By John Doerr

Recently, I had a conversation with a client who was struggling with his business development efforts. The conversation went something like this:

Me: So, how has your selling effort been going?

Client: Unbelievable. I sent out four proposals last week and three more this week.

Me: That's great. How many new deals have you closed?

Client: Well, er…none. But, I've sent out sixteen proposals in the last six weeks. If I close just one deal…I will have…just…one...deal…in the last two months.

Me: Okay. You think maybe it is time to rethink your approach to sending out proposals?

Client: Maybe…once I finish writing these next two.

Perhaps this conversation is a little exaggerated. But I venture that many a professional service provider has fallen into the trap of equating proposal activity with sales activity. We are so anxious to show some momentum in our business development efforts that we jump at the slightest opportunity to send out a proposal. In the end, for a great deal of hard work, we end up with no deals, no new clients, and no new revenue.

To give you a chance to rethink your approach to proposals, I present three common scenarios for you and some questions and thoughts to help you decide how to best approach each one.

The too early, too soon trap

Scenario: You've just had an initial sales call with a prospect, during which you've learned some useful things about the company and the issues it is facing. The call is going well and the prospect appears interested, but it's not clear he knows just what he's looking for.

You only had an hour for the call and could really use another hour to ask some more questions.

Just as the call ends, the prospect says, “Could you send me a proposal?”

What should you do?

In spite of the request from the prospect, you really don't have enough information to spend a number of hours writing a proposal. In situations like these consider the following:

• You have a much better chance of writing a winning proposal if you take the time to set up a second conversation. Don't get “hijacked” into sending a speculative proposal before you really understand the prospect and their needs. Ask yourself, “Will I just be throwing things against the wall, or will I really be writing a compelling solution to their needs?”
  
  
• Whenever possible, a proposal should formalize what has already been agreed upon. During any subsequent discussions or meetings be certain that the solution you are about to spend hours crafting is describing the future as the prospect also sees it.
  
  
• If you absolutely, positively must send something because the prospect “demands” it, try sending a letter of understanding (without mentioning fees). In this letter:
  • Summarize your understanding of the situation
  • Outline one or more possible solutions
  • Suggest a next step (usually a meeting to discuss the details of the letter)

The lure of the RFP

Scenario: You're going through your mail and open an official-looking envelope. It's an RFP from a Fortune 500 company with which you've never worked, but you would love to have them as a client.

The RFP is 50 pages long but, for all its length, it is not very specific about the underlying issues the company is trying to address. You estimate the RFP would require 5 person-days to complete.

What should you do?

Unless, you are desperate for the work and have nothing better to do, think long and hard about this one. RFP's are usually low-percentage / low-return opportunities. You are going into a shoot-out, with very little grasp of the competitive terrain. But if you do pursue this type of RFP, you can increase your odds considerably by digging a little deeper.

• Try to develop a relationship inside the company issuing the RFPs or see if anyone in your own firm has already established relationships.  
  
  
• Call the contact person with 3-5 intelligent questions that show you understand the issues involved. Even if the RFP says do not contact us, I have found that by constructing these questions, you position yourself apart for the competition and sometimes can even reshape the RFP based on your questions.
  
  
• Find out who else is competing and position your firm accordingly. You might also find that your competition is a friend, brother-in-law, or already approved vendor within the organization. If so, save yourself some time and trouble and politely decline.

The bigger, not better, pitfall

Scenario: You've had a very positive series of sales conversations with a new prospect. The organization needs assistance integrating its dis-integrated regional processes and systems and personnel.

You've developed a good relationship with the key players, and they clearly think your firm is the right one for the job.

The project would be larger and different than anything your firm has done before—though some of the pieces would be similar. The revenue from this alone could put you over your Q2 target. However, the average fees per day,  per person will be considerably less than what you feel you are worth and what you normally scope work at.

What should you do?

Sometimes it may be better just to walk away, in spite of (or because of) the size of the project. In this situation, ask yourself:

• Will I be establishing a fee with this client that I must forever honor?
• Will the size of the project tie up too many of my resources for other, more profitable work?
• Since the work will be different from what we have done in the past, will I spend twice as long working on it for a lower fee?

When to Walk Away

In general, proposal scenarios when it may be best to simply “walk” have these characteristics:

• When the stakeholders can't “get it together”
• When the prospect isn't prepared to spend the money to do it right
• When the project is both very large and very different from anything you've done before

Just as we scope out work in order to run our firms profitably, scope out the proper way to handle when and if you even do a proposal. In the end, it is not the quantity, but the quality and hit rate that will make you a successful rainmaker.

As you decide if you want to go after this work, remember the adage, “Be careful what you ask for…. you might get it!”