Ditching Hourly

Hello and welcome to Ditching Hourly. I'm Jonathan Stark. Today I'm going to talk about how to write proposals that close. There are three key elements that go into writing a killer proposal. First is conducting the sales meeting. Second is writing the actual proposal. And third is negotiating the deal. Conducting the sales meeting is something I talked about in episode 10, the why conversation. So if you want to find out more about that, you can check out that episode. And negotiating the deal I will talk about in an upcoming episode. So today we're going to focus on the writing the proposal piece. And this is pretty straightforward, I think. First of all, I say keep your proposal short and use plain language. I don't care how much the proposal is for. If your pricing starts at $100,000, $200,000, it doesn't need to be 40 pages. The page count does not correspond to the price. I've written six figure proposals that closed in four or five pages, maybe six tops. So you don't need to write a book, the proposal, no one would read it anyway. And in that proposal, you want to focus on the outcomes, the business outcomes that the client will receive from the engagement, not the activities that you're going to do. Sure, you're going to put in some activities, some deliverables, I'm going to do this, I'm going to have a meeting every Wednesday with you with these people, or I'm going to deliver this PDF report. There will be some things that you put in the proposal that yes, you will do, but the focus is really on the outcomes. You'll have a five star rating in the app store, you'll decrease your bounce rate on your website, your cart abandonment rate on mobile will decrease, these sorts of things. Those are tangible, they could be intangible things like you'll feel less stressed or you'll sleep better at night or your staff will be able to go to their kids' soccer games or whatever pains they're experiencing, they could be tangible or a little bit more intangible or emotional, whatever they are, you should speak to them in the proposal and say, these are the things that we're planning to change, these are the ways we're going to measure progress toward achieving these goals, and at the end, you'll be better off than when you started. All right, so here's the big tip that I think a lot of people really need to hear, which is that you should provide exactly three incremental options in the proposal. Don't just give a single price for single offering and expect them to take it or leave it. That's an ultimatum. Instead of an ultimatum, you want to give them options. And what that does is it gets them thinking about how to work with you best instead of whether or not to work with you. It prevents them from having a knee-jerk reaction to the proposal and just freaking out at the price. When they see three prices, they say, oh, geez, I guess I have to read this and see what the difference between the three options are. And I think it specifically needs to be three. Three is the perfect number. When I say they should be incremental options, what I mean is that there are three different things. So option one is a thing, option two is a different thing, and option three is yet another different thing. They're not more of option one or more of option two. And each of them builds on the options before it. So someone can't just pick option three. It's not a menu. It's not a la carte. They can either pick option one, they can pick option two, which includes option one, or they can pick option three, which includes both option two and option one. Of course, the prices for each option will increase. So option one is X, option two is 2.2X, option three is 5X. And what this allows you to do is to present a document to or present a list of options to the buyer that delivers on their ask, their explicit ask. So when you had your sales conversation and you discovered what the desired outcome of the project was, you present that as option one. These outcomes that you told me on the phone that we agreed to as achievable on the phone, that's option one. Option two will be something that perhaps you didn't discuss, but it's something that you as an expert recognize as something they might like, something they might find valuable or something they might feel they need. Same thing with option three. It's yet another level of interaction with you in some way that they might find valuable. So what this means is you can give someone a fixed price for option one, the thing they asked for, the thing that you both agreed that they need, and you can decrease your concerns about leaving money on the table by offering the two higher level options. So if the price for option one is well within their budget, they'll probably say, oh, we might as well get option two or might as well get option three as well. We trust this person.

them some money and we've got more earmarked than they're asking for option one. So we might as well pick option two or three. One thing I like to do in the options section, I don't put the prices in with the description. I put them at the end with the payment terms. So it's my experience that in a buying situation, someone receives a proposal and they want to immediately scan the document looking for dollar signs and jump to the price. And they're going to have a sort of knee jerk reaction to the price without really reading the document. So if you separate the description from the pricing and you put the pricing at the very end, sort of lumped together, and you just say something like option one is $10,000, option two is $22,000, and option three is $50,000. And then after that, you say 100% is due in advance for me to schedule this on my calendar. Please sign here to accept and let me know which option you'd prefer to choose. And you can make payment, yada, yada, yada. What this does is it prevents them from having a knee jerk reaction to the price, unless your prices are wildly off base. As long as you're in the ballpark somewhere, what this does is it forces them to go back and read all the things they skipped over and say, well, okay, fine, what's option one and what's option two? And what are the differences between option one and option two? What are the differences between two and three? And this just, it sort of forces them to read it to be more thoughtful about the approach and to really think through the value of what they'd be getting for their money. One last side benefit I'll mention about offering options is that by offering an option two, let's say, it becomes obvious that anything that they might have assumed that was an option one, but then they see as an option two is not included in option one. So if you, for example, have an option one that says, we'll build you this new database system, and then option two is, we'll migrate the data from the old system into the new system, then it's obvious to them that option one does not include data migration, which a lot of clients might assume is included. So it gives you some insurance against scope creep because you can come back later and say, yes, I know we need to migrate the data, that's why I made that an option two in the proposal, and you said you didn't need it, so I just assumed or you told me that you guys were going to handle it yourselves. It helps diffuse any assumptions or it helps reveal any assumptions the client might be making by implicitly saying what's not included in the lower level options by saying what is included in the higher level options. Okay, that's it for today. I'm Jonathan Stark, and this is Ditching Hourly. See you next time. If you'd like to download a sample proposal template, you can do that by going to expensiveproblem.com slash five. That's the number five. And sign up for my mailing list, and in the first email, you'll receive a download link to a PDF that I use for all of my custom proposals. That address again is expensiveproblem.com slash five. Hey, Jonathan again. Do you have questions about how to improve your business? Things like value pricing your work instead of billing for your time, or positioning yourself as the go-to person in your space, or maybe productizing your services so you never have to have another awkward sales call or spend hours writing another custom proposal. Book a one-on-one coaching call with me and get answers to these questions and others in the time it takes you to get ready for work in the morning. Best of all, you're covered by my 100% satisfaction guarantee. If at the end of the call you don't feel like it was worth it, just say the word and I'll refund your purchase in full. To book your one-on-one coaching call, go to jonathanstark.com slash call, C-A-L-L. That URL again is jonathanstark.com slash call. Hope to see you there.