Partners at management consulting and other professional services firms, client partners at IT services companies and sales heads at SaaS providers can probably all agree on one thing: pricing their offerings right and submitting winning proposals is getting to be increasingly challenging.
Pricing of services depends on reliable effort estimates, a well-defined resource mix and approved unit rates. On almost every deal, some or all of these variables are subject to debate and modification before final signoff. Reasons for this can include:
• Billing rates that vary with resource experience/expertise level, engagement duration, geography, state of the customer relationship, etc.
• Deal components that are priced based on how they are bundled and delivered, such as time and material mode, fixed price or subscription.
• The need to source certain elements from third-parties.
In most organizations, this data resides in spreadsheets managed by sales/account managers, and changes often come from different stakeholders in an asynchronous manner via phone, email, etc. In such a work environment, the risk always exists that all changes do not get reflected in the final proposal document sent to the client.
Developing proposals for complex business-to-business (B2B) solutions often involves individuals from a number of teams working in tandem. Different sections of the proposal are written and reviewed in chunks before integration into one document that is finally reviewed and approved. A key risk inherent in this way of working is that certain individuals may not use the authorized versions of proposal templates. Then for legal/branding/other reasons, sections not written using the latest templates may need to be rewritten and ported to the latest template. This is an avoidable waste of time and can result in delayed proposal drafting, review, approval and, hence, submission.
Using Technology To Develop More Accurate Customer Proposals
The above-mentioned impediments to efficient pricing and proposal development can be easily addressed by putting technologies in place to ensure that across the organization, everyone consistently uses the same system to input data, make changes, generate the price for approvals and, finally, feed the approved price into the proposal document template.
This merits a solution that streamlines the selling process from configure to price to quote. The following are key action items to help your team envision and execute such a solution:
• Build a central repository to house all your approved proposal templates and key contract clauses to ensure quick turnaround for drafting, editing and amending of proposals.
• Empower sales teams with an intuitive user interface that incorporates product dependencies and pricing calculations with access to your contract repository.
• Envision a data-driven approval matrix based on deal size, customer, geography, margins, etc. For each quote, all the relevant stakeholders must be alerted in real-time to any changes and their approval must be required to move the proposal to the next stage.
• Define workflows and member responsibilities to ensure effective team collaboration.
Sales leaders and partners can then leverage these functionalities to not just sell more, but also manage their practice/business better. Four key strategic areas can be identified in this context:
Analytics To Aid Decision Making
• Run, what-if scenarios around resource mix/utilization and deal margins to make better-informed pricing decisions.
• Analyze the impact of alliance partners in terms of deals won and lost.
Managing Individual/Team Performance And Productivity
Monitor the productivity and success of individual sales reps as well as sales teams working in specific geographies, industry sectors or service lines/solutions. Specifically, insights can be harvested around predilection to offering discounts, delays in approving quotes or proposals, etc.
Proposal Document Management
• Build an interconnected system to allow all members who are part of the chain to collaborate in real-time on drafting, reviewing, amending and approving of proposals.
• Devise mechanisms for stakeholders to highlight changes that are instantly visible to everyone working on the specific proposal. Thereby, expedite discussions around why something was written in a certain way (or not) so that a final decision can be taken and recorded.
• Integrate with external systems, such as enterprise resource planning and billing, to track contractual obligations, ensure appropriate delivery of services, raise invoices and recognize revenue.
• Bridge the gap between your sales and service/support teams by providing your service team with access to key data points, such as contracts, warranty entitlements, etc.
As someone who has been part of the professional service community for a decade, I have seen the impact technology solutions can make to sales effectiveness, organizational productivity and profitable growth. Technology’s Midas touch continues!