Captain’s log, stardate 20220526
Fellow list member Daniel Butler wrote in to ask a question about my 5-page proposal template (shared with permission):
Loving your content so far, found you through The Futur YouTube channel!
I’m a recent subscriber so forgive me if this question is answered somewhere in your materials and I just haven’t seen it yet – feel free to direct me to a link.
My question is:
In your proposal template, under each option, you have 3 line items for each deliverable/feature and another 3 for benefits.
I understand this is just a template but i wondered; are your lists often longer? or do you try to keep it close to 3 “high level” things?
If for example you are creating an app proposal, it’s common to have quite an exhaustive list of things you plan to build or do, mainly used to justify your quote, as a way to limit the project from spiraling out of control and to be a yardstick for “done”.
The flip side is it’s hard to know before you start exactly what should be included, so you can be held to ransom on this laundry list.
Best wishes from Oslo
(working for a digital product and branding agency)
The “trick” with value pricing is to define the value first, set the price second, and decide on the scope last.
How do you define the value?
You guesstimate the value based on having The Why Conversation with the client in your initial sales interview.
How do you set the price?
You set the price based on a fraction of the value to the client. In a value based proposal, I would come up with three prices to give the client a few options to choose from. You can use this value pricing calculator to see what I mean.
How do you decide on the scope?
For each price, pick a scope that you would be fist-pumpingly happy to deliver for that amount of money.
As a rule of thumb, pick a scope that you’d barely be willing to do for half of the price.
For example, if your price for option 1 was $10,000, then design a scope that you’d begrudgingly do for $5,000.
Once you’ve decided on a scope for each option...
How much scope do you include in the proposal?
In each option, you should include just enough detail about what activities you will undertake and the artifacts you will deliver to make the option feel tangible to the buyer.
This typically amount to 3-6 sentences of description, and 3-6 bullet points of features and/or deliverables. Just the high level obvious stuff.
I would NOT include an exhaustive list of what you predict the entire scope to be. The proposal is NOT a requirements/specifications document.
How do you keep the scope from creeping if it’s not listed in the proposal?
You keep the scope from creeping by defining a progress metric in the list of benefits for each option. There should be a benefit for each feature/deliverable. Each benefit should have a word like “increase” or “decrease” in it.
“Update checkout flow on the website to be easier to use on mobile devices”
“10% decrease in cart abandonment on mobile devices”
NOTE: The are potentially other benefits that the client might receive from an improved mobile checkout flow (e.g., increased revenue, bigger basket, more market share), so how do you know which ones to list?
The ones that you list in the proposal should be the ones the client said they wanted in the sales interview.
If you didn’t find out what they wanted (i.e., their desired business outcomes) then you might want to keep practicing The Why Conversation.
P.S. Would you like help writing your proposals? I do proposal review teardowns in my group coaching community (aka Ditcherville). You can join hundreds of folks just like you who want to make more money without working more hours.
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I hope to see you there!