What You Need to Know About Proposals and Decision Making

Do you know how people make decisions?

Imagine you’re shopping for a new car. Now say you’re at the dealer and they tell you they have two cars within your budget that have the features you’re looking for.

“We have a Honda and a Swirt. Which one do you want to look at first?”

Chances are you’re looking at the Honda. The Swirt won’t get a test drive, much less bought. This is a very simple example of one of the tactics humans use to help make decisions.

I’ll be going over what you need to know about the decision making process and how you can use that your advantage in your proposals.

Pain saving shortcuts

It’s said the people spend almost 3/4 of their day making decisions. This process takes a large amount of mental resources. To deal with the easy ones we develop habits and routines. For others we use shortcuts that we learned early on in life to help us through the process; we tend to stick with these methods throughout our life.

There are three common techniques for making business decisions:

  • Recognition (the simplest)
  • Single-factor decision making
  • Estimating the Rate of Return

Recognition

The opening to this post was a demonstration of recognition. Recognition is the easiest to explain. It basically means that the more recognizable you are to the prospect, the more likely they are to choose you.

This is part of the reason why large corporations spend millions of dollars making commercials that don’t sell you anything (think about major brands like Coca-Cola and Pepsi). It’s about brand recognition.

Building your own online brand will certainly help here but let’s be realistic about things. The internet is a huge place; you’ll be lucky to make your brand recognizable to a small fraction of your target audience. So while you want to work on developing your own brand, you also want to supplement this with things people will recognize.

An effective way of doing this is by mentioning any partners or technologies that your customers will recognize in a way that helps them build that association.

Single-factor decision making

Single-factor decision making is about using one key condition the person has in mind. So for a design related project, this means a prospect may be heavily biased in a single direction. Maybe it’s the pricing they’re most concerned with. Or perhaps it’s the timeline.

This isn’t to say that if they’re worried about pricing, timeline doesn’t matter. This just means that it’s the absolute most important factor for them, everything else is secondary and negotiable.

Keep in mind that projects aren’t always driven so heavily by a single component. In that situation the person usually falls back to using a condition that worked for them in the past. So you’ll want to ask two questions to help you get inside their decision making process:

What’s the biggest concern you have with this project?
and
What do you typically look for in a firm for a project like this?

Rate of Return

The last one involves calculating the rate of return for their efforts. People quickly (many times unconsciously) calculate the rate of return when making a decision. If you can show that they will receive a higher rate of return with you versus your competition, you’re on the right path.

Don’t confuse this with telling them that you’re the cheapest. You want them to understand that even if you’re more expensive, their investment will pay itself back many times over. Try not to give a broad statement, be as specific as you can.

Putting it all together

While people are typically heavily weighed in one direction, they tend to use all three factors (to some degree) when making these types of decisions. Your best strategy will be to find out which one they favor the most, focus on that one, and make sure you cover the other two

Remember, the intent isn’t to be dishonest here. You simply want to present yourself and your services in a way that flows with how the person on the other end takes it all in.

Now that you’re armed with all this decision making knowledge, you’re ready to read up on the art of proposal writing.

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Rob

Ruben, great article… I agree, for you’ll improve your odds of winning them as a client exponentially when one takes the time to understand & address a prospect’s “mind set.”

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