Hold Back on That Proposal

December 8, 2011

Don’t Let Your Sales Proposals Do Your Selling for You

Ira Friedman is the CEO of Bay Audio, a manufacturer of custom speaker solutions. He holds an MBA from the Harvard Business School.

Do you bid on projects by submitting proposals? If so, you are fighting a losing battle.

There’s a lot of psychology wrapped up in the proposal writing process, and too often integrators don’t understand the dynamics that they have set up. This is why a salesperson often blames some aspect of the proposal itself if the sale is lost, instead of acknowledging flaws in the proposal-writing process.

The Proposal Writing Process

During your first meeting with a prospective client, you have an opportunity to sell your company’s skill set, do a quick assessment of the prospect’s needs, and throw out some configuration ideas in an attempt to establish a ballpark system and price.

The meeting ends with the prospect wanting more. “More” may be a follow-up meeting, but more likely, it’s a request for a proposal. Triggerhappy salespeople may even pre-empt the request, and offer a proposal as a method to end the initial meeting and force a second. Now that the proposal process is in place, all focus shifts away from salesmanship.

A proposal should serve simply as a confirmation at the end of the sales process.

Your prospect may have three competitive integrators sending proposals. This exposes the flaw in the proposal-as-selling-tool process. With three proposals sitting on their desk, your prospect has shifted attention to the very thing you can’t control: which integrator has submitted the “best” proposal.

Proposals Subvert Salesmanship

A good proposal is well written, has good visual flow, perfectly explains the system’s configuration, and presents a price sure to make the prospect happy. In short, a good proposal is a summation of a good sales presentation.

Are you confident enough that your proposals are the most well written, look the best, have the most cogent explanation of benefits, and represent the perfect price? This is a misleading question, for certain, because if the perfect proposal simply restates a competent sales presentation, then by extension, the perfect proposal is irrelevant.

Professional sales organizations don’t operate this way. Do you think Boeing emails a proposal to Singapore Airlines hoping it will buy planes? Do you think GE overnights a proposal to Brazil hoping to build a new water treatment plant? Do you think Nike faxes a proposal to Kobe Bryant seeking him as a company spokesperson? Of course they don’t, because these companies take sales seriously, and they insist on building relationships and having conversations with their prospects. Only after everyone has agreed on the terms of sale does the seller put the offer in writing.

An AV World Translation

Your average sale may be “only” $50k, so justifying a drawn-out selling process is tough. But do some quick math: let’s say you are lucky enough to close 33 percent of your proposals. And let’s say it takes you 40 hours total to acquire a project. Here’s a typical breakdown: 20 hours to hunt down a prospect, four hours to plan for and hold the first meeting, another four hours to design the system and draft a proposal, then 12 hours to follow up until the prospect makes a decision. Because you spend 40 hours on each prospect and you only close a third, it takes you 120 hours of total prospecting time (all three prospects combined) to close just one sale.

If, instead, you used salesmanship to land a client and presented your proposal as a summation tool toward the end, your hours would look like this: 20 to acquire, four for the first meeting, and eight for subsequent meetings, during which time you are “designing” the system and finally presenting a summary proposal. Not only do you save time, but also your close ratio goes all the way up (typically above 75 percent.)

Prospective clients grant subsequent meetings only if they want to work with you, so each meeting puts you closer to the sale. Each meeting allows you to discuss performance, timing, and pricing, and ultimately strengthens your relationship. The proposal simply serves as a confirmation at the end of the process.

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