If you’ve ever been approached by a client and want to know what to consider when scoping, pricing and writing consulting proposals, this article and podcast episode is really going to help you out.
Today, we’re continuing along the theme of consulting work, this time diving into how to gather the information you need to scope, price and write a consulting proposal.
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Writing consulting proposals that convert to client contracts starts with asking the right questions during your exploratory calls. Through five steps, you’ll learn the key things you need to know from the client that will help you decide on your solution, your team and your pricing.
A client of mine was recently approached with a consulting project, which she wasn’t sure how to price. And although pricing is a question I get asked about a lot, it was a longer answer than she was expecting. As we talked through her prospective client’s goals, I shared my process for scoping and pricing consulting projects, which I broke into five key steps.
Writing consulting proposals that fit where the client is at with needing what you offer is all about understanding their need, budget, timeline and ultimate goal – the outcome they want, and then being prepared by doing your research.
So here we go – the five key steps are:
- Needs analysis
- Timeline and budget
- Deliverables and plan
- Proposal and pricing
- And Getting to an Agreement
Let’s go through one by one.
#1 – NEEDS ANALYSIS
– enter the initial conversation with curiosity
I start with a “landscape analysis” to fully understand where the client or the organization is struggling and why they reached out to me.
At the very beginning of the process for scoping a consulting project, you’re in discovery mode. In fact, this may be your initial ‘free’ strategy consult – mine is an Exploratory Session or Strategy Discovery Call.
Simply asking questions and using active listening can help the client clarify their goals and feel understood.
In your first meeting, your main aim should be to let the client explain their context and needs, but make sure you start with a bit of rapport building to ground the relationship.
You might ask:
- What prompted you to reach out?
- What’s the challenge about the current situation?
- What are you scared of now?
- What would success (with the project) look like to you?
You want to ask open-ended questions and provide real-time support. What I mean by that is, to ask clarifying questions and reframe the challenge where necessary. And to do that you need to use active listening. Because at this stage, the conversation is all about understanding their business and eliciting needs.
You don’t need a whole history or masses of details, just a high-level view.
And this is not the time to be telling them how great you are or what experience you’ve had – that will be clear just by asking good questions.
You want to engage in what they share; both in the business and in them as individuals, and as the person who is mostly likely going to be championing or leading the work. Be reassuring and enthusiastic for what they are looking to achieve; it goes a long way that they see you as a partner or collaborator not just hired help or someone that’s going to be judging them somehow.
You should also remember to reflect back what you’re hearing to see if you’ve understood correctly. Don’t assume you got it. The client gains so much just hearing their challenge or problem conveyed back to them and can clear up any nuances.
Propose what you see as the client’s main needs to check understanding of what they say they need help with.
After this stage, I focus on visioning questions, which encourage the client to imagine their best-case scenario. The questions are all about highlighting what’s possible, and allow you to understand exactly what the client needs from you as a consultant, so you don’t have to fathom it out if your proposal isn’t accepted.
Visioning questions sound like this:
- What would be possible for your business if all of these challenges were resolved?
- In the context of this project, what’s your ideal outcome?
- If our partnership went perfectly, what would be different at the end of our time together?
#2 – TIMELINE AND BUDGET
– without these you can’t move forward
At a certain point on the call, you’ll need to find out what their timeline and budget are, and there are many ways to approach this conversation. Sometimes I use a pre-survey before the scoping call in which they answer a question on “project timeframe” and “project budget”.
On the scoping call, you can get a better sense of their timeline, asking about it from a strategic point of view, and even create urgency. For instance, by asking:
- What are the drivers for the project, how soon does this need to happen?
- What’s the cost of not taking action?
You’ll also want to clarify your process and expectations of how you work, and manage the expectations on both sides for the timeframes. Identify how the project fits with other work they have going on too, where there are possibly co-dependencies.
Check what budget they have in mind for the project. Without a budget, you can’t move forward. And often, your potential client will hem and haw about the budget, so you should ask for a ball park budget. Can you invest 40-50k on this project?
Other times, I host the scoping call first and tackle budget after I have clarity about their goals and they recognize that I understand their challenges.
After I use this kind of approach, the client has often told me they felt like I had a good understanding of their needs, and were actually able to have better discussions internally because of the clarity I’d brought them. And they will ask me for an estimate.
You can follow up by saying “I work with clients with a wide range of budgets. Now that we’ve gotten clarity about your goals, would you give me a sense of what you’re planning to spend on the project? I’ll get back to you with a few options of ways to match both your goals and your budget.”
Let them know when you’ll send them an outline to check first of all that you’re aligned on objectives for the work.
#3 – DELIVERABLES & PLAN
– play back what you understood they’re looking for
Follow up with an email that shares a brief outline of what you understand the project proposal needs to be, from the conversation about what they are looking for, and the outcomes they’re expecting from you.
It’s critical to understand the scope and deliverables, and provide a high-level plan, even if a detailed plan comes later. You need to be clear what ‘consulting’ means to them, because there are many different types of consultant, it can vary from industry to industry too. But even the same “type” of consultant can go about their process a little differently. So don’t make assumptions that they would know what your process and type of consulting is.
If you fail to clarify these things, you’ll probably experience what we call “Scope Creep” where it’s not been clear where the boundaries of the engagement or project lie, and what is an opportunity to do more but ‘outside of scope’ for the current project.
Deliverables from consulting or advisory assignment are along the lines of a detailed report with observations, quality testing, areas of improvement and/or key recommendations. While this is an ‘output’, the outcomes or gains come from the organisation implementing those recommendations, making the improvements and realising the benefits. It can happen in the short, medium or longer term – but rarely immediate.
That’s very different to deliverables from an implementation project, which are much more tangible in the immediate sense of what gets done, what is put in place for the client.
This is your opportunity to demonstrate that you fully understand their challenge. Here’s the template I use at this stage for sending an email with the outline of the deliverables and plan. Remember it’s not a full proposal at this point.
This briefing offers a preliminary outline for how we might work together on [the challenge], to check we’re aligned on the objectives and vision for the work. From here, we can shape it further and add more details and a high-level plan.
Based on our conversation, it sounds like you’re most interested in [activity focused on removing the problem/pain point]. With [this situation resolved], it will ensure [ultimate goal/solution/gains].
Through our work together, we’ll [your usual process] and build out the following: [list deliverables].
We can talk more about how much support you want throughout the process – for example, if you want us to [carry out these specific tasks versus offer more oversight to the implementation team who will be doing the work] How does this sound?
I’m excited about this project and to talk more about how we could work together!
Let me know in what format you need a formal proposal to be submitted and any threshold budgets for procurement process that you think we should be aware of.
Tell them when they can expect a full proposal from you and what form that needs to take. And that’s it. Close with your normal sign off and email signature,
#4 – PROPOSAL PRICING
– give options to align on cost-benefits
Send out in document form – attached to an email or by post whatever is the client’s requirement and in line with their procurement policies and procedures.
We call this a letter of engagement – it’s the formal proposal that sets out the above, adds any further details the client provided or asked for, and includes your terms and conditions [agreement].
I always advise providing three pricing options for them to consider. When you give a client three options, you give them greater discretion and “buy in” to the process.
- Low-tier: This price is the one that reflects what you know their budget is – it’s the no frills option – just the very basic version of the project or the first stage of the work.
- Mid-tier: This is the optimal price for you and includes all of what the client said they wanted to achieve in the timeframe set. You’re trying to guide them to this option.
- Premium: While it’s always awesome when a client comes in at the highest tier, and wants the full works, this option is primarily there to help make the mid-level option look reasonable.
You can use a cover letter to recap on the outline, since not everyone who needs to see the proposal wants to wade through all the details – they want the key bits, like an executive summary – purpose, deliverables and price. So, a three-tier approach also works well for them to get a clear sense of what they’re actually getting for their money.
A cover note is also an opportunity to point the client in the direction of which option you think makes most sense – usually the middle one is the most popular
This approach can work very well in your favour – whilst serving the client’s needs more fully too, assuming you’re not overselling them what they don’t actually need.
I’ve had non-profit clients who are super price-sensitive and you’d expect them to always stick with the lower tier that matches their budget. But because you took time to build the relationship and trust through the scoping process, they often take the bigger scope, because they know they need help with all of it. So they feel confident to commit to more than just the basic project or first stage.
And the 5th key thing is pretty obvious and straight forward, but critical nonetheless.
#5 – GETTING to AGREEMENT
– ensure you follow up and remain flexible
Once you’ve submitted your proposal, and I advise you to indicate to the client when you’d expect to hear back. Some companies even go as far as to say ‘this proposal is valid for 7 days or 30 days’. I don’t do that, but what I do is say I’ll drop them a line in a few days to see if there are any questions that come up after reading through the proposal.
And then I make sure I DO follow up in a few days, and I usually offer to (a) hop on a quick call to address any queries and (b) arrange for a meeting if there are others involved in the decision. This brings me into their internal discussion and decision, and it becomes an informal pitch that usually feels very collaborative.
Quite often, if it’s not about the actual scope or deliverables or project plan, what comes up is when someone in the decision-making process on their side isn’t seeing the need or urgency, or isn’t feeling the value for money. This is a chance to help the sponsor of the project ‘make the internal case’ or to consider again the budget or scope of work.
You don’t want it to become a pricing discussion – so much as a cost-benefits conversation. It’s about aligning what they want with what it costs to deliver it. You can take bits out, as long as they see the impact this will have on the value in results terms.
So that’s it, five key steps and the key information you need for scoping and pricing a consulting project, and winning the client!
In every one of these steps, your goal is to shape the project for best value, and make sure the execution is aligned with the strategy to give the project max chance of success.
Helping you with strategy, action planning and implementation to accelerate business growth is exactly what we do through my Leveraged Business Accelerator program. And you can book a free discovery call with me to get some clarity and identify where you’re getting stuck and what you need to move forward.
