Business proposal management and RFP response- Part 2

Introduction: Understand!

The client has asked for a proposal. Or the sales/ research team has found out about an RFP. And you are responsible for the RFP response.

That’s a fun part of writing a business proposal: whatever your role may be: Proposal Manager; Solution Architect; Solution design team member; Sales; Marketing; Account Manager; Product Manager; Subject Matter Expert; EA to the CEO…. It does not matter. You might be called upon to write a proposal. It will be expected that since you know the subject matter, you can handle a project and you can communicate (and communicate well, I hope), you will be able to get the proposal out the door.
What now? What should be your first step?

Understand! Simple as it may seem, understanding the client, the RFP and the purpose your deliverable document expects to serve, is the first step to get a good proposal written.
And it is often (and sadly) neglected in the crazy quest for content; for the SME, and for the financial proposal.
Not saying that they are not important. They are extremely important – but you are putting the cart before the horse if you concern yourself with the price you quote before you have understood the proposal.

Points to remember: 

  1. Understanding is the key to success:
    You will have to understand your client and their need, if you want to win this deal. Here’s a basic (non-extensive) checklist. Get 30 minutes from the sales rep or the senior management representative and try to get answers to these questions (and then document the findings). They will not think that these are stupid questions to ask, take it from me.
    a. Why has the client chosen to float this RFP? Why does the client want to see your proposal?
    b. What does the client want through this proposal– direct and implied?
    c. What is the biggest pain-point of the client organization? What are the other known pain-points?
    d. Who is / are the decision makers and influencers to this deal? Are the organizational pain-points (as above) the pain points of the decision makers too? Why?
    e. What are the business drivers? Example: Cost reduction? Efficiency improvement? Productivity improvement? Unhappy clients? Lack of quality resources? Management mandate? Introduction of a new service?
         This is absolutely critical. If you have not identified the business drivers, you will NOT win this deal.
    f. What is the as-is state with the client? (If this is mentioned in the proposal already – make 3-4 bullet points on this, and discuss to ensure. What meets the eye through the proposal might not be the absolute truth on-ground)
    g. Who will be adversely affected by the changes due to the implementation as per the RFP? Is one of the influenced parties in the decision-making team?
    h. How is this proposal different from others (or not)?
    i. Who are the other clients bidding for this proposal?
  2. “Every proposal is different. Every client is different”.
    Very true. You will hear this from your sales team often.
    But…
    More often than not, the same template, the same flow, the same content with minor changes will be put in your proposal. And then your proposal will not win.
    Don’t!
    You are the master of your proposal. Take ownership. If your proposal deserves and demands to be different from the standard, then for all practical purposes, make it different. Similarly, don’t be different for different’s sake.
  3. The proposal / RFP response is NOT an informational tool, it is a marketing tool.
    Many experienced proposal managers will tell you – “Answer the question!”
    And they are right. Do answer the question. Never fail to answer the question.
    But….
    If you just answer the question, then you are depending on your product being so good that it does not matter what your competitors say or project, unless they lie (and lie they would not)
    Are you really THAT good?
    If you are not, you will have to project yourself and market yourself. Heavily.
  4. Don’t lie.
    Apart from the fact that you should never lie…
    You are also ensuring that a failed due-diligence will ensure that the client is a no-go zone for you; and what’s more, word does get around.
    Does that mean you’d have to only stick to the straight and narrow? No, of course not. Project your forte. Ensure that your efforts to improve your foibles are heavily highlighted. Market yourself. Sell yourself.
    You can do all that without lying. Trust me, you can.
  5. Take ownership. You, and only you, are accountable for this proposal. Everyone else is a responsible party, or an influencer.

And if your sales team insists that the proposals and RFP response does not win you deals: They are wrong!
While you do need efforts in other areas also, good proposals do indeed win you deals.
And bad proposals definitely, definitely, definitely lose you deals.

 

 

*Previously on Business proposal management and RFP response: Introduction.

 

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What is the Right Price for my product/ service?

“In spirit, pricing should ensure that you will survive”

There are multiple internal and external factors that need to be considered, and there is an important need to identify the pricing objective, before actually getting into finding the price.

Start asking yourself – What is my product/ service positioning (luxury product at low price could actually impact your image)? How will changes in price impact demand for my product/ service (do some market research)? How much are the COGS and the Fixed Overheads related to my product/ service (Gross margin should be sufficient to cover overheads)? What are other external factors that can impact my pricing (such as regulatory compliances, competition etc)?

Once the above stated questions are asked, identify the pricing objective – Short-term Profit Improvement (cash crunch situation), Short-term Revenue Improvement (expanding the market share now, and reaping the benefits in future through economies of scale and scope), Profit Margin Improvement (Low/ unpredictable Sales situation), Quantity Improvement (creating a future demand by making masses habitual to product/ service now || also, take advantage of economies of scale in future), Differentiation Creation (Low/ High Price Product/ Service), SURVIVAL (Intense competition).

As you know what exactly you want to achieve, now, choose the appropriate model (Cost-plus: Price equal to Cost plus Margin, Return Based: Price proportional to the ROI created for customer, Target Return: Price set to achieve target ROI, Perception Based: Price set at a level which is perceived as “fair price”).

“Remember, your price should always be higher than your cost, never be higher than market perception of “fair price”, and most importantly, definitely be enough higher to cover cost of normal variations in sales volume”