How to Gain an Edge in the B2B Space
When it comes to doing business between companies, typically referred to as business-to-business, or B2B, most opportunities and contracts are generated through a process of bid solicitation. Companies looking to contract services or support will often issue what is known as a Request for Proposal (RFP) to seek information from various companies and suppliers who they believe can do the job. In order to be successful at responding to such opportunities, you will want to respond to a RFPs with an effective, well structured, and winning proposal.
There are three main types of contract documents that you will encounter as a business development or product manager:
Request for Information (RFI)– An RFI is typically issued ahead of the time when an organization is exploring supplier options, and plan to establish a contract at a later date. An RFI will often be used to gather information about what can be offered by various firms, notional timing and costs for delivery of the project, as well as to establish an understanding of what prospective suppliers can offer. RFI responses and feedback are often used to help a prospective client revise their requirements or make changes to the scope of work before issuing a more detailed RFP.
Statement of Work (SOW) – A Statement of Work is a document issued by the client that outlines the scope of activities, required deliverables and desired timing to prospective suppliers. In general, a SOW differs from an RFI and RFP in that it will typically outline very specific requirements that must be satisfied by the supplier.
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Request for Proposal (RFP) – An RFP is formal document that is issued to prospective suppliers and partners, seeking a formal proposal and pricing for a given project. An RFP may be issued in conjunction with a SOW, or may be a stand alone document to which suppliers respond.
RFIs, SOWs and RFPs are the most common types of subcontracting documents used in B2B contracting. And while each has its intended purpose, you might encounter any combination of them depending on your industry. However, the overall intent of each of them is to understand capabilities of vendors and suppliers, such that the client can gain a comparison of each firm and make a selection. Thus, you will want to put your best foot forward and put together a winning proposal when responding to an RFP.
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Developing an RFP and RFQ Response
This MRH ProGuide contains everything you need to know to help you develop solid responses to your customers’ RFPs and RFQs. This ProGuide is packed with tips on everything from formatting your document, to setting a capture strategy, to evaluating your competition. It also includes a sample outline for your RFP Response as well as a printable checklist to help you review your RFP Response before submitting it to your client.
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Responding to an RFP
Now that we’ve highlighted some of the basic types of documents that you’ll encounter in B2B contracting, let’s turn our attention to generating a winning RFP (or a SOW, or an RFI) response. First, be sure to craft your proposal carefully such that it goes above and beyond the basic expectations of the response. You will want your proposal to showcase your company’s capabilities because in many instances, your response may be the only thing that the contracting organization will use to award a contract.
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It should go without saying that a well-developed proposal should be organized in a coherent manner and free from typos and other writing errors. Written proposals should carry a formal and professional tone to signify the level of care and thoroughness taken by your firm as a whole. In the eyes of the supply chain or purchasing agent, the quality of the RFP response is indicative of the quality of work they can expect from your firm if given the contract. Moreover, such things as formatting, labeling of tables and images, and overall accuracy of information are highly important as they are direct indications of your firm’s product quality and attention to detail. To say it differently, even the best information packaged into a poorly drafted document will simply weaken your firm’s position when it comes to winning business opportunities.
A Sample Framework for Your RFP Response
In some cases, the SOW or RFP issued from the client will dictate a specific format or means by which the response should be submitted. However, this is not usually the case, leaving it up to you. In the absence of a pre-defined RFP response format, we recommend using the following outline to help get you started.
The front matter of a proposal should include a Table of Contents, a list of figures and tables, a list of relevant and related documents, and a definition of the proposal’s scope. Defining the scope of your response is critical, as it clearly states the bounds of your proposal. Further, when writing an RFP response, include an overview of your company or organization, as well as examples of your firm’s pedigree and experience with similar projects. Doing so assures new clients that your firm has the ideal skills, experience and resources to do the work, and are able to provide the value they seek.
Following the introductory paragraphs, switch to providing a detailed outline of the approach your firm plans to take in delivering against the contract. Outlining a detailed approach in an RFP response allows the prospective client to better understand how the firm plans to execute the project. Doing so also ensures the client that you fully understand the requirements and objectives, and gives the client a chance to clarify anything that may have not be fully understand by your firm.
The Approach section allows your firm to showcase its expertise and skill. Depending on the size and scale of a project, you should consider including a proposed organizational chart as well as brief biographies (academic credentials, years of experience, types of projects worked in the past) of the employees who will be assigned to the project. Including such information is particularly useful when working with foreign clients who may be less familiar with your firm, and often gives the client confidence in the firm’s ability to deliver a quality product.
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Deliverables and Schedule:
Following the plan of action, the next part of your written RFP response should provide a clear statement of the deliverables and outputs to be provided to the client. This will again serve as a mechanism by which the client and your firm can agree on the details of scope and expectations during ensuing discussions.
Depending on your industry, deliverables may include written documents, client-facing meetings and other milestones as appropriate for the opportunity. As part of your RFP proposal, you may want to offer more than the client is asking for as a gesture of your willingness to partner with them. For instance, you may want to offer free hardware for testing purposes, training to the client’s staff, or some other gesture of goodwill as it relates to the client’s needs and the project.
RELATED: Our Sample Outline for Writing A Proposal
Perhaps the most important of any RFP response and written business proposal are the assumptions made, or exceptions you are taking to the RFP requirements. Towards the end of the document, include a list of assumptions that highlight any open questions and concerns you may have. The reason such a list is so important is because when prospective clients are unable to provide complete set of project details, assumptions help protect your firm from unknown conditions. For instance, if a client were unable to provide a clear timescale in which the work needed to be completed, you should provide an assumed completion date based on the resource plan you’ve stated earlier in the proposal. You should also offer, however, that alternate completion dates are possible, as mutually agreed to by both parties to make sure you client sees you are flexible on your offering.
Depending on the specific RFP, include a section for general recommendations in your RFP response to your client. Again, when it comes to establishing a strong relationship with a potential client, willingness to provide recommendations and initial feedback indicates your firm has their interests in mind and is able to provide real, tangible value to them. Further, the ability to provide some initial recommendations assures clients that your firm can help further define the client’s needs when they are is unsure.
On this point, some business development managers are unwilling or do not prefer to offer recommendations without a contract in place, as such ideas could be taken and passed onto your competitor. While this is certainly true, in more modern B2B environments companies are looking more for strategic and long-term partners. Offering some form of basic advice and feedback, therefore, can help differentiate your RFP response and offering beyond just the price.
In many cases, pricing information is provided as a separate document, typically a cover letter, and serves as an attachment to the formal RFP response. However, you may wish to embed such information in the written proposal itself. The pricing information should provide the fees, both recurring and non-recurring as necessary, as well as payment terms and currency. Depending on the work or the industry, it may also include things like escalation clauses and other assumptions related to pricing a given opportunity.
To summarize for you, winning RFP responses should be professionally written and showcase your firm’s abilities. Further, your written proposals should also indicate a level of flexibility and willingness to adapt to a given client’s needs and express an interest in partnering with them in the future. An effective RFP response will clearly outline your approach, your assumptions and a summary of recommendations for further discussion. Finally, RFP responses should be customized to each of your clients, and be written with the goal of getting to a negotiation table in mind.
So go out there and win some business!
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While most people put a lot of effort into crafting their business proposal, often only a few minutes are spent on the cover letter, which is often relegated as a pesky formality. Unfortunately, people who dismiss the importance a business proposal cover letter are essentially missing out on a great opportunity to create an immediate connection with the potential client they are communicating with.
The cover letter is the hook of your business proposal
Since a business proposal (whether it is solicited or unsolicited) is essentially meant to sell a service/product, or at least lead up to a sale, your cover letter should be crafted for the express purpose of getting the buyer excited about the solution you are offering them (your product and/or service).
This is what your cover letter should accomplish:
1. At the very minimum, you want it to create enough curiosity to make the reader want to read your executive summary and your full business proposal. This way, your business gets enough facetime to convey and convince your prospective client why you have the best solution for their job/issue and that they should do business with your company.
It should be noted that creating your cover letter (and your business proposal) as a text document is quickly becoming out of date. If you really want to impress a prospective client and make your company stand out, create a digital multi-media business proposal using Paperless Proposal Software and have your cover letter be a personalized video from a top executive at your company, preferably your CEO or President.
2. You simply cannot discount the fact that many times it’s only your cover letter that gets read before the proposal is tossed aside. So, apart from the hook, your cover letter should also offer a summary of the information stated in your main business proposal.
However, remember that you have to be frugal with your words when drafting your cover letter. It should be short, to the point, and highly persuasive. You don’t want to bore the reader.
To ensure that you impress your reader instead of bore them, we recommend that you create a digital multi-media business proposal and use a short 1-2 minute personalized video instead of a cover letter. With Paperless Proposal Software, adding a personalized video to your digital business proposal is fast and easy.
The Business Cover Letter Mindset
Before you start writing the cover letter for your business proposal (or creating a cover letter introduction video), put yourself in the right mindset. Ask yourself what would you say to the reader/recipient of your business proposal if you only had 1-2 minutes of time to talk to him or her and win their business?
In this brief amount of time you have to get across the most important points about their requirements, the solution you can offer, and the end-result benefits your solution will provide to them. Write these down and you are ready to begin drafting your cover letter.
The nuts and bolts of a business proposal cover letter
- Your cover letter should be written on business stationery in electronic format, or better yet, create a video. Note that printed, paper-based cover letters and business proposals are a thing of the past, so don’t use them. Instead, use a high-quality digital format business proposal such as the format used by Paperless Proposal Software.
- If you are writing your cover letter instead of creating a video, the header should include the name of your company, your address, and your contact information.
- Start by writing the name of the recipient (possibly with their designation), followed by the name and contact information of the recipient’s company.
- Add the date.
- Address the recipient as Dear Mr/Ms. if your communication with that person in the past was on formal terms and if your business proposal is unsolicited. On the other hand, if you know this person well, you can use their first name.
- Close the letter with “Regards” or “Sincerely” depending on your association with the reader.
So, at this point, your cover letter should look something like this:
Your Company Name
1234, Bentree Complex, Addison Pkwy
Addison, TX 97692
(123) 555-1234 | yourcompany.com | email@example.com
Mr. Peter Coleman, CEO
Dallas, Texas 75248
March 1, 2018
Dear Mr. Coleman,
With the formatting out of the way (which was our step 1), you can now start working on the body of your cover letter. This is the information that you need to include in it (note that if you create a personalized video instead of a cover letter, these are still the items you should discuss):
Step 2: The Requirement/Problem
Why have they sought your help/service, or what is the problem that they have which you can help them solve? If the buyer has asked you to send them a business proposal, you can start the first paragraph by simply stating this. So, start with, “As per our discussion on so and so date…” or, “As we discussed in our last meeting…” and then go on to state the issue/requirement in a single sentence.
If you share a good rapport with the recipient, you could also start with something like this, “We at Our Company are thrilled to have the chance to submit a proposal that will help your company solve XYZ problem.”
If you are sending an unsolicited business proposal, forego the formalities and use a hook right away. You need a truly explosive statement that will make your reader sit up and take notice. Nothing works better than a question or the monetary implications of a problem they have to evoke strong emotions. For example:
- How would you like to lower the energy expenses of your manufacturing unit by 60% in 90 days?
- An average company loses $1,000 every day on power wastage! Our solution eliminates that power waste.
- How would you like to increase your sales by 40% in the next 6-months while lowering your marketing expenses?
- Your costs your business 3 times more to acquire a new client than to keeping an existing customer. Our solution helps you increase your client retention by over 80%.
This should be the first paragraph of your cover letter. You can also introduce your product/service here in one sentence and quickly add a few words about how you have helped other companies in their industry achieve outstanding results. Here is an example of what we are going for:
Solicited proposal first paragraph: As per our discussion on February 12, we know that you are interested in moving to a more energy efficient manufacturing environment. Our company has over 15 years of experience in installing energy efficient manufacturing systems across a range of industrial sectors, and we have helped many of our clients reduce their energy costs by as much as 35%.
We at Our Company are pleased to have the chance to submit a proposal to help your company lower its marketing costs while greatly increasing your marketing ROI by at least 30%.
In the accompanying proposal, we have outlined how we can help you progress from simply trying to acquire new clients to a powerful new dual approach that would help you increase the retention of your existing customers by over 80% and keep them loyal, while at the same time helping you to target and acquire new clients at a cost that is 30% less than your current new client acquisition costs.
Unsolicited proposal: How would you like to reduce yourmanufacturing energy costs by up to 35% within 60 days? For the last 15 years our company has been helping manufacturing companies in your industry significantly lower their use of electricity, saving them millions of dollars.
Step 3: Solution
Tell the reader what you can bring to the table here. Talk about the analysis that you conduct to gauge the problem and the solutions that you provide. The best formatting is to use a bullet list after a sentence or two of explanation on the analysis of their problem. This list should explain the goals that you intend to achieve through your product/service. This is what step 3 looks like:
We will analyze/have analyzed (as may be applicable) the complete marketing and sales process of your company and we have found that through the use of our service, your company will:
- Increase brand awareness
- Increase marketing ROI by over 40%
- Streamline your pre-sales and post-sales process
- Target new client segments, including the untapped local client base, and lower your new client acquisition costs by over 20%
Step 4: The Benefits
Answer the all important question of why the recipient should be spending his/her precious time reading your proposal. Remember, this is not about highlighting the features of your product/service. In this section, you very clearly state what the recipient business will receive if they purchase your solution. Use something like:
By using this novel approach to marketing and sales, we can help your company increase revenue by over 40% while at the same time creating an optimal environment for the direct marketing of your future products.
So far, you should have no more than 2-3 paragraphs and a bullet list.
Your Qualifications (optional)
In the fourth paragraph, briefly state why and how your company is the most qualified to handle the issue that the receiver’s company has. For example, you could tell the reader that together your team has over 50 years of cumulative marketing experience, or that you have world-renowned industry experts on your team who have worked with leading marketing companies or Fortune 500 companies. However, don’t make lofty claims here. State the facts of what you can do, and don’t lie.
Step 5: A Call to Action
Finally, end your proposal cover letter (or video) by telling the reader what you want him/her to do next. This may be verbal encouragement to continue reading your full proposal or to get in touch with you to answer any questions they have or to request additional information. You could say something like this:
- After you have reviewed the enclosed proposal, contact us at (123) 555-1234 so we may answer any questions that you have.
- Our business proposal has in-depth information on what we have done to help several of our other clients in your industry, and the results we have achieved for them.
- I will call you on Monday to discuss any questions you may have and the possibility of us working together. We are confident that we develop a personalized plan that perfectly suits the requirements of your company.
A few more thoughts about how to write a winning business proposal cover letter
1. Typically, you should not mention the cost of the service/product in your cover letter. There are two exceptions to this rule:
- If your lower cost gives you a distinct advantage over the competition.
- If your favorable pricing can sway the buying decision in your favor.
However, remember if you are using cost in your marketing strategy, it has to either be the lowest cost or offer the absolute best value (highest ROI). The last thing you want to do is tell the reader that you are the company with the most expensive solution/product as that may immediately get your company eliminated from the selection process.
2. Edit, and then edit again. There is simply no shortcut to this step. Read and reread your cover letter. Spelling, punctuation and grammatical errors in your cover letter will project a bad image of unprofessionalism, which you don’t want, and is the kiss of death.
3. Keep your cover letter to one page.
4. Your cover letter should not be about your company. It should be about the client’s company and how you can solve a major problem they have or fulfill a major need they have. So, write from the perspective of the biggest benefit you will provide to them.
5. Do not make any claims that you cannot back up with proof in your business proposal.
The End Result
This is what your business proposal cover letter will look like after going following the above 5 step approach
Your Company Name
1234, Bentree Complex, Addison Pkwy
Addison, TX, 97692
(123) 555-1234 | yourcompany.com | firstname.lastname@example.org
Mr. Peter Coleman, CEO
Dallas, Texas 75248
March 1, 2018
Dear Mr. Coleman,
We at XYZ Company are thrilled to have the opportunity to submit a proposal to help your company significantly lower its marketing costs. In the accompanying business proposal, we have outlined how we can help your company transform from simply trying to acquire new clients to a powerful new dual approach that will help you increase the retention of your existing customers by over 80% while at the same time targeting and acquiring new clients at a client acquisition cost that is 30% lower than you are spending now.
After a thorough analysis of your end-to-end marketing and sales process, we found that by incorporating our proprietary Dual Approach marketing System, we can help your company:
- Increase brand awareness
- Enhance and leverage word of mouth marketing
- Increase your marketing ROI by at least 40%
- Streamline your pre-sales and post-sales process
- Target new client segments, including an untapped local client base, and lower your new client acquisition costs by over 30%
By using this novel marketing and sales system, your company can increase revenues by almost 40% and create an optimal environment for the marketing of your future products.
The enclosed proposal includes in-depth information detailing how we have helped other companies in your space achieve their branding and marketing goals. You will also find examples of work we have done within your sector.
Call us at (123) 555-1234 if you have any questions or require further information. We are confident that we can create a personalized plan that suits the requirements of your company.
How to support your cover letter with an amazing business proposal
Now that you have a great cover letter or introduction video, you need to back it up with an impressive digital multi-media business proposal that helps you beat your competitors and win the client. With Paperless Proposal Software, you can easily add the following elements to your business proposal to help you win more clients:
1. Use a personalized video introduction instead of using a written cover letter. A personalized video introduction is much more impressive and effective at winning a client than using a written cover letter. When you use a personalized video introduction at the beginning of your business proposal instead of using a written cover letter, you will see that you will win far more clients.
2. Use client testimonial videos and client case study videos instead of using written testimonials and case studies. Again, video is a much more powerful and effective medium for grabbing the attention of your perspective clients and persuading them to hire you.
3. Paperless Proposal Software provides you with advanced business proposal analytics and tracking tools so you always know when and how many times your client opens your proposal, what pages they read, what videos they watch, how long they spend reading each page or watching each video, and who and how many times they share your business proposal with other people in their organization. Compare that to just sending your pdf proposal via email and not knowing if your client received it or even read it.
4. Paperless Proposal Software provides you with real-time notifications and alerts for immediate follow-up with your prospects so you know exactly when to contact them instead of guessing and not knowing when you should contact them.
5. Paperless Proposal Software provides you with Esignature, making it fast and easy for your prospect to sign and approve your proposal instead of them having to print, sign, scan, and email or fax your accepted proposal.
Click here to schedule a FREE Demo of Paperless Proposal Software
Check out these sample business proposal cover letters from all over the Internet. Some of these follow the 5 step plan perfectly while others have skipped a step or two in keeping with their specific requirements/situation.