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Last updated on 2024年7月12日

What are the key elements of a value-based contract proposal?

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Negotiating contract value with customers is a crucial skill for any business that offers products or services.

It can help you increase your revenue, build trust, and create long-term relationships. But how do you convince your customers that your offer is worth their investment? Keep reading for tips on how to prepare and present a value-based contract proposal that highlights the benefits and outcomes of your solution.

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Saleh Al Ghunaim, CCMP

Supply Chain Management I Procurement I Contracts Management

1 Understand your customer's needs

Before you start drafting your contract proposal, you need to understand your customer's needs, goals, and challenges. This will help you tailor your offer to their specific situation and show them how you can solve their problems or improve their results. You can gather this information by conducting research, asking questions, and listening to their feedback. Try to identify their pain points, priorities, and expectations, as well as their budget, timeline, and decision-making process.

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Andy Jacobs

Problem Solver, solutions driven, and community advocate
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Understand what value means to your customer. KIP’s or values are different for each customer. Listening is key customers sometime have hidden values .

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Shalimar Verini-Barker - Broker/Realtor?SFR, BPOR, CTC

Greater Los Angeles Realtor? and Multi-million dollar producer gratefully serving my clients and the Real Estate industry since 2003!
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You must know your clients 'Story'. What are their immediate/short term/future needs and goals? Not YOURS...THEIRS! Without this information, you can not provide them the best service. I always try and get a full picture of my client's situation as to present them in the best light possible. I do not believe in putting anyone in a situation that may not be in their best interest. My job is to educate my clients along the way to help them not only understand what they are doing but WHY they are doing it. The devil is in the details...

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Moseman, Zeb

Training Strategist @ NRC Health | Challenger Certified Trainer
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Some things I think are helpful to think about when structuring a value based contract proposal is to include the following in this order 1. Brief company overview, philosophy and value proposition 2. Breakdown of key product capabilities being proposed 3. A page focused on product ROI tailored to the buyer persona(s) as well as the identified business concerns the proposal will solve for. This page can include customer testimonials, case studies, organization insights, customer facing info graphs focused on ROI and value etc. 4. Save the investment/pricing page for the end, but be sure that line items within the pricing are descriptive and can be tied back to the benefits of the proposed product.

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2 Define your value proposition

Once you have a clear picture of your customer's needs, you can define your value proposition. This is the statement that summarizes how your product or service can deliver value to your customer. It should answer the question: why should they choose you over your competitors? Your value proposition should focus on the benefits and outcomes of your solution, not just the features and functions. It should also be specific, measurable, and relevant to your customer's situation.

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Shalimar Verini-Barker - Broker/Realtor?SFR, BPOR, CTC

Greater Los Angeles Realtor? and Multi-million dollar producer gratefully serving my clients and the Real Estate industry since 2003!
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In my experience, it's always a good idea to have a conversation with my client's about their prior real estate experiences. What went well, what didn't? Where did they feel disappointed within their experience? Did their agent have their back or was the agent more focused on commissions? Did negotiations go as expected and did they feel they were being included in decisions? Did they feel their agent had the knowledge needed for their goals to be met? As a 20+ yr vet in the RE industry, and having obtained a Brokers License, I feel it's important to point out the benefits of my experience and education while discussing the importance of great communication and negotiation skills, with all involved in the transaction.

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3 Structure your contract proposal

A value-based contract proposal is a document that outlines the scope, terms, and conditions of your offer. It should be crafted with clarity, conciseness, and persuasiveness in mind. Generally, a contract proposal includes an executive summary, a problem statement, a solution overview, a value analysis, pricing and payment information, and terms and conditions. The executive summary should provide a succinct overview of your offer, your value proposition, and your main points of differentiation. The problem statement should explain the customer's needs, goals, and challenges, and how they affect their performance or situation. The solution overview should detail your product or service and how it can address the customer's problems or improve their results. The value analysis should quantify the value and benefits of your solution, such as cost savings, revenue growth, efficiency gains, or customer satisfaction. The pricing and payment section should break down the costs and fees of your offer, and the payment terms and options. Lastly, the terms and conditions should summarize the legal and contractual aspects of your offer, such as warranties, liabilities, and termination clauses.

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Alanna Gonzalez

Manager @ Collins Aerospace | LL.M. International Business
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I agree, but the contract proposal phase should be more succinct and specific in my experience; therefore, unless the warranties and liabilities clauses deviate a lot from a standard going-in contract, it's best to keep these clauses out.

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4 Use persuasive language and design

Crafting a contract proposal that is both persuasive and professional is essential for making a positive impression on your customer. To ensure your proposal is effective, consider the following tips: Utilize language that is straightforward and free of jargon, acronyms, and technical terms; organize and emphasize your information with headings, subheadings, bullet points, and tables; use charts, graphs, and images to back up your value analysis; include testimonials, case studies, or references to demonstrate your previous successes and customer satisfaction; and, finally, include a call to action that encourages your customer to take the next step, such as signing the contract, scheduling a meeting, or requesting a demo.

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5 Follow up and negotiate

After you send your contract proposal, you need to follow up and negotiate with your customer. This is the stage where you can address any questions, concerns, or objections they may have, and try to reach a mutually beneficial agreement. You should be prepared to justify and defend your value proposition, and to offer some flexibility or incentives if needed. You should also be respectful, courteous, and assertive, and avoid making assumptions or concessions without getting something in return. The goal is to create a win-win situation that satisfies both parties and leads to a successful contract.

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Alanna Gonzalez

Manager @ Collins Aerospace | LL.M. International Business
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I agree. At this point of the process is when the standard clauses that each seller company has as standard will present them to the customer (e.g. Termination, warranties, IP, indemnification, etc.).

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Saleh Al Ghunaim, CCMP

Supply Chain Management I Procurement I Contracts Management
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A value-based contract proposal outlines: 1. Objectives 2. Performance measures 3. Pricing structure 4. Risk-sharing mechanisms 5. Governance 6. Flexibility 7. Collaboration 8. Termination conditions The proposal should be tailored to the specific needs and context of the parties involved, ensuring it reflects the value-based approach and promotes a mutually beneficial relationship.

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What are the key elements of a value-based contract proposal?

1

2

3

4

5

6

1 Understand your customer's needs

2 Define your value proposition

3 Structure your contract proposal

4 Use persuasive language and design

5 Follow up and negotiate

6 Here’s what else to consider

Contract Negotiation

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What are the key elements of a value-based contract proposal?

1

2

3

4

5

6

1 Understand your customer's needs

2 Define your value proposition

3 Structure your contract proposal

4 Use persuasive language and design

5 Follow up and negotiate

6 Here’s what else to consider

Contract Negotiation

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