The software and software services business is changing, and with that the software proposal becomes ever more important. After many years of fairly static business models, traditional business software vendors are finding themselves challenged by a host of new business models: Software-as-a-Service (SaaS), open source, outsourcing are all trends impacting the business of software. This can shorten the decision timeline for the customer, and hence the sales cycle. Rather than the traditional steps of requirements gathering, POC, pilot and then finally full deployment …. customers are able to make a quick decision and deploy after a free online trial of a hosted software service, without the hefty financial commitment of a perpetual software license. If you're selling your software or service the "old fashioned" way, with plenty of time to gather and refine requirements, you may find your client making a buying decision with your competitor before you even have put the software proposal in front of them !
In today's changing software service marketplace, it is critical to focus on five key elements for a winning software proposal:
Sales cycles are much shorter in the online services marketplace than for traditional software. It used to take 6-12 months or longer to sell software into an enterprise environment. Now business customers can make a software service buying decision in less than three months (often much less). You need to be able to very quickly identify enough requirements and client customization needed to put that proposal together as quickly as possible. One of the benefits of a service or subscription offering is that it can be more easily refined over time as needed.
2. Price your Product or Service Correctly
If you're trying to sell the customer on a million-dollar perpetual server software license, and what they're looking for is a hosted web service with a low monthly subscription fee on a per-user basis … you're going to lose the deal, no matter how well your proposal is written. Make sure you're on the same page as your customer on the type of service they need to meet their requirements, and price / position your product accordingly. You may want to provide a menu of separately-priced offerings, perhaps on a subscription basis, rather than the all-in-one traditional enterprise software license.
3. Speak to Your Customer's Pain Point
Your software proposal should answer a question or address a concern that is top of your customer's mind. Otherwise it will just gather dust on their "things I should read when I have time" pile (we all have them, don't we?). Pick a pain point (if possible, put it in your customer's own words) and specifically address how your software or service will solve their problem. Tie it into your value proposition below. Come back to the pain point when you close with tangible ROI and metrics / benefits at the end.
4. Include a Strong Value Proposition for All Stakeholders
What is the biggest benefit of your software or service to this customer? What is your main advantage against your competition? That is your value proposition. Keep it simple, and make sure it is prominent in the executive summary of your proposal (your proposal does include an executive summary, right?). If you can quantify it (eg, with some ROI messaging) then do so. The more hard benefits you can articulate in the beginning of the proposal, the more likely your customer will keep reading.
Your value proposition must clearly differentiate your software or service from your competition, whether they are a licensed software vendor, a SaaS provider, open source software, or consultancy. Each requires a different type of value proposition.
Finally, make sure you have a value proposition clearly articulated in that executive summary that speaks to each stakeholder in the purchase decision. Make a list of the owners within the client company, and put yourself in each one of their shoes in turn. Read the proposal with them in mind. Have you included a benefit statement that speaks directly to them?
5. Reinforce your Value Proposition with ROI and Client Examples
So you've included a strong value proposition and benefits to each of your officials in the executive summary of the proposal. Good! That means they will keep reading.
But that is not enough for them to take the next step and buy. Your proposal must clearly identify how each benefit is going to be achieved by your software or service, and how you will quantify or measure the results (metrics!).
Hopefully you can communicate a strong and convincing ROI, taking into account both hard ($) and soft benefits. A strong ROI methodology is critical to your software proposal's success. Unless, of course, you have such a stunning value proposition that customers are willing to pay for it regardless. And you should include customer examples or case studies that reinforce your value proposition and ROI message also. Even better if you can include some client references that your customer can speak to directly if they wish to.
If you keep these five points in mind, you will be able to write a winning software proposal for your product. Without explicitly focusing on these five areas it is easy to waste your time putting together proposals that don't get read. Always stand in your customer's shoes, and lead them through the proposal thought process from beginning (their needs / pain, and value proposition) to end (tangible ROI and results).