How Often Do Your Proposals Result in a Sale?

proposalfeat-1215As integrators, how many of us know exactly what it costs for each proposal we produce? I don’t have any empirical data, but from having had the privilege of doing this for almost 15 years, my anecdotal answer would be: very few. I know, I know — everyone thinks his own are great and his ‘way of doing it’ is leap-years beyond what the competition is doing. I beg to differ: The only thing that matters is the value perceived by the customer and 99 percent of the proposals I see are what I call ‘Look at me’ documents. We have to stop what we’re doing and put ourselves in the customer’s shoes.

What if we change our thinking for a minute and consider the cost of producing a proposal? Through the lens of cost perhaps I can inspire you to change your ways. Let’s think about the cost of producing a proposal as three separate buckets.

In the first bucket, we have the basic tangible physical costs of producing a proposal. These are things as basic as the cost of paper, marketing materials and printer ink. It’s easy to figure out how full the first bucket is; these are all costs that as integrators we understand and that are so miniscule that we don’t really need to consider them (unless any of you out there are delivering proposals on gold-leaf in which case we need to have an entirely different conversation). In the next bucket are our labor input costs. How much actual time does the account manager have invested in meeting the customer and creating the opportunity? How much time does our engineering team take in designing the proposed solution? Although these are proposal input costs that could be easily calculated, the reality is they often aren’t. The last bucket is the one that most integrators don’t consider at all, and it’s the one that has the biggest potential cost impact: the opportunity costs. Our most valuable resource is time; dedicating the time to create, deliver and follow up on a proposal means that we don’t have time to do something else. Opportunity costs represent a choice, choosing one activity over another and choosing one potential customer over another.

Using this ‘buckets’ framework, without even considering opportunity costs (which are difficult to quantify), producing a typical proposal probably costs somewhere around $200 – $400. A larger, more complex system can have proposal costs that climb well over $1,000 and even upwards of $10,000. Not a large sum on its own for most of the proposals that are being created, but when you consider that most integrators track and subconsciously incentivize sales teams on ‘net new opportunities generated’ or worse yet ‘number of proposals delivered,’ the costs of proposals can really add up. For the most part people do what they are measured on. This can lead to a system where our sales teams will put a proposal out to any warm body without properly qualifying and understanding the customer’s needs.

The first step is to change our thinking from proposal quantity to proposal quality. So the question becomes how do we create and deliver proposals that have a higher chance of acceptance? Most of the customer-facing proposals that I see are at one of two extremes. Either a proposal is a detailed parts list with line item pricing and no more, or a proposal is a comprehensive 40+ page dissertation that would rival the reading material burden for most graduate level MBA programs. The truth is both of these versions are actively losing you more business than they are winning.

Let’s take the encyclopedic version first. The problems here are what I’ll call kitchen sink-esque: The integrator includes every single piece of potentially relevant information that it has ever produced, from case studies to awards to resumes of key personnel to fancy cover pages signed by company executives. But length isn’t even the core issue here, it’s that everything is delivered from the perspective of the integrator, not the customer. It is all about how great we are, what we have done, our history, our certification and our achievements and awards. Here is a cold hard truth that many of you will struggle to believe: Our customers don’t care about that stuff. They care about what we can do for them, how we can improve their outcomes and how we provide them value unique to their needs. I consider great references, certifications and all of that other junk basic table stakes. You need them to get access to the game but once you’re at the point of proposal, it doesn’t matter anymore. We are selling technology that in theory is supposed to make our customers lives better, easier and faster. Do you really think that any of our customers are actually reading the entire proposal dissertation? Do you really think that the busy executive budget sponsor in your Fortune 500 account is looking at any of it?

Side note — in the context of an RFP, this sort of proposal diarrhea may be required. Although I don’t believe that responding to RFPs is a legitimate strategy for sustained and profitable growth (another one of those topics for another day).

On the other end of the spectrum, you’ve got the proposal as a one-page parts list that almost always uses very technical equipment descriptions and AV industry acronyms. On a personal note, I loathe those in our family of integrators that are still delivering a detailed parts list as the only component of their customer proposals (and while I’m a huge advocate for not delivering a detailed parts list at all within the context of a well presented proposal, it’s much less offensive). Those that are doing this, please help the AV industry out and stop immediately. We spend so much time thinking about and talking about strategies to differentiate ourselves in pro AV, how to move ourselves away from being seen as movers of product and how to show our customers that we’re valued partners (instead of transactional vendors). Every time a one-page parts list proposal is delivered to a customer, our entire industry is being pulled backwards. Let’s think about it from another perspective. We’ve all bought cars. Have you ever bought a car where on the proposal was every nut, bolt, belt and washer that went into making the car? The last time you bought a laptop was every microchip, wire and connector detailed? And when you buy a house, does the invoice itemize every nail, screw, sheet of drywall and shingle? Obviously the answer is no — we buy those things because of what they do for us as consumers. They fill a need that we have, one that’s Gestaltist (the whole being greater than the sum of its parts). Isn’t an integrated AV system the very definition of this?

So what are some actionable items that we can take as integrators to increase the likelihood of our system proposals being accepted? Here are some quick tips on how to produce proposals that have a higher chance of resulting in business. It will often take a strategic shift in priorities, and it will definitely take some effort, but let’s remember that we’re not in the business of proposal writing — we’re in the business of delivering impactful AV systems for our customers.

  • The entire proposal needs to be from the perspective of the customer – What it does for the customer, what value it provides, and how it addresses her very specific need. I call this the project value proposition, which is separate from the scope of work and should be the first thing the customer sees in the proposal.
  • The power of options – This is a topic for another day, but the gist of it is providing the customer options that changes her thought process from, ‘Should I hire them?’ to ‘How should I engage with them?’
  • Scope of Work – A non-technical, simplified narrative on how the system will operate. Give it to your 11 year old son, if he doesn’t understand what the system will do, your scope is ineffective.

And most importantly, don’t ever deliver a proposal to a customer without first having an agreed upon and scheduled time to meet with her and review. If I was going to deliver a proposal on a Tuesday, I would first make sure that I had a meeting scheduled with the customer on Friday morning at 10 a.m. to discuss and review (this is a specific time and meeting, ‘I’ll call you on Friday to follow up’ isn’t sufficient). Don’t throw the proposal out there into the black hole. As I mentioned earlier, as the integrator, we assume a costly and time consuming burden to design the system and produce a proposal. We are partners with our customers, we need them (for obvious reasons), and we have to remember that they need us – the relationship is always that of equals. If we’re going to invest time in designing a system that fulfills their needs, we need to have mutual expectations of the partnership. One of those is a scheduled meeting time to follow-up and review the proposal. In my world, if the customer won’t commit to that, we won’t produce a proposal for them. Remember opportunity costs — our time is better spent on customers who understand that our relationship is that of a partners.

Too many integration firms boast proudly of their fantastic proposals, of which the content was unfortunately often written by owners, managers and executives that are furthest away from the customer and who don’t understand that our only purpose as integrators should be to solve a customer’s unique needs (which often have to be translated from the ‘wants’ that they communicate). Everyone should be proud of his own firm’s accomplishments; we’ve all done some really fantastic work. But in the context of the customer proposal, remember the only thing that our customers really care about is how we will fulfill their needs.

It’s not about us… it’s all about them.