MARCH 4, 2003

By Christopher Kenton

An Indecently Hasty Proposal

Offering too much for too little to win a contract is a classic blunder. Fortunately, when I made that mistake, I also found a mentor

My first engagement with a client didn't go as well as I expected. This was a surprise, since everything seemed to be in my favor. The client had a long-standing and successful relationship with our design group, and now they needed an overhaul of their Web site. I had a wealth of recent and relevant experience to bring to the project, and I was full of enthusiasm and energy. It was a perfect fit. What could go wrong?

The client was a well-established software company. A year or so back, my partners had redesigned the company's corporate identity and, in the ensuing years, had become its primary design shop. We designed the corporate collateral, product packaging, signage, sales and marketing tools -- pretty much anything that carried the company brand. When it came time to rebuild the Web site they were shopping the project around to programming firms. I had just come on board to launch our technical services when the client agreed to let us throw our hat in the ring.

AN IMPERFECT WORLD. I spent hours agonizing over the proposal and the pricing, feeling my way in the dark towards what I thought was an attractive offer. It was good enough to get us into a pricing shootout with a rival outfit, and I offered to match any bid as long as I could review the competing proposal. When the VP showed me the rival proposal, I saw that it was loaded with hidden costs and nickle-and-dime traps -- a tactic, I explained, frequently used to artificially lower the initial price in order to close a deal. I walked through the proposal with him, showed how our proposal put all of the costs on the table, and closed my first deal. I felt like the righteous victor, winning through forthright honesty and saving the client from gouging. It didn't take me long to realize my victory wasn't so black-and-white.

The bidding-and-proposal process is a fascinating microcosm of business. Client and the vendor should be experienced and well prepared -- each having researched the project in order to understand how it should be planned, scoped, and developed. In an ideal world, everyone knows what to expect.

As I soon discovered, vendors write proposals designed for a real-world environment, one in which clients often don't fully understand the project, don't have time to scrutinize the proposal, and base most of their impressions on the bottom-line bid. Some vendors write such proposals to take advantage of their clients. I have one client whose previous vendor built a standard corporate Web site and stipulated in the contract's fine print that the vendor owned the code. When it came time to move on the vendor billed the client $75,000 for the code. Most vendors, however, are legitimately protecting their interests, which is what I learned the hard way.

I won my first project based on a fixed-price bid. Not terribly unusual, except that the scope had only been defined in broad strokes. Once the proposal was signed, I was essentially agreeing to take on any hidden features that might accrue as we filled in the blanks on the scope of the project. Good for the client, bad for my business. Those "hidden costs" I'd revealed in the rival proposal reflected areas that hadn't been thought out, and therefore couldn't be priced. It played well into my naive hands when I was exposing the "trap" to my client -- but ended up eating my profits as the project moved into production.

VETERAN'S WISDOM. In the meantime, we kicked off the project and I went to school on client relationships. The redesign of the corporate Web site was one step in the customer's larger repositioning strategy. the goal was to change its image, along with its revenue streams, and there was a lot of discussion about the most effective way to do this. As the consultant, I had a lot of ideas, and an opinion, about the best course of action, which I shared with the client, encompassing everything from the messaging to the design and flow of the site. My thoughts were well considered and strategic and -- though I didn't notice it at the time -- helped the vice-president of marketing develop a striking dislike for me.

At the time, I simply thought the he was resisting change. He didn't agree with my ideas and advocated a position that seemed antiquated and dull. I couldn't understand it -- it was so obviously wrong. I formulated a number of explanations in my head to explain the situation, until it finally occurred to me to ask, "Well, what if he's right?"

It turned out he was. What he knew, and what I had yet to develop the skill to discern, was the nature of his audience. In repositioning his company, he was taking on an enormous risk in changing target markets. While he wanted to attract a new kind of customer, he couldn't afford to alienate the existing ones. What I saw as antiquated, his customers saw as stable. What I saw as dull, they saw as trustworthy.

Although it didn't help my relationship with the VP, I learned two of the most important lessons of my career. 1) Your client is frequently smarter than you, especially about their own business, and you should listen to them carefully. 2) Don't confuse your own preferences with the preferences of the audience. Even if you're an expert, you're really just a focus group of one person.

NEGLECTED HOMEWORK. As the project moved into production I fully grasped the mistake we'd made on our proposal. It would have been fine to have offered a fixed bid, as long as we had gone the extra step of finely detailing the scope of what would be included at that price. As it was, we underestimated the scope of the project and wound up struggling just to break even. Fortunately those were the biggest mistakes we made on an otherwise successful project, and we managed to extend our relationship with the client to include both design and development, a relationship that continued for a few years until the recession.

It took a little longer for me to patch things up with the marketing vice-president. He went on to work for a startup and asked us to work with him on building out his marketing program. This time, I was far more interested in learning how he would approach a new market -- and I wasn't disappointed. He had tools and ideas that were completely new to me and I realized I was working with one of the most experienced practical marketers in the technology industry.

I'm not sure if things would have been different if I had discovered that sooner, but I'm glad to count him now among my mentors--and even happier to know the secret that mentors usually don't appear where and when you expect. Sometimes they're the ones hiring you as the expert.