12Proposing

Charles WarnerThe fourth step of both missionary and service selling is Proposing, or putting a specific proposal, or offer, on the table. “On the table” is a concept that is used in formal negotiations, and it means that an offer is firm, or an offer that, if accepted by the other side, obligates the proposing side to accept the proposal as presented.

In today’s non-programmatic media advertising marketplace, a typical proposal contains at a minimum, available inventory, prices, terms, and conditions. Generally, the prices, terms, and conditions are negotiable, depending on a number of conditions, especially the size of the order – the larger the schedule and the longer the schedule runs, the more negotiable prices, terms, and conditions generally are.

In missionary selling proposals for a four-week advertising campaign on a medium-size market radio station and its website might be relatively simple and consist of an overall weekly package price for a stated number of spots and impressions, terms, and conditions. The terms and conditions are typically the standard ones detailed in the 4A’s/IAB Standard Terms and Conditions for Internet Advertising for Media Buys One Year or Less that can be found at https://www.iab.com/guidelines/standard-terms-conditions-internet-advertising-media-buys-one-year-less/. Go to this link and click on the Education Guide link. Download the twenty-two-page Education Guide and read it. Reading the Guide is a slog – it is not a Stephen King thriller – but it is vital for you to read carefully and understand the terms and conditions that apply to the advertising that you will be selling, and it is just as important for you to know if your company’s terms and conditions are different in any way from the 4As/IAB standards, and if so, exactly how they differ.

If you are doing missionary selling to local businesses people who are inexperienced generalists, you will need to explain the terms and conditions to them so they fully understand, in a sense, what they are agreeing to when they give you an order. If you are making a proposal to experienced specialists at an advertising agency, they assume that the 4As/IAB Standard Terms and Conditions apply to what you are selling, so you do not need to mention them unless your organization has different terms and conditions, in which case you must clearly point out how the terms and conditions on your contract or insertion order (IO) differ from the standard 4As/IAB terms and conditions.

Terms and conditions for television and radio station, newspaper, magazine, and out-of-home advertising will differ, of course, depending on the medium, but many of the Payment and Liability and Cancellation and Termination terms and conditions will be similar or the same, especially for television and radio stations.

There are virtually an infinite number of possible variations in types of proposals and proposal strategies and tactics for different media, so they cannot all be covered in this book. Therefore, below are some general guidelines for making proposals in both missionary and service selling.

ProposalsThe topic of proposals brings up several questions:Proposal Questions

1. What is the ultimate purpose of a proposal?2. To whom should a proposal appeal?3. What is the best way to format a proposal?4. How detailed and how long should a proposal be?5. What are the ordering tactics for proposals?

The purpose of a proposal is to open a negotiation that will result in a favorable outcome In situations that are not complicated and pretty

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straightforward such as with a campaign on a medium-sized market radio station and website, a proposal might be accepted as offered and require no further negotiation. However, in larger, more complicated deals, the purpose of a proposal is to set the stage favorably for additional negotiations.

A proposal should appeal to the decision maker’s Rider In previous meetings you have established your credibility, gained the decision maker’s trust, and made an emotional connection. In the initial steps of selling you have appealed primarily to the decision maker’s Elephant, but in the Proposing step you should appeal to the decision maker’s Rider with numbers, data, and statistics based on agreed-upon decision criteria and that are properly referenced and sourced.

A proposal should be formatted the way a prospect, client, or an agency wants Over the years I have seen too many media proposals done the way a company’s marketing or design department wants them done, typically on PowerPoint with lots of pretty graphics and pictures of logos, headquarters buildings, founders, and CEOs – stuff that has nothing to do with what a prospect, client, or agency is looking for. Keep in mind that Educating presentations live in the Land of PowerPoint and that Proposing documents live in the Land of Excel or Google Sheets.

Here is a list of Dos and Don’ts for formatting proposal documents:Do’s for formatting proposals

Do check with your prospect, client, or agency about what format they prefer. If they don’t have a preference, use Excel or Google Sheets, because you want to focus on the prospect’s, client’s, or agency buyer’s Rider and not on yourself. You do not necessarily want your proposal to look pretty; you want it to be data based and credible.

Do remember that proposal documents will probably be shared with people who were not at your educating presentation and who may not be familiar with your benefits and advantages. Therefore, you need to

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attach clarifying documents in an Appendix in a Word or Google Docs format. The clarifying documents should expand on the benefits and advantages that you have highlighted in your proposal document and that you support with credible sources such as Nielsen ratings or comScore numbers. You will learn more about credible sources and Nielsen and comScore in the Chapter 17: Measurement.

Keep the proposal worksheet file size small enough to attach to an email, so you do not have to FTP the files to a third-party platform such as SlideShare.

Don’ts for formatting proposals Don’t ever submit just one proposal. Don’t impose your company’s preferred presentation or proposal design

or template on prospects, clients, or agencies. Don’t ever submit a software or AI-generated proposal in its original

form.

A proposal should be as detailed and as long as needed to win The amount of detail in and the length of a proposal depends on two factors: (1) how much money is involved and (2) what the definition of a win is. See Exhibit 12.1 below that shows, in very general terms, how detailed and long a

proposal should be based on how much money is involved.

Exhibit 12.1 Proposals

$$ Involved

Advertising schedule

Partnership deal

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Exhibit 12.1 simply means that the more money that is involved, the longer a proposal should be. It also emphasizes the concept that you do not want to overwhelm prospects, clients, or agencies, instead you want to give them what they have agreed to consider, which is a straightforward proposal. They do not need or necessarily want nice graphics, pretty pictures, or you patting yourself on the back about your company or medium.

The definition of a win is more nuanced. First, the concept of winning assumes that there is competition – more than one person or company are making proposals and competing for the business. When an advertiser goes to Google Ads or to Facebook to buy advertising, the competition is not other media companies, the competition is among advertisers who are bidding in an online, automated auction based primarily on price. Therefore, a win for advertisers who are bidding would be investing in ads based on what they are willing to pay – pretty straightforward. However, when an agency sends out an RFP to publishers, the competition is among other publishers, and those publishers are competing on a number of dimensions that include price, terms and conditions, demographics, psychographics, safe content, and more. With multiple competitors, the strategy and tactics for competitive moves are governed by game theory.

Game theory. Game theory is often applied to competitive situations in

economics, investing, politics, sports, and international relations. The

mathematical genius John von Neumann first developed game theory in

1928.i Watching players bluff in a poker game in 1928 inspired von

Neumann – Godfather of the modern computer and one of the sharpest

minds in the twentieth century – to construct game theory, a

mathematical study of deception and competitive strategies.

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At its most basic level, game theory posits that players of any

game, or competitive situation, such as Monopoly, poker, sports,

business, war, negotiating, or selling, should make tactical moves not

only based on the probability of success, but also based on the moves

of their competitors. So, when you play poker, you do not only consider

the odds of drawing a particular card or hand, but you also consider

what the other players’ tendencies and moves are. In other words, you

base your tactical moves on what your competitors’ moves are.

I used a good example of the use of game theory principles in

the fourth edition of Media Selling. The example was in Super Bowl

XXXVII when John Gruden’s Tampa Bay Buccaneers whomped the

Oakland Raiders. Gruden had been the coach of the Raiders the

previous year and knew the team’s tendencies. He knew that Raider

quarterback, Rich Gannon, usually pumped one way and then threw the

other way. Because the Buccaneers’ defensive backs knew Gannon’s

tendencies, the Tampa Bay secondary grabbed a record five

interceptions. The Bucs played the game according to what moves

they knew their competitor would make.

Game theory also defines different types of games. One type of

game is a zero-sum game such as a soccer match or a political race in

which there are just two competitors and only one winner (+1) and one

loser (-1), thus, the sum of the two is zero. There are also multi-player

games in which the definition of a win depends on the expectations of

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the competitors. If a top-ranked Marathon runner expects to win a race

but comes in third, it is not a win. If an unranked runner expects to

finish in the top 25 in a Marathon race in which there are 400

competitors and that runner comes in twenty-fourth, it is a win.

Therefore, winning in a multi-player competition for an advertising

campaign is not an absolute concept, it is a comparative concept that

measures (1) how you do against other media company competition, and (2)

what your expectations are.

How to beat other media competition. In order to measure how you do

against your other media company competitors, you must know what

kind of proposals they make, and the best way to discover what their

proposals look like is to do some detective work and ask prospects,

clients, and agencies, “How do you want to get proposals? Please show

me a few of the best proposals and a few of the worst proposals you’ve

received so I can tailor mine to the way you like them.” You may not

always get cooperation, but, as you will learn in the next chapter on

negotiating and closing, you never get anything you don’t ask for. So,

ask.

How to set your expectations. In the next chapter, which includes negotiating

tactics, you will learn more about highest legitimate expectations (HLE),

a term with obvious implications. Your expectations should be set high,

but legitimately high. You can call them Goldilocks expectations, not too

high and not too low, but just right.

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Let’s assume that you are selling for an NBC-affiliated television

station in a three-station, medium-sized market and are responding to

an RFP sent out by a local advertising agency that wants a proposal for a

six-week campaign that reaches women 25-49, and has a total budget of

$100,000. Let’s also assume that the latest Nielsen ratings show that

your station reaches 33 percent of all 25-49 year old women in the

market each week. That means that if the buyer at the agency gave

you 33 percent of the budget, or $33,000, it would be a fair share of the

campaign’s budget.

However, if you remember the answer to the first question about

proposals, that the purpose of a proposal is to open a negotiation that

will result in a favorable outcome, a favorable outcome is not getting a

fair share of the budget, a favorable outcome is getting more than your

fair share. Salespeople are not hired to just get a fair share, algorithms

and auctions can get a fair share, or a fair market price. If 33 percent of

the budget is a fair share, what is the highest legitimate expectation

(HLE)? The HLE is probably somewhere in the neighborhood of 37-40

percent. How are you going to get 37-40 percent of the budget, which

brings us to the fifth and final question about proposals, “What are the

ordering tactics for proposals?”

There are two ordering tactics for proposals The cardinal rule for

proposals brings us back to the familiar Rule of Three. Always submit three

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proposals ordered in one of two ways: (1) small, medium, and large or (2)

large, medium, and small. The first ordering option employs a foot-in-the-door

tactic, as detailed in Chapter 7: Influence and Creating Value. The second

ordering option employs a door-in-the-face tactic, defined in the same

chapter.

Foot-in-the-door ordering tactic – small, medium, large. If you use this tactic

when submitting proposals based on the medium-sized market

television station scenario used above, your three proposals would look

something like this:

Small proposal for $33,000, or $5,500 per week for 25 spots at an

average rate of $220 per spot. The small proposal also has three concise

benefits statements and three concise advantages statements.

o Benefits statements are positioned according to your Benefits

Matrix for the decision maker. For example, a benefit to an

anxious buyers would be that your NBC station is a “safe buy”

because ratings in all time periods have either held steady or

gone up over the last year.

o Advantages statements are also positioned according to your

Benefits Matrix. For example, an advantage would be that your

NBC station guarantees rating levels and will offer makegoods if

future rating information indicates that the average rating level of

the schedule falls below 10 percent of the guaranteed levels,

which is guarantee that other stations in the market do not offer.

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Medium proposal for $36,000, or $6,000 per week for 30 spots at an

average rate of $200 per spot. The Medium proposal also has five

concise benefits statements and five concise advantages statements.

For example, one of the benefits would be that the 30-spot schedule has

20 percent more spots than the small proposal for a nine-percent

discount on the small-proposal average cost per spot – more for less.

Large proposal for $40,000, or $6,667 per week for 40 spots at an

average rate of $166.67 per spot. The large proposal also has seven

concise benefits statements and seven concise advantages statements.

For example, one of the benefits would be that the proposed schedule

has 33 percent more spots than the proposed medium schedule and 60

percent more spots than the small schedule for a whopping 17 percent

discount on the medium-proposal average cost per spot – even more for

even less. Further benefits could be increased social media support for

a larger order, or sponsorship billboards (opening and closing audio and

visual mentions), event promotions, or a host of other added-value

features.

Notice that the above examples offer increasing rewards to the buyer

for investing more. Also notice that the small proposal is for a fair share of

the budget, a share that would be appropriate based on your station’s share

of the target audience ratings. This foot-in-door tactic clearly gives incentives

and more benefits and more advantages for giving you a higher share of the

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buyer’s budget. Also notice in the large proposal the use of the zippy word

“whopping.”ii Using such informal, non-technical, zippy words makes the

proposal less formal, less technobabbly, and less boring, and, thus, more

likely to be understood and to seem more friendly.

Furthermore, giving the buyer three options sets up the Choice Close

(details in the next chapter), which gives buyers the perception that they are

in charge, in control, and that they have options.

Door-in-the-face ordering tactic – large, medium, small. You will only use this

tactic in a few rare situations, such as when you are asked to make a

proposal to someone or to some agency that you have little or no

knowledge of or to someone or to some agency that has a reputation as

a low-baller, or bottom fisher – always looking for the lowest possible

price. In such a situation the purpose of your first, large proposal would

be unrealistically large so that it makes the second and third proposals

seem reasonable.

If we use the above scenario of an NBC television affiliate

submitting a proposal to an agency that has a six-week, $100,000

budget and also has a reputation for being a low-balling bottom feeder,

you might structure your proposals as follows:

Large proposal for $100,000, or $16,667 per week for 110 spots

at an average rate of $151.52 per spot. This large proposal has

three concise benefits statements and three concise advantages

statements. If you use the door-in-face tactic for a proposal to a

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bottom feeder, you do not want to include any value-added

benefits such as sponsorship billboards, social media support, or

event promotions, because a tough, competitive negotiator will

demand any added-value extras for a smaller schedule. You want

to save these extras so that you can use them as Clincher Closes

(next chapter) and give them up as needed to hold your price but

give reasonable concessions on terms, conditions, and added-

value extras if you need to.

Medium proposal for $60,000, or $10,000 per week for 62 spots

at an average of $161.29 per spot. As with the large proposal,

only give three concise benefits and advantages statements and

save added-value items as concessions in a negotiation.

Small proposal for $40,000, or $6,667 per week for 40 spots at

an average rate of $166.67 per spot. The small proposal should

also have just three benefits and advantages statements.

You can see that you wind up with the door-in-the-face ordering tactic

at the same place that you did with the foot-in-the-door tactic, with 40

percent of the budget. By using this large-medium-small tactic, you also give

the message that if the buyer wants the lowest possible price, they will have

to give you the entire budget, plus you control the pending negotiation

because you can concede added-value elements as needed and, thus, do not

have to move on price.

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AI and proposals

Artificial Intelligence is transforming sales, as discussed in Chapters 8 and 9,

and it is also transforming the way proposals are generated. Most media

sales organizations use some sort of CRM, sales process, or sales

administration software or platforms, most notably Salesforce and Efficio.

Most of these platforms have proposal-generating capabilities, such as

Salesforce’s CPQ package. CPQ stands for configure, price, and quote, and

the Salesforce CPQ application generates proposals that fit strict company

guidelines and legal and financial rules.

Also, automating proposal generation stops costly pricing and quoting errors, ensures compliance with sales processes, and saves salespeople’s time in constructing complex packages and offerings.iii However, as emphasized in the Harvard Business Review article “Algorithms Need Managers, Too,” automated AI application such as Salesforce’s CPQ need managing in the sense that they need guidelines. “All algorithms share two characteristics: They’re literal, meaning that they’ll do exactly what you ask them to do. And they’re black boxes, meaning that they don’t explain why they offerparticular recommendations.”iv Therefore, when giving instructions to algorithms, be explicit about all your goals and strategies, such as low, medium, high or high, medium low, and make sure you choose the right data inputs.v

I hope that now you understand that crafting a tactically sophisticated

set of three proposals is not an easy task, but one that requires a great deal

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of thought, preparation, insight, and, hopefully, automation. I also hope you

understand that the effort is worthwhile and that you can design a series of

three proposals that accomplishes the purpose of proposals, which is to open

a negotiation that will result in a favorable outcome.

Test Yourself1. In the 4As/IAB Standard Terms and Conditions what are CPA

Deliverables?2. In the Standard Ts&Cs is email considered written communication?3. Can advertisers restrict having their ads adjacent to content that

promotes violence?4. How many days written notice are required to cancel a schedule before

it starts?5. How many days do agencies have to make payments to media

companies after they receive an invoice?6. Explain a sequential liability clause.7. What is a short rate?8. What are the four proposal questions?9. What are the answers to the four proposal questions?10. Explain briefly the tenants of game theory?11. What are the two ordering tactics for proposals?12. Why in the door-in-the-face tactic do you not include more than

three benefits and three advantages for the large proposal?

ProjectVisit a local television or radio station, ask to see a sales manager, and then tell the sales manager you are working on a project for a course in media

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sales. Tell the sales manager that your project is to come up with three proposals to a local advertising agency that has a budget of $100,000 for a six-weeks campaign to reach women 25-49. Ask if that budget is a reasonable amount and if not, adjust the budget to a reasonable level. Then ask what the station’s weekly rating share is of women 25-49. Then ask what the station’s average spot rate would be for a small, a medium, and a large schedule. With this information, create small, medium, and large proposals with concomitant benefits and advantages statements that will help you get more than your fair share of the budget.

Resourceshttps://www.iab.com/guidelines/standard-terms-conditions-internet-

advertising-media-buys-one-year-less/ (4A’s/IAB Standard Terms and Conditions For Internet Advertising For Media Buys One Year or Less)

https://sqad.com/mediacosts (SQUAD Media Cost Reports)

Notes

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i Poundstone, William. 1992. Prisoner’s Dilemma. Doubleday. ii Gallo, Carmine. 2010. The Presentation Secrets of Steve Jobs: How to Be Insanely Great in Front of Any Audience.

McGraw-Hill.iii “CPQ for Sales Leaders.” Retrieved from https://www.salesforce.com/form/conf/steelbrick/ebook-cpq-sales-leaders/

iv Luca, Michael, Kleinberg, Jon and Mullainathan, Sendhil. 2018. “Algorithms Ned Managers, Too.” Harvard Business Review. January-February.

v Ibid.