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3 Reasons Consulting Proposals Fail

By Michael Zipursky
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Today I’m going to talk about proposals, and three reasons as to why proposals are often not accepted, or why people encounter clients delaying on proposals, or deciding just not to move forward on them.

There’s three reasons that are quite common, and we’re going to look at those here today. The first reason is that you’re not having a deep and meaningful consulting sales conversation. If you’re just going in, and you’re talking about what you can do, and your methodology … If you’re doing a lot more talking, and not enough listening, and if you’re not asking the right questions, because there are very specific questions that you should be asking in every consulting sales conversation that will help you to identify, to discover, but then to be able to communicate back to the buyer real value.

When you work through a conversation, you’re able to then identify … a meaningful conversation … identify what buyers really want, what they’re looking for, what they care about, what happens if they take action now, versus what doesn’t happen for them if they don’t take action.

If you’re not identifying the value that your buyer cares about, then you’re not going to be in a position to really have that effective conversation. It also won’t support higher fees.

The first thing is making sure that you’re able to identify … we’ll say and communicate [inaudible 00:01:27] value. If this is not happening, then you’re going to get a lot of pressure from buyers. Typically, they’re not going to see the value. They may not see the reason as to why they should be moving forward right now. They might think, “Oh, we can wait another few months, or years,” or whatever it might be.

When you work through a conversation, you’re able to then identify … a meaningful conversation … identify what buyers really want, what they’re looking for, what they care about, what happens if they take action now, versus what doesn’t happen for them if they don’t take action.

You get to explore not only the opportunity, but also the cost of inaction, and other factors that are really important to them. That’s why that conversation is so critical. The second thing … the second reason I should say, as to why consulting proposals do not get accepted, so three reasons why they don’t get accepted, is because they can’t justify your fees.

Now, these two are directly connected, because being able to identify and communicate value means the buyers will then be able to see the fees, and see the value, and be able to justify making that investment. There is one other factor to fees, and that is that if you put yourself in the position of a buyer who you’ve just maybe met recently, there’s no referral, you have no real existing relationship with them, and so it’s just the first time … There’s often … not often, almost every time, buyers will really want to feel comfortable before investing larger amounts of money.

If let’s say your initial project with a buyer you’ve had absolutely no experience with is $50,000 or $100,000 or $300,000, some buyers are going to be very hesitant to start at that level, just because they don’t know you. They can’t yet believe fully … it’s not personal, it’s just business. They don’t yet know that you’re going to actually be able to provide what you say that you can provide. That gives them pause.

Can’t justify fees, and we’ll say they’re too high. Now, this does not mean that they’re too high in general, it doesn’t mean that you asking $50,000, or $300,000 is wrong. The value may be there, but it just may be that the buyer’s not yet able to justify investing at those high level fees to begin with.

Now, this brings us to the third common reason that buyers hesitate or don’t move forward on proposals right away. That is time intensity, or commitments. That’s abbreviated. So commitment.

Now, the reason why this happens, is if you think about your buyer, now typically your buyer is going to be a decision maker, right? They’re going to be an executive, or someone that is in a position, even if it’s in a mid or small size company, it’s typically then going to [inaudible 00:04:47] to the CEO, the president, the owner, co-founder, whatever.

These are people that are busy. They have a lot going on, and so when they start a new engagement with someone who they have absolutely no relationship with, they are often … and even if you do have a relationship with them, when it comes to number three, people are in many cases, they don’t want to commit to something that’s going to take a lot of time if they’re not yet sure that they’re going to get the result that they really want.

There’s too much risk on the risk-rewards scale, there’s a little bit too much risk for them to do that, because busy executives … their issue isn’t money, okay, their issue is time. Time is their most valuable asset, and so they don’t want to waste it. They don’t want to commit too much time up front to something they’re not yet quite sure is going to deliver the result they want.

What that means, is that if you put all three of these together, it might be one of these, it might be all of these, but these are common reasons why buyers don’t move forward on proposals right away, because you haven’t done a good job of engaging them in a meaningful consulting sales conversation. They’re not able to justify the fees, because they’re too high as a starting point, or they feel there’s too much commitment and time intensity on their part that is required, and they have a lot of other things on their plate.

How do you solve this? How do you deal with this issue? Well, the way that you deal with this issue, the way that you solve this issue … that’s a little check mark, compared to the X, is that you create a discovery offer.

Now, there’s many other names for this, you can call it an assessment, an analysis, a deep dive, a strategic review, whatever you want to call it, but what this is, is the benefits of it, is it’s typically shorter, it’s lower in cost, or lower price, and so these two factors especially … one other thing is it gives it tangible results.

These two factors, that it’s shorter, and it’s lower in price, what it does, is it solves these two issues, number two and three. It won’t solve this, you still need to make sure that you’re doing a great job of having a meaningful consulting sales conversation, but the important thing is that for a busy executive or decision maker, because the price is lower, they don’t need to justify it. Its just, “Oh okay, yeah. I can invest $2,500, $5,000, $10,000,” whatever it might be, but lower on the scale, into this, because that’s not that much.

Depending on the size of your organization, the amount that you charge for your discovery offer might be different, but compared to a full on engagement, significantly lower. That makes them feel like, “Yeah, I can take a chance on this.” Not that they’re just going to take a wild leap of faith, they should still be grounded, and feeling there’s trust, and that you can actually do what you say they’re going to do, but they’re going to feel much more comfortable in doing that.

Also because it’s shorter, there’s less time required. A busy executive can say, “Okay, you’re not suggesting that we get started with a six month or 12 month engagement, what you’re suggesting is a one or two week deep dive, or a one or two week assessment or discovery,” whatever it is, whatever you’re doing. We’re typically talking just weeks, not months, and definitely not years.

Because of that, they’re willing to give it a chance, because they know that they’re not going to derail all their plans, or push everything back, and so the commitment level that is required from this is significantly less. Because of that, and because they’re going to get a result from the discovery offer, whatever you end up doing here, you’ll find that people will say, “Yes,” much faster.

This is a great way to move from a conversation, to actually having clients say, “Yes.” In many cases, if you’re talking to a real buyer, an economic buyer that is in the position to say, “Yes,” they will often say, “Yes, let’s get started right away,” that first … not even first, but that meeting, or when you’re having that conversation, because there’s not much risk required, and they clearly see the value.

It all comes back to, you have to, you must, do a very good job of having a meaningful consulting sales conversation with them, because without that, nothing else really matters. You might still be able to win some business, but if you really want to win consistent business, or a lot more business at higher fees and move everything forward, then number one is very critical.

This is how you handle if you’re confronting a lot of buyers saying, “No,” to your proposals, then I would recommend looking at developing a discovery offer. If you want some help with that, reach out. We can definitely chat about it, but this is the path that I would take. I wish you the best.

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