CONVERTING THE ITT TO A SALE | The Top Consultant: Developing your Skills for Greater Effectiveness

An invitation to tender (ITT) can arise early or late in a sales process and have tight or loose specifications. Figure 5.8 illustrates progressive tightness of specifications.

Figure 5.8: Progressive precision of specification

An example of the invitations to tender at each stage for a consultancy practice could be:

Predicament. How can we sell more to our clients?
Problem definition. How can we develop the performance of our account managers?
Solution definition. Can you deliver a training course for account managers?

A client might be at any of these stages when opening a discussion with a consultant; and the degree of definition may progress during the sales process. Indeed, there is some truth in the saying that 'Selling is free consultancy', but beware of providing excessive value free of charge in order to win a sale. For example, coming up with a robust definition of what 'the underlying problem is' following the client's predicament definition may involve both considerable insight and effort.

An explanation of how to conduct this process is given in Chapter 6 on problem solving; suffice to say that there comes a point when you and the client have agreed that you should submit a proposal. In the sales process (see Chapter 4) this is divided into two parts: 1) proposition design, which is about the content of your response and 2) pitching, which is how you put it across to the client. The former is dealt with in more detail in Chapter 8 on terms of reference; the latter is dealt with in more detail below. But first, a word of warning: consultants invest a lot of time and effort in preparing proposals, but often the client will have already a predilection to buy - or not - depending on the consultant's performance in the earlier stages of the sales process. So, make sure that you put in sufficient effort early in the sales process.

Submitting a Proposal

The proposal is often the only significant written communication in the sales process. Terms of reference set the content and terms of business set the commercial context for a consultancy project. These are usually brought together in the proposal, prepared by the consultancy.

As well as being a contractual document, a proposal has a selling purpose. It must:

persuade the client to undertake the project (or to endorse a decision already made);
make the case for engaging consultants;
set out how the consultancy would approach the assignment;
convince the client that the consultancy is well equipped to carry out the assignment, and that it should be chosen so to do;
lay out the terms on which the assignment is to be conducted.

The length, form and complexity of proposal documents will vary widely according to what is appropriate but, in varying degrees of detail, proposals will normally contain the items shown in Figure 5.9. In addition, there will probably be a statement of the benefits of proceeding. If the proposal is long, or complex, it may be helpful to the reader to put in a summary at the beginning to provide a bird's-eye view of the contents.

An appraisal of the nature of the client's business, the background of the proposed assignment and the problems to be tackled

Definition of the terms of reference and scope of the assignment with comments on the validity and any critical aspects of the terms of reference supplied by the client

Proposed approach to the project describing the tasks to be accomplished and the methodology and techniques to be used

A work plan indicating the timetable, sequence and duration of tasks and the total elapsed time needed to complete the assignment

A statement of the expected results and outputs from the assignment

Details of the form and frequency of reporting and arrangements for regular liaison with client staff

Proposed staffing levels and roles to be assigned to consulting staff and client counterpart staff and an estimate of the total time inputs proposed

Fee and expenses quotation and invoicing procedures (which may be presented separately)

Supporting information on the consultancy's services, and relevant assignment experience and curricula vitae of the assignment team members

Details of the consultancy's standard terms and conditions (or the terms and conditions applicable to the particular assignment)

Methods for assuring the quality of the assignment

Figure 5.9: Contents of a proposal (source— Institute of Management Consultancy)

A proposal is a selling document, which should persuade the client to use your services in carrying out the project. Supporting evidence (covered in item 9 in Figure 5.9) should be tailored to the assignment under consideration. The consultancy therefore must be able to access its assignment experience, particularly if the client wants to take up references. Whether dealing with assignment experience or that of the prospective members of the project team, it should be relevant to the assignment that is under consideration. Standard CVs for consultants are all right as source documents, but they should be tailored for each proposal to highlight the reason an individual consultant is particularly fitted for inclusion on an assignment team.

A proposal should be a manifestation of the value that your consultancy practice can bring to the client. Clients are rarely impressed by statements of how wonderful the consultancy practice is.

Nowadays, organizations are rarely embarrassed by using consultants. Presentations made jointly by consultants and client staff at conferences are not unusual. Nonetheless, references to other clients should be made circumspectly when talking to prospective clients. Bear in mind that prospects will assume that you will discuss them and their business in the same way with your other clients. A client's permission should be sought before discussing with other clients the work you have done for them. From a prospect's view, however, it can be tremendously helpful to talk to an existing client - and a valuable selling aid to a consultancy if given a glowing reference.

The reasons for using your firm should be included in almost every proposal. If the need for the assignment for which you are proposing is already widely accepted, then you may need to do no more. If, however, the sponsor or some of the sponsor's colleagues have yet to be convinced of the benefit of proceeding, then you should make clear the rationale underlying the project and the benefits of proceeding.

Nursing the Sale

Once the proposal has been submitted, the sale will need to be nursed. It is rarely satisfactory to submit a proposal and then wait for a 'Yes/No' answer. Ideally the salesperson should know the steps involved in the client's decision-making process and be on hand to deal with any difficulties and to direct attention to the benefits of your undertaking the assignment.

Immediately after submitting the proposal, the salesperson might contact the prospect to:

check that the proposal has been received;
get initial reactions and confirm the decision-making process;
identify any real difficulties the client has in choosing your proposal and deal with intrinsic objections.

On this last point, note that in the private sector particularly, price is only one of several factors that influence a client's buying decision. Classic negotiation on the cost, payment terms and so on may be required, but these are less important than the prospect:

believing that you have clearly understood his or her company's needs;
having confidence in the consultancy's people;
believing that the proposed approach will achieve the benefits claimed.

If a client is unhappy with a proposal, therefore, see this as a joint problem solving process. The client needs consultancy, you want to provide it, so how can this be done to the best advantage of all concerned? When a client expresses concern, the salesperson must probe to find out what that concern really is.

For example, suppose your estimate of the consultancy fees for a particular job is £20,000, and the client is resistant to this. Let's assume that your fee estimate is based on a costing of fee days times fee rate. An obvious option is to attempt to reduce the fees. If, however, your fee rate is realistic and your estimate of the time required is accurate, then reducing the total fee means changing one of these.

The general practice within consultancy firms is to set fee rates annually (or more frequently during periods of high inflation) at a fixed rate for costing purposes. In this environment, this means that a reduction in total fees will show up as a 'loss', that is, the same number of days at a lower fee rate than standard. The result is that there is then some pressure to do the job more quickly, or to use less expensive resources, both of which are likely to diminish quality.

So, go back to the original problem: why is the client wanting to reduce the fees? Is it because they do not think it represents value for money? Or is it because they do not have the budget? If their reservations are about value for money, do you as their consultant truly believe that the benefits of this project adequately outweigh the costs, both actual and opportunity costs? If you do, then the problem is one of communication. The client:

does not recognize the benefits; or
does not value the benefits in the same way as you; or
lacks the confidence that the benefits will accrue.

In these circumstances there is a major job to be done to diagnose which of these applies and then take remedial action. Of course, if the benefits are not worthwhile, should you be advising them to proceed with the project in the first place?

If the client's problem concerns their budget, can the budget be changed? If the answer is no, the onus is upon you to see what you can do to restructure the project within the time allowed by a reduced budget, usually by reducing the scope. I find an effective strategy is to go through this with the client. We go through the tasks and the estimate of times required for each, to see what can be pared. This allows the client to make suggestions that may not have occurred to me, as well as making clear what the effect of the reduced budget will be. Treating this as a serious problem, and engaging in joint problem solving with the client, will also help to build a good relationship between you.

Losing the Sale

Not every bid will succeed, but don't lose heart! If you have been sufficiently impressive, you should be invited to be on the tender list for the next piece of consultancy that you could do for that client. Anyhow, a good bid should cement the client relationship, and provide the basis for further discussion about what you have to offer in other areas of consultancy.