How to make business proposals
Noric Dilanchian, Managing Partner
noricd@dilanchian.com.au
• your team wll work long hours
To help you put our recommendations into practice, this
• everyone will face high risks
paper is written in a bullet point fashion. We suggest
• there will be excessive expenses
you refer to it from time to time when you are preparing
• there will be poor client relations
a proposal for one of your clients. The paper is a short
overview. It reflects our experience in having prepared
The result will be that extinction is highly likely, and soon.
for our clients numerous service contracts for them to
serve their customers more efficiently and predictably.
2: HOW TO SELL MORE, MORE OFTEN
How can you make proposals which win business and We find that the process for selling more involves no
manage projects in your services business? We’ll show more time and, with careful planning, will result in
you how. sustained success. To help you sell more products and
services, and to keep it simple, in this article we discuss
The focus of this paper is on client focused marketing. the required process as involving three broad stages.
This is different to client-led marketing. One of the The three stages discussed in this article involve your
problems of being client-led is treating what the client business:
says it wants as being the same as the client's actual
needs. The paper also touches on related topics such as • looking inward,
setting client expectations, project management, • looking outward, and
strategic and business planning, contracting, quality • looking ahead.
assurance, proposal preparation and project evaluation.
2.1 Look Inward - Your Operations
1. SELLING LESS
In the first stage of looking inward, define the
The method for selling less products and services is operations of your business including its:
fairly simple. To sell less, your business should: • intellectual capital
in customer relations: • market and industry focus
• maintain a focus on your business • target client base
• speak in technology and design terms • product and service offerings
• avoid knowledge gaps • costs base
• avoid client instructions, expectations and • management methodologies including due
perceptions diligence and compliance arrangements, risk
in the operations you put into place for your management, and project management
customer:
• have a project-specific orientation 2.2 Look Outward - Client's Situation
• apply no project management methodology
• apply no client management methodology In the second stage of looking outward, recognise that
• have no performance indicators your prospective clients procurement patterns are
determined by their needs, constrained by factors such
The consequences of selling less are clear for your as their:
business. In quick time your business will have: • existing information technology resources
• low revenues
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How to make business proposals DILANCHIAN
• intellectual capital (includes knowledge, know- • competencies eg to leverage its assets
how, systems and competency) • four competition mechanisms - timeliness, price,
• decision making procedure differentiation and quality. Improving the quality
• finance and cash flow of what a client does is the most complex. Quality
• procurement process can be measured in numerous ways, including:
• overall value for money
In short, you must know your clients. • service
• industry foresight
• strategic intent
2.3 Look Ahead
• competency
• customisation
In the third stage of looking ahead, in presenting a
• standardisation
proposal to a prospect for product and service
• exclusivity
offerings, apply six rules detailed below.
• business strategy
• competitive advantage
Each of the rules below assumes that you have done a
• new businesses, products and services
good job at looking inward and looking outward. Now
looking ahead, you are needing to focus on the proposal
RULE 4: Have performance improvement processes to
your business will make to its clients, and how to make
illustrate the return from the proposal your business is
the vision for the future a secure reality.
making; and for this purpose:
• define the costs basis for the products and
RULE 1: Be businesslike and use business terminology
services offered by your business
(for clients to understand), and from the client's
• apply risk management methodology
perspective:
• define how return will be achieved
• establish the business case for your proposal
• apply quality assurance methodology
• be outcomes orientated, not activity focused
• apply project management methodology; this is
(people value results, less so “to do” lists)
quite involved and requires considerable
• demonstrate industry foresight (here we are
customisation; however common project
talking about your client’s industry, market, sector
management topics to be defined in each project
or environment
include:
• approach to be taken in the project
RULE 2: Have a client focus to serve the client's:
• deliverables (ie outputs from the project)
• needs - for example, for a website a client’s
from the project
needs may include communication, information,
• outcomes targeted for the project to
processing/transactions, marketing and sales,
achieve
customer support, and education and training
• work to be carried out in the project
• key concerns - includes complexity, cost, privacy
• resource assessment - what resources are
and security
there for the project
• specific circumstances - use for example a
• resource allocation - what resources ware
S.W.O.T. analysis to assess your client’s position
being allocated for the project
• planning requirements - strategic, business and
• tasks - who is to do what and when
product levels of planning
• stages - break up the project work into
• functional requirements - includes marketing,
stages and phases as well if that is useful
research and development, and administration
• milestones - set milestones for the work
• management structure - includes reporting lines
• performance indicators - set criteria to
judge or assess performance levels
RULE 3: Have a value proposition for your client to
achieved in the conduct of the work
recognise the business improvement or advancement
• apply a number of defined, easily observable
proposal being made by your business; or to build,
and reliable project evaluation metrics, eg
innovate or reinvent your client's:
improvements in the client's:
• business, products and services
• sales growth
• processes
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How to make business proposals DILANCHIAN
• market positioning • Chief Information Officer
• time to market • Chief Financial Officer
• customer service • Senior Executives
• quality improvement • Operations Managers
• market share • Business Development Manager
• asset growth • External Adviser or Consultant
• profit margin
• net profit Understanding the operatives who make procurement
• return on investment decisions (ie buying decisions) is critical. In short, who
• shareholder value buys affects procurement patterns, including what you
• increase in share price pitch and how you make your bid. For example, it might
affect format considerations such as whether you will
RULE 5: Illustrate implications of alternative options write an email, prepare a letter or prepare a full
• enterprise solution verses project solution proposal document complete with annexures or
• cost verses benefit attachments.
• risk verses reward
• short term verses long term 3.2 How Clients Buy
RULE 6: Enter into a written agreement for the client's This final section of this paper is about the relevance of
selected option, based on contracting best practice: client size to the marketing and sales objective of a
• methodology and process definition service provider to sell more.
• type standardisation for in-house document
types There are many implications arising from variations in
• content standardisation for in-house the size of clients. The marketing and sales process
agreements differs depending on whether the client is a:
• contract management
• micro business (say 1 to 4 people)
In our firm we only apply Rule 6 after assessing the • small business (say 5 to 19 people)
needs for all the prior rules. If this is not done then a • medium sized enterprise (say 20 to 199 people)
written agreement (ie a legally binding contract) tends • major corporate or government organisation
to be less enforceable or less effective. This is in part (say over 200 people).
because the understandings set out in the document tend
to be less understood, accepted and implemented by the In what way do client needs and procurement patterns
parties. vary with client size? Here’s the answer in a nutshell.
Generally speaking, the larger the client's:
3. THE WHO AND HOW OF SELLING MORE
• information base - the greater the requirement to
manage information and communication in a
3.1 Who Buys
strategic and proactive fashion
It is important to know who will make the buying decision
• procurement - the greater the incentive and
in your client’s business. Knowledge of who are the
capacity to manage procurement processes
decision makers might help shape the content of your
whether the technique involved is outsourcing,
proposal as well as how the project is to be managed if
partnering, tendering or contracting generally
the bid is accepted.
• organisation - the greater:
Consider the implications of the “buying” decision being
• its procurement needs
made by any of the following, a combination of them or
• the possibility that it has a strategic
someone else.
planning process
• the possibility of tension between central
• Marketing Director
control and operational areas
• Chief Executive Officer
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How to make business proposals DILANCHIAN
• the possibility of who buys depending on
the involvement of more operatives in
decision making, therefore requiring more
communication
• the possibility that it will do more internally,
but procure major components
• the possibility that it will desire a
customised rather than low-cost or
standardised solution
• the possibility that it will desire a system
rather than a one-off solution
In closing, the services marketing methodology discussed
in this paper emphasises the benefits of having a client
focus and being fully prepared in your internal affairs,
systems and processes. As illustrated, making proposals
to clients and operating marketing activity in this way
helps identify and meet client needs and hence make
your business sustainable.
Dilanchian Deal Making and
Contracting Solutions
Dilanchian has developed refined methodologies for
projects involving large scale procurement, tendering
and outsourcing. It specialises in developing for clients
template contracts and related documentation (eg to
help clients in their marketing and sales functions).
The firm has also prepared a detailed guide titled Deal
Making Process Improvement Guidelines as well as
other project management and business transactions
guides for both product and service providers.
This paper is based on a presentation at the national
conference of Australian Interactive Multimedia Industry
Association (AIMIA), 11 August 1998.
Dilanchian Lawyers & Consultants
The University Centre
210 Clarence Street
Sydney NSW 2000 Australia
Tel (+61 2) 9269 0229
Email info@dilanchian.com.au
For more papers visit www.dilanchian.com.au
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