Pre-qualifying a customer’s request for proposal is the key to success. The worst thing any business can do is respond to everything that comes their way. Doing so wastes resources and time and takes your eye off of the fruitful opportunities that can win you your ideal customers. So, what are my top 5 reasons why you SHOULDN’T participate in a proposal?
1. It doesn’t fit with your business + sales strategy
Before you even think about pitching a piece of business, you need to identify your short and long term business strategy. Every single client you work with will either propel you towards your goals or distract you from getting there. A good sales plan fits like a puzzle piece into the broader strategy and should identify the following:
- What do you do better than anyone else in the market?
- What are your weaknesses? And, what do your competitors do better than you?
- Where are the untapped needs in the market and can you fill them?
- What key trends will affect your positioning in the next 5 years?
- Based on this information, who are your ideal customers? – think demographic as well as psychographic (industry segment, business size, # of employees, budget, what they value in a supplier, what are their product / service needs?, etc).
2. You haven’t set proposal goals
Do you know what your close rate is on proposals and do you know what you want it to be? If not, figure this out before you move forward with any other pitches. You have to know how successful you are, why you were successful and why you lose business. Without that information it’s very difficult to improve your proposal process.
3. You can’t offer a unique benefit to the end customer
Coco Chanel once said: “In order to be irreplaceable one must always be different”. I’d go one step further and say that in order to be considered one must always be different. If you don’t believe that you can offer something of unique value to the customer, why invest time in the proposal?
4. It’s a fishing expedition
It’s critical to understand how serious the client is about hiring a new vendor. Many clients use requests for proposals to ensure their incumbent is competitively priced or, in some cases, to drive down their incumbent’s pricing with lower bids from other vendors. Participating in these proposals is a waste of time. You need to ask the right questions to understand what type of proposal scenario you’re walking in to. Don’t be afraid to ask poignant questions in the initial discussion: How many companies are you requesting a proposal from? Who are they? And, who is the incumbent? Assess this list of competitors. Are they of your calibre? Do you have something to offer that can win you this business? It’s also key to get to the heart of your customer’s drivers. Why are they going through this process instead of using their incumbent? What did they not get from their previous supplier? And, what are their criteria for selecting a new supplier?
5. They want the milk for free
There’s a great debate between event professionals on whether to do spec work. Spec work is when you provide creative in the proposal phase with no guarantee that you’ll win the business and no fee for your time / ideas. Many believe it shouldn’t be done. After all, why give your great ideas away for free? Doing so could result in the client extracting the best ideas from the more expensive vendors and giving those ideas to the least expensive vendor to roll out. Others argue that when you’re selling ideas, the only way to show your capabilities is to show your ideas. Regardless of which camp you fall in, if the requirements make you feel uncomfortable spend time questioning if the payoff is worth the potential expense.
What other reasons do you believe should help determine whether you want to participate or not?
Lara McCulloch-Carter
Author of the Special Event blog ready2spark
Director of Marketing – Regal Tent Productions
President – ISES Toronto
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