The proposal and pricing process is top of mind for digital agency owners and with good reason. It’s the first opportunity to set the bar for the engagement. But more than that, it’s the part of the business that you need to do really well: if you do, you’re going to improve your win rate; if you don’t, you’re going to waste a lot of effort. When that happens, it’s a double-edged sword. You’re less productive and you have less to show for it.
With pipelines still on the slower side, the stakes are even higher.
We hear agency clients struggling all the time with proposals and pricing. They know they need to do it better and faster, but they think they have to do it themselves.
That’s why we wanted to sit down with Joe Ardeeser, a man who, as a child, enjoyed optimizing the preparation of Halloween candy bags for trick-or-treaters. “I really like thinking about things and breaking them down.”
Lucky for us, he also really likes proposals. “I’m an odd duck. I like proposals. I like thinking about scope of work. I think about it a lot.”
So, we asked the former agency owner and founder of Smart Table to give us his “Halloween candy approach” to getting a fast, winning proposal out the door.
He took a minute to contemplate his childhood peanut butter cup distribution setup, and then went straight for the jugular.
“When I asked myself, ‘How do I create a system to generate a scope of work as quickly as possible,’ the solution was simple: create a product catalog.
Here’s what a sales catalog looks like and how it can solve some of your agency’s biggest problems.
What Is a Sales Catalog?
There’s a lot to proposals: your team, case studies, testimonials, your terms. But from proposal to proposal, what really changes? Just the specific services that each client is requesting.
That means most of the work is already done.
A lot of professional service providers don’t think this way, Joe notes. “They’re grabbing a line item from this proposal, another line from another proposal, and another line from scratch, and they’re Frankensteining them all together.”
Every time a proposal goes out, it’s like reinventing the wheel. As owner, you probably need to be closely involved, if not completely in charge, because there’s so much that could go wrong. Leave a proposal in the hands of someone non-technical, and the odds of scope creep get pretty high.
That’s where a sales catalog comes in: It’s a customizable menu of all your services, with all the upsells and fine-print baked in.
A catalog might sound like extra work to put together, but really it’s an incredible long term investment, not just for sales, but operations as well.
Here are a few of its benefits.
Get Out of the Sales Process (and Still Sleep at Night)
Agencies that start as a partnership will have one of the founders doing sales. It’s the hardest hat to stop wearing as you scale.
As a digital agency, you’re thinking, “the stakes of creating a proposal are so high.” Scope creep is an issue when the CEO is creating the proposal, let alone a salesperson who’s generally going to be non-technical.
But if you can create a catalog, all of a sudden, your salesperson just needs two things: to understand the catalog and to be a good listener.
Then, sales becomes about putting the catalog together with the needs, “The client wants a blog, an ‘about us’ page, a homepage, and some ongoing SEO. If the salesperson can grab those line items that have been defined in a comprehensive way already and then add them to a proposal, everything starts to change.”
“Good luck training a salesperson without a catalog,” Joe says. “‘If you could just read over the last 10 years of my emails and every recording that I’ve ever had, and then just mimic me, that would be great.’ It’s just not possible.”
Improve Turn-Around Time
When a client sits down for a sales call, they’re ready and excited. But if it takes two or three days to put together the final pricing, they might keep shopping around.
“An extra day or two could be the difference between them engaging with one of your competitors in building a lot of rapport,” Joe says. “They’re loving your offer on the sales call, but when you finally submit your proposal, it’s old news. Now you’re going against the grain and you’re on the defensive.”
We’ve put that theory into action with our sales process: We have a spreadsheet that allows clients to select their options, and within an hour of a call, they know what their price will be. It makes such a difference.
Even if they come to the conclusion, “Oh, this is too expensive,” I’d rather have them come to that conclusion on day one, then four months into the sales process.
Clear the Fog
Another issue Joe hears about a lot from agency owners (and experienced first-hand): proposal fog.
“You’ve got 15 minutes between two meetings, you’re trying to get a proposal out, and you’re staring at that blinking cursor.”
A catalog kills the fog:
“It brings clarity,” Joe says. “You add in your line items, and each line item already has a lot of thought put into it: restrictions, limitations, what’s included, configurations, upsells. Once you have that built into an ongoing system, proposal writing can darn near be fun.”
Maintain Brand Promise (without Micromanaging)
Think of a catalog as a bridge between your brand and your client: When you set the parameters of your offer, it becomes easy for a co-founder to delegate to the rest of the team.
“The CEO or some leader at the company creates the template and the line-items. That’s the risky business. Then the salesperson can add them into the proposal and adjust them a little. If it’s not seismic, they don’t even need approval: They’re just playing with the twigs or the leaves, not the trunk.”
A CEO has a lot of fish to fry. As long as there is some buffer built in, you don’t need to quibble with $100 of profitability.
Avoid Scope Creep
Everyone wants more. Everyone wants to pay less. A clear pricing conversation is an agency’s best line of defense against that trend.
“There’s an acronym in our industry, PITA,” Joe says. “But we’re often the pain in the…butt, right? We get irritated at the customer, but maybe we didn’t describe what we’re doing.”
Be clear about what you offer and your customers are more likely to be on board.
“Say you offer social media management. If you say, ‘I will manage your social media for $1,500 a month, and I will take care of everything for you,’ you’re courting disaster.”
Imagine instead, you write a bulleted list that says, “10 posts per month, 24-hour turn-around, etc.” and it also spells out everything not included, for example, no stock images.
“What you’ve done is you’ve built a fence around your work, and you have handles you can grab onto.”
Make Upsells Easy
Once you create a well-defined line-item, it becomes easy to offer additional options. If a client wants more than the 10 posts per month, include a cost for each additional post. If they want stock images, add that option in, as a box they can check.
Take, for example, comment interactions. A lot of people who contract social media don’t think about that element – but they’d be happy to pay extra for it.
“What you’ve done there is you’ve provided clarity on the base offering, and the configurations make it clear that something’s not included if you didn’t check it. That’s all part of the signed contract. If they come to you after you get started and they say, ‘What about interactions?’ you can say, ‘We’re happy to help with comment interactions, but it’s not included in our base cost. We offered you that and you didn’t select it.’”
Now the conflict is diffused. “But if you didn’t talk about it at all,” says Joe, “all of a sudden, you have a challenge.”
Don’t Get Burned Twice
Anyone who works with clients has been there: Every time you get burned, it’s a learning opportunity.
Whether you lose an opportunity to sell a bigger package or eat the cost to avoid a misunderstanding, if you can learn from it, it’ll only benefit you in the long run.
“Take that pain,” Joe says, “Channel that energy towards fixing your processes, so something like that can never happen again, or at least is massively mitigated.”
For example, maybe you sell a blog for $1,000 as part of a website package. After it’s delivered, you realize you made $25 per hour.
“That’s when you go back and say, ‘Where did we leave ourselves open here?’ Then maybe you can clarify the included layouts, as well as everything that is not included. On a blog line item, you could have upsells – author, bio pages, or related blog posts – and each of those have a little price, and the customer can just click on them.”
Joe recommends defining your opportunities and checking your base costs. “But if you don’t have a repository, if you don’t have a catalog, you can’t do that. You’re just hoping that you remember next time, or you have it written down.”
For example, if your client expected that comment interaction was included and you do the comments to avoid losing the client, “you go to your template, you go to that line item and you add an upsell. As you’re doing the comments, you’re thinking, ‘I hate responding to comments.’ But really, you hate responding to comments without getting paid.
Maybe comment interaction is actually your highest margin item, because you can outsource it to an entry-level person.
“Take that pain and say, ‘I’m not going to do this again.’”
Systems Are the Secret Sauce
Don’t underestimate the benefit of building a catalog and making improvements to it. It’s a lot of work, but the good news is: getting started really is the hardest part.
The biggest hurdle that you’re going to have to face is moving from not having a system to having a system. From there, you’re just tweaking and refining as you learn.
As you’re working through the proposal process, ask yourself what is causing you the most stress. If you can’t get proposals out fast enough, feel like pricing is a nightmare, and don’t get excited about figuring it out, you might need a solution from outside your organization, like PriceTable.
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