Change order: A change order is issued when something changes during the project that falls outside the SOW. This generally happens when a new requirement is added to the project, such as a new system feature, or the project is expanded to include an additional assignment outside the original scope (e.g., instead of recruiting one sales executive for the client company, why dont we recruit two while were at it?).

Change orders have enormous importance in the professional services industry given the prevalence of scope creep. When clients are managed properly, scope creep is readily apparent and easily accounted for through the use of change orders; when projects arent documented properly from start to finish, getting clients to pay additional fees for additional services can be a nightmare.

Keys to Success

Professional services firm executives are ambivalent about the exact role the proposal plays in the new client acquisition process. In a best-case scenario, proposals arent delivered until the very end of the sales process and arent very important at all, says Alan Osetek of Carat Interactive. However, anyone whos been around awhile knows that best-case scenarios are the exception, not the rule, and that many cautious, risk-averse buyers use the proposal as an important tool for selecting service vendors. And its role differs depending on the service being provided, the prospects industry, and a thousand other possible criteria. Nevertheless, there are four keys to successful proposal development, regardless of the service specialty or industry being served.

Hunt Wisely

Determine where your firm has a meaningful competitive advantage-making sure you can serve that market segment successfully and profitably-and focus new business acquisition efforts squarely on that sector. Establish and maintain a high profile in that sector so prospective buyers can find you. If you have an elephant gun, go elephant hunting and stay away from the small game, no matter how attractive it may seem. This approach will provide a solid foundation for the proposal development process and improve conversion rates. My firm is three years old and growing. In the early days we took on a few clients that were out of our focus area because we felt we needed to be aggressive. In every case the situation failed and put excessive pressure on the firm that comprised our health and distracted us from much more important business development initiatives, says Antony Abiatti of SCS Financial Group.

Allocate Resources Intelligently

New client acquisition opportunities never materialize as often as wed like, so its important to make the most of them. Put your best resources on the job and be diligent in follow-up and nurturing a new relationship. Get a system in place and follow it; be process oriented. The first meeting with a prospect is critical. The firm must do whatever it takes to make a positive first impression-that means bringing in senior resources if the prospect has been qualified-and walk prospects down a proven path to convert them to clients. Too many services firms flounder not because their service offering is weak or market demand is soft, but because they presumptuously assume that prospects should be able to easily recognize their value, and if they cannot, tough. That approach may work for a lifestyle firm whose staff is content earning a comfortable living serving a handful of clients, but growth-oriented firms need to get serious about business development to prosper.

Give Prospects a Reason to Buy

Sales prospects are generally risk averse and constantly on the lookout for opportunities to maximize rate on return (ROI) with minimal investment, but buyers are also human beings, and they can recognize a well-managed and competent organization when they see one. And theyre often willing to pay a premium for its services.

So think about how a new prospect interacts with your firm-from initial contact to signing up for services-and consider whether youd do business with your firm if you were he or she. Would you be able to readily identify your organizations value proposition or how you are different from the competition? Does every interaction reinforce the firms key attributes, or do prospects leave a meeting confused or unconvinced? Dont rely on the personality of the firms point person to get the job done. Establish a formidable marketing strategy and nurture it. Youll realize dividends in client acquisition.

Take the Long View

The barriers to entry in the services industry are practically negligible-in some cases only a computer is required-which is why there are so many of us competing for business. Young firms hungry for business will always be around, providing seemingly comparable services for dramatically reduced fees. While thats a strategy for breaking into a sector, its not a sustainable one. And we know that four of every five new businesses launched are out of business within 36 months.

While it can be difficult, taking the long view is what successful firms do, and they are disciplined enough to walk away from situations with undesirable

characteristics. This philosophy includes losing gracefully. Top firms that employ a refined new business acquisition strategy win about two of every three proposals they submit, which means they lose 33 percent of the time. The good news is that they demonstrated competency along the way, and even though the prospect didnt choose them, theyve developed a relationship that can be nurtured over the long haul. And its amazing the number of lost clients who pop up somewhere down the road-either in the middle of a failing project or in a similar position at another company.

Summary

Best-in-class professional services firms view proposal development as a piece of an integrated new client acquisition process. The most effective business development efforts involve structured, in-person meetings with prospective buyers to present qualifications and accurately assess needs. The outcome is a highly specific proposal that exactly meets the needs of the prospect organization and ultimately gives the firm the best opportunity to acquire new business. Professional services firms that struggle with the proposal development process likely havent allocated the necessary resources to developing a new client acquisition strategy and an accompanying marketing strategy that supports the effort.

RESOURCES

Alan Weiss, How to Write a Proposal Thats Accepted Every Time (Fitzwilliam, NH:

Kennedy Information LLC, 1999). Harry Beckwith, Selling the Invisible (New York: Warner Books, 1997).

NOTES

1. Harry Beckwith, Selling the Invisible (New York: Warner Books, 1997).

2. Jim Jonassen, Partner, Riviera Partners, phone interview with the author (February 20, 2004).

3. Antony Abiatti, Director, SCS Financial, phone interview with the author (February 18, 2004).

4. Alan Osetek, Sr. VP, Carat Interactive, interview with the author (February 19, 2004).

5. Sarah Casalan, VP of IT, Ecko Unlimited, e-mail correspondence with the author (February 17, 2004).

6. Marc DeCourcey, Consultant, phone interview with the author (February 18, 2004).