proposal & why is it Critical for high Value Projects?

As all my clients know, I provide a proposal and a contract before the start of each project. But why do I produce a proposal instead of just a quote like most design agencies? It’s true that they are more time-consuming to produce. But, I believe the value they contribute to securing work, as well as throughout the life of the project is invaluable. This is because no two projects or businesses are ever going to be exactly the same. A proposal is about communicating your understanding of the unique problems that each client is trying to solve, and then telling them how you’re going to solve them.

A proposal is such an integral part of our business that 3 out of 5 of our formal steps in completing a project directly relate to creating and presenting a proposal.

To understand why proposals are so effective at converting prospects to sales it is important to remember that there are two key barriers to purchase when selling high-value services, which are risk and uncertainty. A proposal helps mitigate both, particularly if the prospect has made contact with your competitors. If they don’t provide a proposal, all the prospect knows about their offer is that it’s going to cost X and the reason behind that price and the final outcome is not going to be clear. The prospect then has the option of choosing between a reasoned and explained proposal, and a single page quote peppered with figures and technical terms they do not understand. Another benefit is that by providing carefully structured information, the prospect is able to have an enhanced picture of what they are buying, this allows them to be more comfortable asking questions, as well as rejecting part(s) of the proposal; it facilitates dialogue where a quote does not. This means they are more likely to ask for more information, and then accept a revised proposal, than outright reject your services.

Any business that sells high-value services should be providing prospects with a proposal. As mentioned before, the higher the cost of the purchase, the greater the pain for the purchase, and the greater risk adversity. Essentially, the more expensive the product or service, the greater the pre-purchase information search for a house or a car this is hard but not as hard as selling a service. This is because services lack the tangibility of a car or a house, so the risk adversity is greater still.

The use of proposals become more common the higher the value of the service offering, and larger businesses require them before they will consider a service offering of another company, this comes in the form of a Request for Tender (RFT).

The Sales Funnel

The adoption of sending clients proposals is a great way to start or expand your business’s sales funnel in a meaningful way. It’s not uncommon in Tasmania for businesses to have a sales funnel that involves the customer contacting them, and then through ‘things that happen in the middle’ they become or don’t become a client. The absence of a formalised sales funnel creates an inconsistent level of service quality and limits the ability of a business to refine its sales conversation to be more effective. By this, I mean that it is impossible to understand why one customer over another chooses your services, if you don’t understand what you did for either of them.

The Questionnaire

A clear impediment to producing a proposal for a prospect is the absence of information; to remedy this a means of capturing it is required. In our case, we use the following Questionnaire. Now the thing to keep in mind is that the form needs to be adaptive to the prospect’s specific enquiry, which is to say that the client does not want to read and become confused by a question that is relevant to another service. Collecting client information in this manner is excellent not just for the purpose of creating a proposal for them but also for client induction. In our case, when a client completes the form, their information is automatically stored, and their details are adding to our invoicing, proposal, email and contract systems. This is not only time-saving, but it also reduces the likelihood of human error and, therefore, improves the quality of our service offerings.

The majority of the questions you ask in your questionnaire are questions you would have to ask anyway, the only difference is that their collection is now automated and streamlined and is in workable and accessible format. This approach is also convenient for both yourself, and for the customer. It is a means of evaluating and eliminating people that are not invested enough in the overall process if they are not willing to spend 15 minutes telling you what they want. For the prospect, it is available for them to complete 24/7 and is also often a more convenient way for them to articulate their needs in a none time sensitive way.

How to get Started

So if this all sounds interesting, what is the best way to go about doing all this? I use Nussi because of its visual appeal and ease of use for the actual proposal aspect, but Osmosis is another great alternative with a fuller feature set that includes the actual questionnaires, and also a lower price.

As for integrating into your website, this is typically done through a Call to Action, you can see an example on our website, here. The alternative is to provide it as an option on your contact page, or send them a link to your questionnaire once they have made contact via your contact form.

I hope you have found this post to be useful, if you have any questions please feel free to get in touch.

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