As the economy tightens and competition becomes more fierce, electrical contractors must develop persuasive proposals that differentiate them from competitors, convincing prospective clients that their company is right for the job.
The best advice for developing a persuasive proposal is to learn what is important to your client, according to Peggy Pound, president of The Pound Group, Las Vegas.
“Too many times, proposals are developed based only on the information contained in the request for proposal (RFP) or on what is assumed the client wants or needs,” she said.
Typical information to gather from the client could include what has happened on other projects, what difficulties affected previous work, and how issues and concerns were successfully handled.
“When a clear understanding of a client is developed, the proposal response will be successful,” Pound said.
In addition to spending time with the client, Jason Krieg, vice president of sales and business development for Valley Electrical Consolidated Inc., Girard, Ohio, advises contractors to clearly understand the project’s scope of work and how the client wants to see the proposal in terms of its breakdowns and method alternatives.
“Once the owner’s goals are clearly understood, the proposal needs to define what portion of the scope the electrical contractor is responsible for,” he said.
Olin Jennings, chairman of The Jennings Group, Columbia, N.J., said not to focus entirely on the client as a source of revenue, but rather as a person with a problem.
“Focusing too often on what the terms of the project are instead of on the client relationship and developing a project vision leads to routine proposals,” he said.
The right steps to take
According to research by PSMJ Resources Inc., proposals in the design and construction industry have only an 18 to 23 percent win rate. The good news is that just making a few basic changes can increase that percentage, according to Clare Ross, chairman of Clare Ross Organization Inc., Chino Valley, Ariz.
“A good proposal starts with good marketing. A contractor can increase its win rates by identifying the markets the company serves, targeting clients that have projects that the company wants to work on, and building relationships that will enable the contractor to identify potential clients’ issues and concerns,” Ross said.
Contractors must realize that a proposal is a sales document, not a price quote or an outline of the contractor’s history.
“Developing a persuasive proposal requires that the contractor demonstrates that it understands the client’s needs and problems and offers specific recommendations for solutions,” Ross said.
Another step in the development of a good proposal is the inclusion of a value proposition, which demonstrates a compelling reason to choose the company.
“For this, the contractor has to know the client’s business as well or better than they themselves do, so it can demonstrate the tangible benefits of hiring the company, whether it’s saving money, time or solving whatever issues the client has,” Ross said.
Jennings recommended that electrical contractors start with a vision for the proposal and develop a passion for the project.
“And passion for the project and for truly helping the client comes through in the proposal and presentation and differentiates the contractor from its competition,” he said.
Develop the right mind-set
Customers can tell when you really care, according to Jennings. Developing the right mind-set to cultivate an effective process requires that the contractor start by asking questions, such as what is the vision for the specific project and for the client relationship. How will the company provide value and serve as the best resource for the client?
Although it may seem insignificant, Pound suggested contractors follow the RFP exactly as outlined, even if it doesn’t seem to flow well. The client typically has developed a checklist or ranking based on the RFP, and the contractor that makes the proposal reviewer’s job more difficult may lose the contract award.
“However, if you follow the RFP as outlined, along with the information you gathered from spending time with the client beforehand, your proposal will be a great one,” she said.
For Ross, value is the key criterion for a persuasive proposal.
“The RFP doesn’t necessarily represent the true goals that the client envisions for the final product and how it will be used. Focusing on the client’s needs enables the contractor’s proposal to demonstrate the value the company can supply to the project,” he said.
Krieg advised, however, not to lose sight of the need to include the basics in the proposal, such as the project scope, materials and the services that will be provided.
Developing a proposal is a very complex process with many things to consider. The contractor must exhibit intuition. For example, according to Pound, the contractor must determine the needs of the project and what the client is really asking for in terms of how the buildings will actually be used.
“In addition, the contractor needs to understand the outside influences being exerted on the project, whether they are from the community or political or environmental issues, because not every project is driven only by the bottom line,” she said.
She also said to include an issues and solutions section in the proposal, which can be provided in a separate section or within the executive summary.
“The ability to provide solutions comes from having met the client and listening to what their concerns are. The contractor can use the proposal to offer solutions to the outside influences that the client has revealed and demonstrate its understanding of the entire project above the construction issues,” Pound said.
Differentiating the firm
The best way to differentiate a company from the competition is by not talking about past experience and the team.
“These are important aspects of a proposal certainly, but what will truly differentiate the company is its approach to the project and a demonstration that it understands the client’s needs and how the client benefits financially from choosing the company,” Ross said.
For example, an electrical contractor can have a major impact on the client’s bottom line, particularly when working on a client’s mission-critical facility.
“Contractors can differentiate themselves by outlining what the impacts are of specific solutions being offered on the client’s profitability, whether it’s the schedule, design work, energy consumption, products, etc.,” Ross said.
Krieg said the proposal should demonstrate a deep knowledge of the project and concern for the client’s best interests.
“A proposal that differentiates the contractor from its competition demonstrates that the company is able to deliver the necessary installations and services and clearly defines the scope of work so that waste, change orders and overlaps are reduced as much as possible,” he said.
According to Jennings, most organizations have not given enough thought about what differentiates them from their competitors, either as individuals or as a company. Therefore, what they say in proposals or presentations is indistinguishable from everyone else. To be effective in selling and in writing proposals, Jennings recommends that the contractor start by creating a two- to four-sentence statement of what makes the firm unique from everyone else. This is a revealing exercise, he said, because mostly people talk about what great jobs they have performed in the past, their contracting expertise, the experience of their managers, and so on, which clients expect.
“However, what truly differentiates one contractor from another is more intangible, more focused on how the contractor approaches a job, how it invests in a client relationship, and how it adds unique value that exceeds the client’s expectations,” he said.
Technology and proposals
Various technological options are available to electrical contractors to help make their proposal stand out, such as Photoshop, word processors, spreadsheets, and similar software. Pound suggests looking at magazines to get a feel for what catches the eye.
“Make sure that your proposals are not solid text, but intersperse photos and text boxes with relevant ideas. Use several columns to break up the text, and make it easier to read and include captions for pictures. Use marketing and IT departments to make it easier to retrieve the necessary information from computer databases about project experience and personnel resumes,” she said.
Ross warned, however, not to become over-dependent on technology and to remember a persuasive proposal is a sales document that needs to be customized to the client and the project.
The biggest benefit of modern software in creating proposals is that it allows the contractor to edit and revise proposals quickly and to polish the prose effectively. In addition, Internet-based communication, such as e-mail, allows the contractor to send its proposal ideas electronically, share files and communicate more efficiently with the entire team.
“When working regionally or nationally, it’s important to be able to communicate long distances and provide quick responses to client concerns,” Krieg said.
BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at 410.394.6966 or firstname.lastname@example.org.