As part of the research for my new book The Designer's Guide to Proposals I've been interviewing a hand picked bunch of talented folks. People who over the years have refined and nailed their proposal process. Do you want to win more proposals?

Who's Brennan Dunn and why have I asked him about proposals?

Brennan Dunn has run his own million dollar consultancy, written two books, is founder of Planscope and holds an impressive portfolio of projects and products. If there's someone who knows how to write a winning proposal, it's Brennan. In the video Brennan sheds light on how his consultancy stepped up their proposal game and increased acceptance rates. You want to know how to win more proposals too????

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pps. If you want to learn more about the book you can check it out here: The Designer's Guide to Proposals

pps. Here's a transcript of the entire video!

NP:  In this video I’ll be talking with Brennan Dunn.  For those of you who don’t know, Brendan Dunn has run his own multi-million dollar consulting agency.  He’s the author of two books, Double Your Freelancing Rate and The Blue Print.  He runs a two-day master class consultancy.  He has his own paid private community called the Freelancer’s Guild, which I can highly recommend and he’s also the founder of Planscope, which is project management for consultants.

So, without further ado, I’ll jump straight in and we can listen to what Brendan has to say on the subject of proposals.

So the biggest issue I think that many freelancers face is that they don’t really understand the concept of what a proposal is.  They’re used to perhaps receiving an enquiry for a potential client, maybe having an initial call with them and then jumping straight into their proposal template, or even just preparing a simple quote and just sending it out the door.  You know they’re terrified that if they don’t get something out the door by the end of the day, the client’s going to be gone and they’re never going to get any more work.

BD: Right.

NP: Obviously, there are quite a few issues here. Why do you think that we’re so scared to go past this initial quote and create something larger?  Why is there this fear that proposals are for the big boys?

BD: Most of us when we think of proposals, think of Requests for Proposals (RFP) or Tenders as they’re referred to in Europe. What I see most people doing when they write proposals is they’re basically creating a statement of work.  They’re saying, this is what we’ll do and this is what we’ll charge and here’s how you pay us.  These aren’t really proposals in the sense of... if you were proposing to someone to marry them, you wouldn’t go and say, here are the terms of our marriage, you’re going to talk about why you want to marry them. You want to talk about why you’re so passionate about becoming life partners with that person.

You know there’s a distinction between a proposal and an estimate.  An estimate is a series of line items that tally up to a total.  A proposal often includes an estimate, but it’s more about a written account that kind of summarises everything you’ve already discussed with the lead up to that point about the project that’s on the table, why you’re the best person for that project, why you’re the best person to complete that project and, more importantly, what does it mean to have that project completed and done well.

You know when running my agency, we had a lot of different ways that we worked with proposals and they evolved overtime.   At first, they were more statements of work.  They were, this is our rate, this is what we’ll be doing, this is how long we think it will take, sign on the dotted line if you want to work with us.

Later on, as we became more competitive, they became more about, well this is a bit about who we are, this is what you’re bringing to the table, this is the problem that is underneath this project, and here’s why we think we’re the best possible candidates to do this for you.

As we started moving more into the why against the how, into the why should this project be done versus here’s how we’ll do it, our closing rates just went through the roof, which for me as a business owner, I mean I had to find $100,000 worth of work a month to stay afloat, and considering the amount of time in business development that goes from meeting somebody new to getting them to the state of writing a proposal for them.  You have meetings, you have phone calls, you have a lot of stuff in between, the proposal’s kind of that, it’s the build up.  It takes time to get there.  So, if I could increase my conversion rates at the proposal stage, that’s like the best, that’s the single biggest part of my business I could optimize.

If I could raise our closing rate by 25%, that means I just saved my business development guy a quarter of his time that he could be fetching more work for us.

So we spent a lot of time really looking at our proposals.  Why they were being lost, why they were being won.  A few big things that we discovered – the first was that whenever we would re-introduce the problem, the underlying problem behind a project and really hammer that again, again and again, it allowed our clients to realise that we understood why this was on the table.  We weren’t just being looked at as hired guns, we were being looked at as consultants and we understood that they’re not just spending a lot of money on a team like us because they like getting code or getting designs or whatever.  So we really emphasized that.

We emphasized packaging or options.  So instead of just giving, it would take this much time and this is our rate, yes or no, we realised that if we could get people to compete us against us instead of competing us versus other competitors, at the end of the day, we win.

BD: If they choose the cheaper option, we still get the project versus the feature complete option which, we’d get the project, but we’d get more money too.  So that was another big thing we did.

The second thing that we did, or third thing rather that we did that really made it so we got more work was the proposal was really a deliverable for another product we had.  So we did paid estimates called Road Mapping sessions.  And the proposal was the deliverable that came from that.  So, what was interesting is by the time we furnished a proposal, they were already a paying client of ours.  And that was a huge, huge step.  I think that single-handedly was probably the biggest thing for us.

On top of that, I’m trying to think what other things that we did.  We toyed with, should we go in there with InDesign and make really fancy proposals with pictures and things like that or do we just keep it simple.  I don’t really think going heavy on making a pretty brochure designed proposal did much in the end.  I think I can confirm a lot of that, just what I’ve seen online with – the proposals were like long-form sales letters, really, for one person.  And it’s the same stuff I do nowadays with virtually all of my products.  I’m doing the typical – here’s the problem, here’s the solution, here’s our offer, here’s how we counter objections, here’s testimonials and social proof, and finally the call to action.  And that’s basically the setup that we used in our proposals.  And this is stuff that’s been tried and true for decades by direct marketers.  This isn’t anything new.  We just ended up doing sales letters for one without really knowing that, but in retrospect, now that I’m doing actual website sales letters for our products, it’s like, oh, I’ve been doing this for a while, I just didn’t really know it.

So the biggest thing would be please don’t write proposals that are just, this is our company, here’s what we’ll build, we’ll have five pages, we’ll design a logo, it will cost this much, we can start on May 1st, or whatever.  Yes, you can win some projects that way, but consider how much time is invested in getting somebody to that proposal stage and realise that optimising for that conversion rate is probably single-handedly the best thing you can do in your business.

NP: Because it becomes a numbers game if you work to that method because you’re putting out the cost, you’re putting out the line items, you’re saying we’re ready to go, and this is the solution, as opposed to putting in the time, as you say, to try and actually get to the root of the problem and to re-iterate the points, the problems, back to the client so that they truly know.

BD: Yeah, one of the perks of being an agency was we had so much billable time for sale each month, we were doing a lot of proposals at any given time.  There were times we were doing just dozens of proposals a month and it became very much a scientific numbers game for us.  It became a matter of, well, if we can look at our entire start to finish sales funnel as a funnel, and we’d have this many leads entering it, we’re doing this.  This is our process for getting a lead to getting to the point of getting a proposal in our hands.  We would experiment.  We would say well what’s, on proposal A, let’s not include packaging, but proposal B, let’s include packaging.  The problem is it’s a lot easier to do a statistically significant spot testing when you have thousands of cases, so it’s a little more fuzzy, but over time you can really get a feel.  You should always follow up with people if they deny your proposal and find out why.  What about it, what do they want to see that would have sealed the deal for them, because ultimately the reason we’re not hired is due to risk.  They feel that we’re too high of a risk to make a return on their investment, the budget that they put aside for the project.  So you want to know what is it that people, when they’re reading your proposal, what makes them put it in the trash bin.  What specific thing do you not answer?  What question are you not able to answer in your proposal?  And know that if you could answer that question, you could have won that project.  So you want to be able to figure out, don’t just shoot in the dark, try to understand why you’re winning and why you’re losing projects.

NP: So how did you get to that point of having that level of understanding because, as I said, many freelancers would just get that email in their inbox, hey, I’m looking for a new website, I’m looking for a new web app.  They might even have that first initial chat and then just jump straight in and send out a proposal.  What’s the difference there?  How did you get to that level of understanding?

BD: The distinction between maybe some of your audience and what we did was, most of our projects were six figures and up, so it was never project request, 30-minute phone chat, and then proposal.  There was a lot of groundwork done.  A lot of the times our proposals were almost formalities.  We had done so much discussion and again, we had already sold them something, the mapping session where they’re talking with us for days straight, so they’re thinking, do I like these guys, do I trust them, are they capable?  They’re going to know that usually by the end of the day.

But if you are dealing with smaller budget projects that have quick turnaround times, what I would do, and this goes for all proposals is I would really – that first meeting is typically an interview process.  It’s an interview of the client interviewing you.  Are you capable is what they’re looking for. If you can turn that first meeting on its head and make it so you’re interviewing the client or you come to the table with a list of questions or criteria that you’re looking to get answered.  That alone is a really good way to solidify your professionalism, because people want to work with professionals who are capable of reproducing consistent results again, again and again.

So you come to the table and you take charge of that meeting.  You don’t let it be open-ended and, hey let’s talk.  You have specific questions that you get answers to.  That will help because you should record all that data and recycle it in your proposal.  Throw it all back at them.  Ask them point blank, what is this problem that is causing you to think that this project needs to be done?  Get their response during that meeting and then throw that right back in your proposal and say, this project which is the result of XY and Z and so on.

So I think the proposal, I assume most people who are listening have some sort of face-to-face or phone call meeting with most clients before they end up putting a proposal.  If you’re bidding on an Elance or Odesk project, maybe you don’t have that and then it’s going to be much more of a commodity like who’s cheapest?

NP: We’re entirely trying to move people away from that concept.

BD: Don’t do that.  I would just really focus on making yourself a professional, coming armed with questions and structure that show that you know what you’re doing because the biggest risk in our industry is flaky freelancers.  So you show that you’re not a flaky freelancer and you are more than certain to get the project.

So it starts with that first meeting.  It really starts with that first reply to their email when they contact you.  I usually send off a few qualifying questions just to make sure that... I want to know if they’re asking for a $500 YouTube clone.  If they are, I’m not even going to meet with them.  It’s a waste of time.  But, I want to know who are they, what do they do?  I have a few, five or six, questions that I usually ask when that first email comes in.  Not everyone responds to that.

NP:  True.

BD: But the goal wasn’t just for the responses, it’s just a show again.  I know what I’m doing, I do this a lot, here’s what I need to know.

And then from there we go on to that first meeting which again is structured and time-boxed.  I’m in control, I’m running it.  I specify the questions.  They’re not the ones asking me like, so what are your credentials, how much have you done in the past?  I’m the one coming to the table with, this is what we’re going to do.  Then finally, the proposal is the culmination of all of that.  And it’s this is what we know about your project, this is what we know about your business, this is why this project needs to happen, this is how we propose that we are the best possible team or I’m the best possible person to do this for you, and here’s why.  And then finally close with the typical here are the pricing options and, some sort of urgency.

I always like to create a sense of urgency and that could be if you have a project queue or something.   We got to the point where we had a waiting list of up to six months at some point to work with us which is a good position to be in, especially when you’re running with fixed expenses like employee payroll.  So we would tell them we have a very busy schedule, we’ll be able to fit you in starting so and so date, once we get your initial refundable deposit, we’ll be able to lock you in on that date.  And, obviously, should anything change, we can always, if one of our current projects drops out or something, we might start sooner.  And that’s typically how it was.  But again, the big thing, and I want to stress this, is when we got to really becoming a mature consultancy, the proposal was being delivered to an existing paying client and that was a really big deal and I would explore ways that you can do that, either through...  I mean, there’s so many ways to do that.

You could sell... say you have paid products like an e-book that a client could buy and then they become a client or a lead for an actual engagement.  It’s so much easier to sell them at that point because there is already cash flow established.  So I would look at ways that you could do that.  There are a number of different ways that that could happen.  We chose a paid estimate/road mapping path to do that.

NP: Okay.  You mentioned as well about the pricing packages.  So essentially you’re competing against yourself on price.  Like you say you’re not... you take your competing consultancy, your agency almost out of the equation and you bring it all back on yourself.  Did you find that once you started to package up your pricing options, that there was an increase, a noticeable increase in proposal acceptance rates?

BD: Not only that.  Most people ended up going for the higher packages anyway, so yeah, people converted more.  It got to the point where, let’s say they have... let’s say we give them the $400,000 option, or $600,000 option.  Most people and maybe that’s an extreme example, let’s say $4,000 or $6,000 option.  A lot of people are going to say if I’m already going to put $4,000 into it, $2,000 more isn’t really that big of a deal and I don’t want to lose out on all these other benefits that I could get.

So a lot of things we would do, like a good example would be, we had a client who needed a rewrite of a Microsoft Access application.  It was a 10-year old app, it was very crappy and they wanted it made into a web app.  So we came to them with two options.  We said, you can let us recreate it as a web app.  It’s going to cost you around, it was three or four hundred thousand for that rewrite, or you can get the rewrite plus our team will interview your employees who use this application daily internally to do their work.  We will figure out where they’re getting stuck, what processes are taking long to do and if we can save a few hours per employee per week in productivity, here’s some basic math.  You’re saving hundreds and hundreds of thousands of dollars cumulatively each year if you were to spend this much more to make it so.  We’re not just doing a rewrite, we’re doing optimisation too.  So we’re able to say, look, if you want to do the cheap route, and just do the thing that you came to us for, great, here’s what it will look like.  Or, you can pay this much more and save a lot more long-turn, you know long-tail.  Obviously it’s impossible to test this, but my hypothesis is if we were to come to them with just the rewrite, which is what they asked for, it would have limited how much we, we would not have been able to charge what we did, but on top of that, if we were to come to them with only the optimisation plus rewrite, they may have said we don’t need all this, we’re going to keep looking around, look for that rewrite.  So, by saying, do you want to pay us $400,000 or $600,000, it became a matter of, at the end of the day I don’t care which one they do.

NP: You get the business or you get the business.

BD: Yeah, exactly.  So that was a big... and it gives... people like options.  It helps... there are all these psychological theories like price anchoring that come into play.  There’s the ability of... there’s the matter of choice.  The client has a choice.  It’s up to them.  It’s the same reason when you go to buy a car.  You want to play with, do I add this trim, do I get these wheels, do I get the stereo inside?  We like having options, right?

Now there is something to be said about too many options which is why I’m not a big fan of the formal estimate, like line items stuff.  I think that overall packaging that reflects what tomorrow will look like... the packaging that one client example I gave was either recreate the app you have now, literally nothing will really change in your business, except for the maintenance cost that you have now with this existing 10-year old app.  Or, everything we just talked about plus a lot of saved productivity per employee.  You have 20 employees, times 20 each week, that’s saving 20 to 30 hours a week in time.  Twenty to 30 hours a week times 50 – that’s saving a lot of time.  Let’s imagine that each of your employees makes $40,000 a year, simple math will let us see what this will add up to long-term.

So, it was basically a competition between do we want business as usual or do we want business as usual plus a lot of optimisation that will make our business even better.

NP: That’s fantastic.  It sounds like a good way to go.  It’s something I’ve worked with as well myself this last year or so and pricing against yourself just seems like such a solid way to go.  You only have to look at any service online to see that everybody does it.

BD: Every SaaS has it.

NP: Fantastic.  Well, thanks very much Brennan.  I won’t keep you any longer.  I know you have other things to be getting on with.  So, if people would like to find out more about you, where do they need to go to check you out?

BD: The easiest place would be  I also have a newsletter which is where most people find me.  Freelancers with an S, weekly. com and it’s just a weekly newsletter that I send out.

NP: That’s fantastic.  Well, thank you very much Brennan.  Cheers.

BD: Thank you Nathan.  Yip.  See you.

Check out the book here: The Designer's Guide to Proposals


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