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3 Proposal Mistakes - Image of a wastebin with crumpled-up paper

Do You Make These 3 Proposal Mistakes?

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Written by John Doerr
Co-Founder, RAIN Group

I had a conversation recently with a client who was struggling with his sales efforts. The conversation went something like this:

Me: 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 16 proposals in the last six weeks. I'll be in great shape if just a few close soon.

Me: But zero out of 16 have closed in the last 45 days? It's possible you may want to take a close look at why you haven't closed any so far. There might be something wrong with your proposal process.

Client: I'd like to hear more about why you say that. Let's talk about it after I write these last three proposals.

Many a consultant has fallen into the trap of equating proposal activity with sales activity. If a prospect asks for a proposal at the end of a conversation (and they often do) or they send you an RFP, consultants are all too happy to oblige. Preparing these proposals then takes a heck of a lot of time, and too often they end with no sale. If it's not the right time, or not the right situation, you shouldn't submit a proposal.

Read: How to Write a Proposal

Avoiding the following three common proposal mistakes can help you save time and effort by avoiding proposal goose chases and avoiding bad business situations, and it can help you increase your win rate.

1. Too Soon

In spite of the request from the prospect, you really don't have enough information to help him, and thus it's not yet time to write a proposal. Too many consultants somehow figure out how to send one anyway.

You have a much better chance of writing a winning proposal if you work instead to set up a second conversation. Don't get hijacked into sending a speculative proposal before you really understand the prospect and their needs, before they know how you would approach solving the problem, and before they have an idea of what it might take-in fees, effort, and time-to do so.

A proposal should formalize what has already been agreed upon. The prospect should already:

  • Understand the impact and see the value of working with you
  • Know the ballpark fees and communicate to you a willingness to spend
  • See a compelling reason to buy—and buy from you
  • Commit to making a decision within a given time frame

If you send a proposal without attending to each one of those points, you leave much to chance.

If you decide to send something because the prospect would like very much to see something "on paper" and you believe it's worth your effort to invest the energy, send a discussion letter. In this letter:

  • Summarize your understanding of the situation
  • Outline the critical questions that you still must answer with the prospect before you can suggest a firm solution
  • Outline a few possible approaches in broad strokes
  • Remind them the next step is to dig more deeply to figure out the best path for moving forward

Should you decide to send a discussion letter, don't commit to writing it until you have a time to discuss it. If you are willing to commit to spending the time to write a letter, they should be willing to commit to a time to review it. If they're not willing to put something on the calendar, then they're probably not invested enough in the process and a sale is unlikely.

2. The Lure of the RFP

RFPs are usually low-win percentage opportunities, but you can win them.

Let's say the RFP is perfect for you, and you do want to pursue. Don't just respond!

  • Work to develop a relationship inside the company issuing the RFP or see if anyone in your firm has already established a relationship.
  • Set a time to talk to the decision maker. Be prepared with intelligent questions that show you understand the issues involved. By asking these questions you differentiate yourself from the competition and sometimes can even reshape the RFP based on your questions. Most RFPs say "no phone calls or emails." This is usually perfunctory, and does not mean they're not willing to talk.
  • Find out who else is competing and position your firm accordingly. You might also find that your competition is a friend or brother-in-law of the top decision maker, or already an approved vendor within the organization. In that case, politely declining to respond may be the best choice.

3. The Bigger, Not Better, Pitfall

Sometimes it may be better just to walk away in spite of (or because of) the size of the project. Ask yourself:

  • Will I be establishing a fee level with this client that I must forever honor?
  • Will the size of the project tie up too many of my resources such that I won't be able to deliver other, more profitable work?
  • If I take this work, will I be so busy for so long that my pipeline will dry up and I'll be left with a great famine after the feast?
  • Since some of the work will be different from what we have done in the past, will I spend that much more time getting it done, further reducing my profit?

Often in this situation you can work with the client to see that what they expect to spend isn't enough, and then they can find more funds. If that is the case, you may decide you still want to catch this elephant. If it isn't, don't be lured by the high revenue number. Make your decision to pursue or not based on the impact on your practice and firm.

Last Updated August 8, 2023