I had a recent conversation with a new client who was licking his wounds after losing an opportunity and we tried to break down the reasons why he might have lost it. It was a proposal for a significant amount of work, and he thought his prospective client was on board. It was just a matter of receiving the green light and getting started. He followed up the week after he submitted the proposal. No word back. He then followed up three more times in a two-week period. Crickets.
He never heard back from the prospect and to make matters worse, he never learned why he lost it. I asked him if he asked the prospect one of the most important questions during the discovery discussion prior to submitting the proposal – “What is your budget?” He said no. He then added that he rarely brings up the topic of money with prospects for fear of scaring them off.
How many times have you run into a similar situation?
Why can talking about money for so many professionals be so taboo? I can understand people not wanting to share their personal income, but when it comes to understanding a prospective client’s needs and potential pain points, a budget can be a very important topic to address before sending out the proposal.
Having a transparent conversation can make a tremendous difference in not only winning the work but also setting the right expectations with the client before the engagement starts. The successful rain makers that I coach always cover the top three questions:
What’s your budget here?
What’s your timing?
After you receive this proposal, what’s the process?
“What is your budget?” Often the prospect won’t know what their budget is if this is the first time they are considering purchasing your service. In this case, try to give them a ballpark idea of what it will cost based on the scope, if you can. If for whatever reason they experience sticker shock from the price, you still have time to explain the reasons behind the investment before you submit your proposal.
If the client has a budget in mind that does not align with your price, then discuss what you need to do to get as close to their budget as possible. I am not a fan of dropping the price without changing the scope. It automatically devalues your services or tells the prospect that you were overcharging them in the first place.
“What is your timing?” There are several parts to this question. When do they need the proposal? When do they want to choose their provider? When do they want to get started with the project? And sometimes, by when do they need the project to be completed?
Regarding the project start date, do they want to start right away or wait for a couple of months. This could have a big impact on your and your colleagues' scheduling.
Additionally, coming to a verbal agreement prior to submitting a proposal as to what a realistic time frame is to complete the work can be critical. If the prospect’s expectation is that the project should only take a couple of weeks, yet you know that it will take more than 4 weeks, then you have a big disconnect. Understand that upfront. This may affect how many people you need to put on the project and what the potential “rush charge” may run.
After you receive this proposal, what’s the process? There is nothing more frustrating than submitting a proposal only to wait several weeks without an answer. Perhaps they were not planning to decide on their provider for several weeks. Maybe they need to run the proposal by other colleagues which will take a while. It certainly helps the nerves to know this upfront.
A great quote that I heard from consulting guru, Alan Weiss, was “a proposal should be a written confirmation based off of a verbal agreement.” In other words, there should be no surprises in the proposal.
Addressing the elephant(s) in the room can make all the difference in putting yourself in a position to win the work, or in some cases, walking away from the opportunity if the prospect’s expectations don’t match yours.
Many times, prospects will not respond to a provider’s proposal due to sticker shock or embarrassment because they cannot afford the price tag. My client learned a tough lesson by not asking his prospect some of the important questions upfront. Who knows what the reasons were, however, I can guarantee that if he addressed some of these key issues prior to submitting the proposal, his chances of hearing back from the prospect would have been much higher.