How to Increase Profit by Unbundling

Have you ever thought about why you give your clients valuable products and services for free?

Maybe you’re trying to strengthen the relationship with the client. Or, maybe you’re just trying to ensure you’ll win the project or make the sale. 

To be clear, there’s nothing wrong with providing some extra value to a client, but we often give away the wrong add-ons in our proposals — offering valuable bundled products and services with a basic package when the clients might be willing to pay (much) more to get them. 

This might ensure the immediate sale, but it also takes a big hit on profitability and the perception of your brand as a whole. 

There’s a difference in value-add and valuable items in the proposal. Trust me, I know the benefits of value-add. That’s when we include something that doesn’t cost us much and means a lot to the client. But some of the products and services we just “throw in” are actually worth way too much to be a bonus item — they’re valuable to the client and you should be charging for them. 

If you want to discount the job, don’t give something valuable for free. Sell something non-valuable for less. 

It’s pretty simple — find a way to reduce the price without offering a valuable component for free. 

The best way to do this is by unbundling your value-add proposal items. 

When to Unbundle Your Add-Ons

The unbundling approach is most often needed when you’re responding to RFPs. When you get a request for proposal procurement, you know the client is buying based on price so you’ll need to come in competitively if you want a chance to win the bid.  

Many salespeople don’t believe you can charge extra for add-on items in a competitive bid situation… 

But you can. 

They might object and say, “The other quotes will come in for less so we can’t charge extra for these items.” 

“Okay. Let’s give the client three options that include different features.” 

To which they say, “They’re not asking for options.”

“I don’t care if they’re asking for options. We’re not giving them something valuable for free. We need to unbundle it.” 

“But the other quotes will include this for free.”

Yes, they will. But you’re not. Instead, you’re going to make the extra items look more valuable. In doing so, you’ll show them why it’s worthwhile to do business with you. 

How do you make your company stand out as the better choice in a RFP situation? 

Put options in the proposal. 

The 3 Essential Options for Your Proposals

Not every company will want all of the options you have to offer. But the clients who want the extra services and products need to opportunity to decide if they’re willing to pay for it. 

Let the client choose what’s really important to them by offering three options in your proposal. 

Option 1: The Basics

This is your basic proposal. Meet all the criteria of the RFP, but do not exceed it by one penny. Whittle it down to the bare minimum it takes to meet their specs. 

Maybe you disagree and think, “That’s not how we do business. We overdeliver.” Delivering the bare minimum may not be how you do business, but it’s potentially how they do business. 

Your prospect sent you an RFP — so pare down what you offer to meet their exact criteria. 

Option 2: The Bonus 

Meet the criteria they outlined in the RFP, but add something extra. Offer an additional product or service that will improve the experience in customer terms. 

Let’s say you’re doing a project — add a dedicated project manager with unlimited access to their time or unlimited meetings. Or include a site survey, a drawing, or photos. Your goal is to add a product or service that will enhance the project (but isn’t essential) for the customer experience.

What if the other company includes this for free in option one? 

That’s okay. It won’t look as valuable in their proposal because they only gave one option. When you identify this service as something different, the client will start asking questions about the real value of the add-on in the other quote. 

When they find out that 20% of their project is in your value-added, they’ll start to wonder, “How good can this be if they’re giving it to us for free?”

Option 3: The Above and Beyond

Pay enough attention to the client to anticipate their needs and exceed their expectations. Include an option they’ve never considered asking for. Solve a problem they don’t even know they have. Show them you’ve done your market research. 

Say you’re responding to an RFP for an event as the technology provider. Review footage from their event last year. Identify three challenges in their videos and post-event product distribution. Then, show them how they could have better monetized it. 

They may not choose Option 3, but that’s not always the point. When you include additional options they didn’t mention in their RFP, you’ll grab their attention. 

By offering an option that’s above and beyond what they asked for, they’ll recognize the value of what you can provide. They’ll see how you understand their needs on a deeper level than the competition.

Want your proposal to stand out from the others and increase your profit at the same time? 

Unbundle your add-ons. Then, when you showcase the products and services that are most valuable to your clients, you begin to look more valuable and more credible too.

?Learn how to optimize the most important part of your sales process. Download my free guide, 10 Questions to Qualify Prospective Clients.