In this episode I discuss how to write a consulting proposal.
You can download the consulting proposal template that I discuss on the show.
HOW TO THRIVE AS AN
Will Bachman 00:02
Welcome to Unleashed the show that explores how to thrive as an independent professional. Unleashed is produced by Umbrex, which connects you with the world’s top independent management consultants. I’m your host Will Bachman. Today I’m going to discuss how to write a consulting proposal. Now, before you sit down to write a consulting proposal, if at all possible, you want to first have held a context discussion with the client. Context discussion is a term created by David A. Fields. And I encourage you to read about the concept in his book, The irresistible consultants guide to winning clients. I’ll share with you here my notes from David’s book and the context discussion covers these six topics. Number one situation, why is the prospect looking for assistance? And what’s changed? Why now? There’s always some catalytic event and you should uncover it is that the CEO asked for this. Did the board ask for it? Has a competitor made a move? Is there an acquisition available? So what’s different? What Why is this going on now? Number two desired outcomes. So go beyond the immediate target and ask the client, what’s the ultimate outcome that you’re hoping from this initiative? Number three indicators of success? How will we know if the project is successful? What would some leading indicators be? How would we know that we’re on the right track during the project? Number four, perceived risks and concerns. So you want to unmask the prospects apprehensions, you want to have an awareness of the objections, and that prepares you to design a perfect approach to allay the concerns of the prospect. And these are from, again from David’s book. So most consultants avoid asking about risks, because they don’t want to get objections. But this will differentiate you and it builds trust, and gives the client a chance to show some vulnerability, and that creates intimacy. So you don’t want to argue with the risks. You want to acknowledge them. And you know, and understand them. Number five, value, what’s the actual business value in dollars and cents? How will this project increase revenues, or reduce costs, in terms of revenues, if it’s going to increase revenues by how much attempt to quantify the value to the bottom line. So let’s say that you’re working to increase the conversion rate, let you want to estimate how much your project will increase the conversion rate of the website traffic. And let’s say you decide it’s going to go from 2% to 2.5%. You do the math, and you’d that translates to an increase of $10 million in annual revenue, that zero from two to 2.5% conversion rate. Now, let’s say that the gross margin on that revenue is 20%. So the project would lead to an increase of 20% of 10 million in revenue. That’s 2 million in gross profit. And presumably, that would be an ongoing annual figure. So the project would lead to an annual extra 2 million in gross profit. Or perhaps the project will lead to reduce costs, do a similar back of the envelope question. So you reduce so you’re transforming just the broader objective into a specific quantified dollars and cents. And just really push in sometimes it’s the clients going to struggle to our kid ticket $1 value, they may not have done this math, so push them and say, you know, what does this really mean? And, you know, avoiding losses can be a stronger motivator for some people than then again. So saving costs, if you can quantify it, that also is going to help anchor your fees for the project by putting them in context of the overall value to the business. And finally, number six parameters in terms of people time, money and possibly geography. Want to be asking, Are there people issues we need to keep in mind? Are there timing issues? Is there some big meeting coming up or the board meeting any deadlines, we need to keep in mind and ask about money or cost issues? Who has Signing Authority on this? And you can also ask about budget. And the thing that I love from David’s book is, sometimes a client won’t have a specific budget. But you can ask about, well, what sort of number would give you a heart attack, and that gives you an upper bound. So we talk more about that in Episode One of this show with David fields. So check out that For more on the context discussion. So let’s say you’ve held the context. discussion. By the way, some additional questions that I like to ask are, what have you already done internally to work on this problem? That helps you understand maybe they’ve done some work and you want to take that into consideration? Why aren’t using internal resources? Why are you thinking about going outside the organization for help on this? How are you thinking that we’d be able to help? If you’re sitting at the table? The client must think that that you may have something to add. So ask them? What’s your mental model of what our support would look like? So I never like to assume that I know the answer to that question, it’s a whole lot easier to sell a solution that the customer already wants to buy. And I don’t assume that I know the right answer to that. So I like to let the client Tell me what kind of help they want. And often the answer is not what I would have guessed. And if they struggle with the general question about the mental model of support, I get more specific, say, Well, there are a variety of ways we could approach this. There’s always different levels of detail that we could go, and different levels of involvement from your firm. So on the range of one expert providing light touch advice, one day a week, to a team of with a project lead, plus two direct reports working full time for three months, where on that spectrum, does this project land. I also like to see if the product client has a specific idea on the approach. So I might say, well, there’s probably a number of ways of getting at these consumer insights. We could do a big consumer survey, we could do some intercept interviews, as customers leave stores, we could interview some consumers, one on one on a zoom call and record those. What sort of approach if any of these did you have in mind? Or maybe something else? And then I’ll ask, oh, how do you envision your team being involved in this effort? So they may say, Well, we were all busy, we’re not gonna be involved at all. Or they might say, Oh, it’s very important for me, I have this junior person, and I want that person to be, you know, fully dedicated to this process. So they learn everything you never know. So after having that discussion, in some cases, the client may be convinced, and they don’t even need a proposal. But sometimes they do want a formal proposal, so they can shop it around internally and get alignment from other execs. And maybe approval from the board. So let’s say that they asked for a proposal. Okay. Now question is whether to create a vertical document in Word, or a horizontal document in PowerPoint. When feasible, I prefer to do a vertical document and word, it’s a lot quicker to put together. And frankly, it’s probably easier for a client to read and approve. I’ve included a proposal template in the show notes that you can download. But it’s really pretty simple. And you can do this definitely in your own Word template. And I’m going to describe it here. So, so my templates in a memo format, and it starts at the top with a two line to the name of the client, I’ll put the exact name and their title and the company, and then a from line with my name, and then the date and then the title of the proposal. And if the client has given a name to the project, then I might title my proposal, proposal for project sunshine from Umbrex. They haven’t given it internal name, then I’d characterize it proposal to increase conversion rate of website visitors from from Umbrex or Umbrex proposal to increase conversion rate of website visitors. And then the opening, okay, dear client name, comma. In this proposal, it is my pleasure to suggest a working arrangement between client and consulting firm with the objective of an info on the objective, the following sections detail the context, objectives, scope, approach, team timing and professional arrangements for our collaboration on this important initiative over the coming months. Okay, that’s just the opening verbiage. And then the project context section. Here from our discussion with you, we understand that dot dot dot, and here I summarize the key points of the context discussion that we held it just a few sentences to show that I was paying attention. And I, you know, synthesize what I heard, and play it back to make sure I got it right. And then there’s the objective section here. I lay out the goals of the project. We got that in the desired outcomes section of our context discussion. also include the quantified business value of the project that we may have done together in that context discussion, you know, coming up with what’s the revenue impact or the cost impact and how does that flow down The bottom line, often the client has not thought through the full business value in dollars and cents. And as an instrument before, this calculation is helpful to anchor them on what’s at stake and puts our fees in perspective. And then the scope section. Now, this could be geographic scope, maybe we’re only focused on the Latin America division or on Europe or on us, it could be a product scope, we’re only focused on the food and beverage division, not the household cleaning products division, it could be the client scope. So we’re only focused on a set of clients, maybe clients that are in their last year of three year contracts. And how can we renew those those clients, for example. So this is all just to confirm that we’re, we’re clear on what we’re working on. And then the approach section. So here, I list out a few bullet points on how we plan to do what we say we’re going to accomplish. And then the team section, who is going to do it from the consulting firm side from my side. And as an appendix, I’d usually attach a one page bio of each individual if they’re not already well known to the client. And if the client has committed to contribute support from the client side, I list here, the individuals at the client side who will be helping out on the project and how much time they’re expected to contribute, and what their role is going to be. For example, if the client is going to provide an executive assistant who can coordinate scheduling the 50 internal interviews, or if the client is going to dedicate a project leader, and 40% of that person’s time, I’ll put that in there. And then the timing section here all often make the timing contingent on the client to some degree, as in based on receiving a confirmed agreement and approval to start no later than may 1, phase one will be completed by June 1, and phase two will be completed by July 1. And in that, you know puts a little bit of a burning platform to get the client to move forward and get alignment and get this thing signed off. Next professional arrangements, which is just a fancy way of saying fees, though, in some cases, it’s very clear exactly what the client wants, I’ll just list one option for the approach and for the fee. But if the client isn’t exactly sure about the budget, or about the desired scope and approach, then often I’ll structure the proposal to have a smaller and a larger option, or in some cases, a small, medium and large. And price tag might, for example, be 50,000 80,000. And 130,001. A benefit of this is that it turns a price discounting discussion, discussion into a scope discounting discussion. So maybe the client would like to get the medium sized scope. If you present just the medium size option, you say, Hey, here’s our proposal and the fee is $80,000. Then the natural way for the client to enter the discussion on discounting is to say, Well, can I have that same, you know, thing for 70,000? Can you reduce your fees? But if you’ve given a small, medium and large options, and the client says, well, instead of 80k, can we do 70k, then you can say, Well, if that’s your budget for this, let’s see what we can do, we can come up with some kind of solution that’s somewhere between this small option and this medium option. You know, so somewhere between 50 and 80k, we can maybe carve off some of the interviews, or maybe your team can do this analysis. And maybe we can do two workshops instead of three. And you can figure out how you can negotiate the scope down. Then the next section is use of this proposal. And I got this idea and this language from Mary Kate Scott. So thanks, Mk. And this is we’ve put real work and intellectual property into this proposal. And we don’t want the client to go and take our proposal and just show it to some other consulting firm and say, Hey, can you guys match, you know, match them. So I insert the following text which I got from Mary Kate Scott. This proposal is provided for the exclusive use of client and its executive team. This document cannot be shared with any other organization or person outside client. This proposal does not represent a contract between client and your firm. we retain the right to modify or withdraw this proposal prior to a signed contract. That definitely all this won’t necessarily guarantee that no client ever shares your proposal. But it does seem to cut down the likelihood quite a bit and those on the receiving And are put on the alert that this is a client that won’t respect their intellectual property either. And then a short next step section, you want to make it really clear what the client needs to do to get started if they want to move forward. So you might just have a signature block. So to confirm your acceptance or for proposal, please sign right here and return. And if you do that, and you did give a small, medium and large option, then you want to have some way to indicate which size they have picked. So you know, pick one of these three, check off the box and sign it, I don’t include a signature block. Instead, I put in the next steps, we look forward to hearing from you with any feedback you have on this proposal. If you’d like to confirm our support, please let us know. And we’ll send an agreement for your signature. And then I have a contact info section with my contact info. They ought to have my contact info since after all, I did email them the proposal, but maybe the proposal got printed out and passed around. And I always want to make it easy for people to contact me. If they’re trying to give me business, then, and this is optional. I may include a few sample sanitized examples of work product, it’s always far more powerful to show than to tell. And sharing some sanitized work from a similar past product gives a client a lot of confidence that you know what you’re doing. So you could accomplish all this in a horizontal document in PowerPoint format. For a $50,000 product project, after all the work of the context discussion, I can crank out this word doc version in probably 30 to 45 minutes to put together a horizontal deck that would communicate the same info, it would take me three hours or so. And I think the word doc is actually a little easier to digest. That said, if you are including a lot of visual frameworks or samples of past work, then in some cases, a horizontal deck can be worth the extra investment. So that is my tips on writing a proposal. I’d love to hear from you on what else you would add to these suggestions, and any other resources that you would recommend on the topic of proposal writing, and maybe I’ll do a follow up episode in the future. 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