Charging for Proposals: Pro and Con

Dan Seidman says clients should expect to pay for proposals. Rob Frankel disagrees, but shows how to do a proposal that isn't just free consulting.

Proposals are the foundation of business building for most salespeople. How many of us constantly invest precious sales time to draft a proposal, actually pouring years of experience and expertise into this written gamble at acquiring business?

The reason most of us are so quick to accommodate potential clients is that we really do want to please people. Think of how ridiculous it would sound if you refused to provide materials to your prospect! So you and I are very likely to assume that a request for a proposal is a YES indicator. It reinforces our hope that we just moved one step closer to closing that sale. There is, however, the prospect's perspective. If we don't understand what might really be going on with that request, we could spend endless hours creating and delivering documents for people who have no intention of buying our products or services. And here is why:

Prospects love free consulting. They love it even more in print than in person. If you don't have a strategy for dealing with requests for proposals, you are at the mercy of a potential client. My website of sales horror stories www.salescomics.com actually functions as a lead generation tool for a national training organization. This company has the wisdom to realize (and teach) how critical it is for a salesperson NOT to give everyone proposals, simply because they are requested.

It really is a qualifying issue. If you don't quickly sort the good prospects from the time-wasters, your income will be directly affected by the bad prospects. Your expectations of who will buy from you will be inaccurate. You will lose control of the sales process. In an effort to help you understand about proposals, here, offered for the first time are the

TOP TEN REASONS A PROSPECT DEMANDS A PROPOSAL

(The impact to you is in parentheses)

10. They need to keep their current vendors honest (what a surprise - you never did have a prayer of getting the business)

9. They want a fair range of prices for the type of service you offer (thanks for the quote, the business is going to the prospect's brother-in-law, just below your rate)

8. They want to keep themselves up-to-date on the latest business processes and technologies (thanks for the information, goodbye)

7. They think your product or service simply sounds interesting (but they have no intention of buying!)

6. They need new and better ideas - to make their own changes (thanks for your free consulting - that really hurts, doesn't it?)

5. They just wonder how much it would cost (wow, you're really expensive!)

4. This request will get you off their back (oops, you forgot to qualify the prospect, didn't you?)

3. They can look good when they pass your information to the real decision-maker (did you spend all that time with the wrong person?)

2. They honestly need their problems solved (too bad you don't know who the other eight proposals are from, what they charge and maybe what they're saying about you)

And the number one reason prospects make you pour your blood, sweat and tears into a proposal:

1. A PROSPECT CAN LIE TO A SALESPERSON AND STILL GET INTO HEAVEN!

Please, please stop wasting time jumping through hoops to design proposals for everyone that nods their head or grunts into your telephone. Qualify first, then begin to work with your best potential clients. Your organization should have some criteria for what defines a good prospect. Use it or immediately create your own in order to save yourself from sales heartbreak. One good strategy might be to charge a fee for a proposal. Obviously, a prospect who is not serious will not pay for a it. If this works for you, implement it.

The lesson here is that you need to set some guidelines to determine which prospects are worth the investment of your time in proposal design. Otherwise, you'll waste lots of that time showboating in print for prospects who have no intention of doing business with you. If you don't weed out the weeds, you'll have very little time to find and smell the flowers.

Great selling to all of you.

1999 Dan Seidman

Dan Seidman manages a library of sales horror stories at the website www.salescomics.com . These stories in his monthly newsletter are used to by sales managers, trainers and executives to teach sales reps how to avoid similar mistakes. He can be reached at 847-798-8515 or dan@salesautopsy.com.


Why I Don't Charge For Proposals

As we sprint along in our hamster cages in the relentless pursuit of new business, most of us face the gnawing issue of writing proposals. Let's face it, proposals are a drag. They take time and effort. The prospect has called you up to help; why doesn't he or she just hire you and be done with it?

Ah, would that it were so. Unfortunately, proposals are a way of life. They're here to stay, so you might as well get used to it. Most people really don't need proposals to make their purchasing decision. They need it -- in most cases -- to cover their rear when presenting their purchase decision to their bosses.

Regardless, proposals are a pain in the neck, but they have to be done. The problem is that proposals take work. Lots of work. So much work, in fact, that some people often charge for them, figuring that if they don't get the business, they'll at least get some cash. Or that if the prospect rips off their ideas, at least they'll get some cash. Others, charge for the proposal and then, if they get the business, apply that fee to the overall cost of the project.

I don't charge for proposals. And I don't get ripped off by people looking for free advice, either. The reason is simple, although it took me a long time to figure it out. So in the interest of saving people a few years of heartache, here's what I do:

When someone requests a proposal, I present them with three parts:

1. I acknowledge the issues they need to resolve. 2. I explain how I can help, often by citing clients with similar issues. 3. I outline how I work and how I charge.

What I DON'T do is solve their problems for them in the proposal. That's where most consultants and vendors get ripped off. Although it can be hard to do, because all of us want to show how good of a job we do, avoid the temptation of recommending the solution in your proposal. Remember, these prospects have contacted you for a reason. They need help and they need you. Your experience and wisdom is what they're paying for. If you give it away in an effort to win the business, you will likely never win the business.

One of the hardest things to do is to walk away from a business lead -- especially when the rent is overdue. But bad business is just that: bad. Stick with people who are willing to pay for your time and effort.

Finally, if you present your proposals as I have outlined, you'll find that you don't have to rewrite every proposal for every prospect. Customize, yes. The result is that you get you proposals out faster and more efficiently, protecting your most valuable asset -- your work product.

1999, Rob Frankel, http://www.robfrankel.com. Rob Frankel is a business opinion columnist, branding consultant, speaker and Moderating Dictator of FrankelBiz, the newsletter and business transaction/promotion list.

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