Page 217 - Writing Winning Business Proposals

208 Writing Winning Business Proposals

Pricing Considerations After Initial Contact

After our first meeting, possibly even after our first phone conversation, well before
you’ve done all the work to prepare a comprehensive proposal presentation and/or
document, you will probably have some preliminary indicators concerning the poten-
tial project and the order-of-magnitude fees you believe you might propose. You will
have some guidance about how best to proceed if you answer three major questions
related to benefits, your contact at the prospect’s firm, and your chances of winning. 2

Are Our Likely Benefits Significant Enough to Warrant Your Services?

I discussed benefits and value in Chapter 12. A quick-and-dirty return-on-invest-
ment calculation comparing my organization’s order-of-magnitude benefits to your
order-of-magnitude fees should yield a multiple of at least 5:1 to 10:1 over the first
three years or so after implementation. The logic the other decision makers and I
use when purchasing consulting services, especially in implementation projects, is
similar to our logic when we consider capital expenditures. Investment, returns,
payback periods, and multiples are concepts we use and are comfortable discuss-
ing with those willing to compare potential benefits to consulting fees/costs.
We also know that the results of your services may not be as easy to quantify as is
purchasing a piece of equipment, especially if ours is an insight and/or planning proj-
ect. However, you can work with us to make reasonable estimates of the subsequent
impact of your work, using whatever measures are agreed to: costs, market share, com-
petitive position, and so on. When you work with us in this way, you are employing
a measurable-results orientation. Just as important, when you discuss both tangible
and intangible potential benefits with us, you implicitly suggest your and your firm’s
qualifications. As you relate our particular situation to that of other clients you have
served in situations similar to ours, your stories and examples indicate that you have
experience and expertise that could be valuable to us. Providing specific references
and real-life stories further reinforces the potential value of your services.
What might you do if our overriding question or potential benefits are unclear?
Consider a front-end diagnostic to assess the current situation in more detail. This
diagnostic gets your foot in the door and gives you and your firm an opportunity
to show us how good you are. It also provides you with a higher degree of certainty
about the potential benefits, the potential value, of your services. We appreciate
consultants who can support their estimates of the potential impact of their efforts.

Is Your Contact at an Organizational Level High Enough
to Make or Influence a Decision to Engage You?

You need to be talking to people high enough in my organization to make, or con-
vince others to make, a decision to hire you. If you begin your selling process at a level